Impact of Dubai Debt on World Markets

It is interesting to note that world is searching on Google with terms like Dubai world,  Dubai debt,  Dubai debt crisis, Dubai world debt, Dubai Debt default and  Dubai financial crisis which shows the impact of crisis at the world front.. It is bound to happen when one spends more amount of money for their comfort and cannot afford to pay off the same. This is in reality plastic card culture which is taking a toll on the number of financial centers. The latest to get added in this category is Dubai United Arab Emirates which has asked for a Debt standstill which is a mechanism by which a country agrees to cease payments on its debts until a restructuring agreement has been negotiated with its creditors.

One gets surprised that the city which is a world center of attraction for trading and is also known for Dubai trading festival; is now swamped in debt that it's asking for a six-month reprieve on paying its bills and this announcement has led to drop on world markets. Even Moody’s Investors Service has downgraded the ratings of all six government-related issuers (GRI’s) in Dubai and left them on review for possible downgrade

Effect on Indian Companies Post Dubai Announcements
L&T has exposure of $20-25 million (Rs 125 crore) in Dubai from an order book of Rs 5000 crore from the Middle East.
The Dubai situation impact monetarily is not huge, says Krishna Kumar Karwa of Emkay Securities.
India is a strong fundamental story but global trends do affect our market, says Vibhav Kapoor of IL&FS on CNBC TV18.
We do not have significant exposure to the Dubai real estate sector, says MD Mallaya CMD of BoB.
- We have no exposure to the Dubai real estate sector, says Luv Chabbra of Punj Lloyd, on CNBC TV18.
The Dubai situation could be a very bad sentiment impact on our market, says Rajesh Jain, market expert, on Zee Business.

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