Stocks in Asia rebounded from earlier losses after the announcement of Dubai’s $10 billion bailout. The capital infusion marks one of several attempts for the emirate, which controls the UAE’s presidency, to salvage Dubai World, as well as the overall reputation and credit worthiness of the government. Standard and Poor’s. stated that "the move is a step toward rebuilding confidence”.It's important to note that Abu Dhabi has directly and indirectly provided Dubai with as much as $25 billion over the past year, illustrating a commitment to keeping Dubai world afloat.
Much of the support has come in the form of investment, such as purchasing large blocks of Dubai bonds. The message to the global financial community is a familiar one: "Dubai is too big to fail”. So for now, the dreamy World of Dubai will be able to make interest payments, while any remaining funds will be used to cover its business needs though April.
Trivia of Interest:
At present, Abu Dhabi boasts the worlds highest absolute and per-capita level of sovereign wealth funds, calculated at USD 1,000,000.00 per inhabitant.
Somehow I wish I didn't know that.
K. Reilly
Cohn-Reilly Report / News Flash
