Dubai Holding Risks To Delay Debt Recovery

We remain fundamentally unconvinced by the Dubai financial market recovery story, particularly with the restructuring of Dubai Holding's (DH) US$12bn worth of debt still pending, and creditors unhappy with the low return on the extended Dubai World (DW) loans. We still see good value in local debt, over the long term, given that (a) yields are high, (b) the government is highly unlikely to allow any major company to default, and (c) a new law on public debt is in the pipeline, which should improve risk perceptions.

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