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November Fund Review: Dubai’s Debt standstill worrying the whole world

Shocking news emerged in late November. Everybody thought that Middle East as the relatively reclusive market, could has less impacts on global markets Yet, Dubai World’s debt standstill triggered global market’s avalanche, an unpleasant surprise to the whole world.

Shocking news emerged in late November. Everybody thought that Middle East as the relatively reclusive market, could has less impacts on global markets Yet, Dubai World’s debt standstill triggered global market’s avalanche, an unpleasant surprise to the whole world.

Real estate bubble burst

Following the economic recession of its western counterparts, the real estate industry in Middle East burst as a consequence. The government owned flagship holding company, Dubai World in United Arab Emirates, inevitably asked for an extension to serve its debt obligations. In late November, Dubai World’s property arm Nakheel, which is the developer of the world famous luxurious reclamation projects in Gulf, including the Palm Jumeirah and the World Islands, declared a restructuring of outstanding Islamic debt due in mid-December. Fear rose on further financial deterioration of the Middle East world might cause dampen the green shoots of economy. That triggered the global market slump. Furthermore, lack of information for debt repayment from the government also caused haze over the Middle East world. The Middle East markets inevitably hurt the most, the same case in fund performance too. The Africa and Middle East Equity fund category lost 5.58 percent in the single month while the Other Africa & Middle East Equity fund category fell even deeper, which dropped 6.67 percent in the same period.

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