Investors soften on debt

LONDON: Investors are "softening" their views about Dubai's debt woes, the emirate's finance chief said yesterday as he attacked the media for spreading "blind panic" over the city-state's financial crisis.

"Of course, the reaction by the global markets was psychological, and came strongly," said Abdul Rahman Al Saleh, director-general of the Department of Finance. "However, the reaction is now softening as investors became more informed about what happened."

The emirate has been under fire from international investors since it emerged last month that the state-owned Dubai World conglomerate was seeking to freeze repayment of US$26 billion ($35.75 billion) of debt.

Saleh acknowledged criticisms yesterday, saying: "In Dubai we are not good in publicising what we are doing as much as we are in doing it. It was a misunderstanding of the status of Dubai, which indeed is a centre of trade and economic activity. It was lack of knowledge of how much debt was the subject of the announcement and how it is related to the Government debt."

His comments helped Dubai's stock market, which had fallen by 26 per cent since November 26, to bounce back yesterday, gaining 7 per cent.

- INDEPENDENT