Dubai Shares Fall Most in World as Investors Wait for Debt Plan

Dec. 23 (Bloomberg) -- Dubai stocks retreated the most in two weeks as investors wait for state-owned holding company Dubai World to present a debt restructuring plan.

Emirates NBD PJSC, a Dubai-government controlled lender, tumbled to the lowest close in seven months. Emaar Properties PJSC, the United Arab Emirates’ biggest construction company, fell for a second day. The DFM General Index dropped 3.8 percent, the biggest fluctuation among stock indexes tracked globally by Bloomberg News, to 1,735.7 in Dubai. Dubai’s benchmark index has gained 6.1 percent this year.

Dubai World may present a “standstill” offer to banks in early January as it aims to restructure $22 billion of debt, said three bankers who attended a presentation on the matter earlier this week. The company told lenders it needs time to allow its assets to recover from a drop in value following the credit crunch, said the bankers, who declined to be identified because the meeting was private.

“Investors are waiting” for Dubai World news, said Hesham Bakry, Dubai-based institutional sales manager at Al-Futtaim HC Securities Co. “The Dubai situation is very sensitive.”

Dubai’s benchmark index has retreated 17 percent since Dubai World on Nov. 25 said it would seek to freeze or delay repaying debt until at least May 30. The company said Dec. 1 it wants to alter terms on about $26 billion of debt, including that of Nakheel PJSC, which is building palm tree-shaped islands off the emirate’s coast. Dubai World repaid $4.1 billion on an Islamic bond from Nakheel last week after Dubai received a $10 billion loan from the Abu Dhabi government.

Emirates NBD, the U.A.E.’s biggest bank by assets, tumbled 4.9 percent to 2.89 dirhams, the lowest close since May 19. Emaar dropped 6 percent to 3.59 dirhams.

Abu Dhabi’s benchmark index lost 1.9 percent, Qatar’s DSM 20 Index declined 0.6 percent, the Kuwait Stock Exchange index retreated 0.2 percent, Oman’s MSM30 Index dropped 0.9 percent and Bahrain’s measure slid 1 percent. Saudi Arabia’s Tadawul All Share Index gained 0.2 percent.