Dubai's finance chief once again moved to reassure markets on Thursday saying the emirate was better at implementing change than publicizing it and investors were softening their view on Dubai's debt woes.
A shock announcement by Dubai on November 25 that it sought a repayment freeze on $26 billion worth of debt at Dubai World, hammered global investor sentiment in the immediate aftermath of the news.
Fears that Dubai's debt problems are not limited to troubled state conglomerate Dubai World battered investor confidence in the world's top oil-exporting region and sent shares across the Gulf tumbling on Wednesday.
Dubai's index, down 26 pct since November 25, was marginally higher at 2:27 a.m. EST on Thursday in a highly volatile session.
"Of course, the reaction by the global markets was psychological, and came strongly. However, the reaction is now softening as investors became more informed about what happened." Abdul Rahman Al Saleh said in a speech.
Dubai has faced an international backlash over the last few weeks with investors and the media slamming it for its lack of transparency and clarity on how the emirate will restructure its debt pile.
"Let me admit, in Dubai we are not good in publicizing what we are doing as much as we are in doing it," he said, adding the media had spread "blind panic."
Saleh's comments stand in stark contrast to the boom years when it bought assets around the world, lured celebrities with luxury villas and exclusive hotels and courted the media with projects such as the world's tallest building.
"It was a misunderstanding of the status of Dubai, which indeed is a center of trade and economic activity," Saleh said. "It was lack of knowledge of how much debt was the subject of the announcement and how it is related to the government debt.
Saleh said the emirate would come out of the crisis as a "winner" if past precedent was anything to go by.
Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading said Saleh's comments would not affect local stock markets.
Will Dubai emerge stronger? That remains to be seen. Dubai's debt restructuring has to be played out in an orderly fashion for that to be the case," added Wakeman.
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