Dudai debt problem creat european share fall

Worries over Dubai's debt problems drove down Europe's share markets for the second day running. The main share indexes in London, Paris and Frankfurt all opened more than 1 % lower before easing back slightly. The falls follow news from the state-owned Dubai World that it would delay repaying some of its debt. Earlier, Asia's markets were down sharply. Tokyo's benchmark Nikkei fell 3.2 % to 9 , 081.52. In Hong Kong, the Hang Seng index ended down 4.84 % at 21 ,134.5. Oil prices also fell. US crude dropped 4.5 % to $74. 51 a barrel and London Brent Crude was down $1.26 to $75.73. The biggest underlying fear is that Dubai's problems could reignite the financial turmoil of the credit crisis. That would lower global demand for a whole range of commodities, including oil. WHAT IS DUBAI WORLD? Dubai World is the emirate's flag bearer in global investments. It has a central role in the direction of the emirate's economy and has four main areas of operations: Transport & Logistics, Drydocks & Maritime, Urban Development, and Investment & Financial Services. Its assets include DP World, one of the largest marine terminal operators in the world, which sparked a national security debate in the US when it moved to take over six of the country's ports. Back home, its own maritime ambitions are driven by Dubai Maritime City which is aiming to turn Dubai into a major ship-building hub. Perhaps the most easily visualised area of operation is Nakheel, the property developer behind projects such as The Palm Islands and The World. Its fourth main business area is Istithmar World, which is the group's investment arm. It said on Wednesday it would ask creditors of the state-owned Dubai World and Nakheel to agree to a standstill on billions of dollars of debt as a first step towards restructuring. David Buik, senior partner at BGC Partners, said: "You can't just say to the world: 'I don't want to pay my debts'. There is no income coming in from any of these properties. I think this is shocking PR." The Gulf state, which has less oil money than many of its neighbours, became a trading and tourism hub with global ambitions. Dubai World, the conglomerate that led the emirate's expansion, had $59 bn (£36 bn) of liabilities as of August, a large proportion of Dubai's total debt of $80 bn. Nakheel was the builder of the landmark palm tree-shaped island developments off Dubai. The news shook markets that are recovering from the collapse of the US housing market and contagion that threatened to rupture the global financial system last year. Banks and builders were hit hardest as they are the most likely to be exposed to firms with property at the sharp end of the slump.