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.

High yen rate is harmful for Japan's economy

Japan's finance minister has said the strength of the yen is harmful to the country's economy. In trading the currency has touched 84 to the dollar, the US currency's lowest level since the mid-1990 s. A high yen damages the competitiveness of Japanese exports, which have been the engine of the country's growth. Finance Minister Hirohisa Fujii said the government was watching closely, but did not signal immediate intervention. Unemployment falls Everyone in Japan knows that the flimsy one yen coin is so light it can be made to float on water, but now the currency is sinking to the bottom of the glass as the dollar weakens. Mr Fujii said the strength of Japan's currency was "one sided" and harmful to the economy. With much of the relative strength caused by dollar selling rather than yen buying, there may be little the government can do alone. Japan is emerging from its worst recession since the end of World War II. Figures out on Friday showed unemployment had fallen. But the strong yen eats into the competitiveness of exporters like Sony, Toyota and Honda. Japan's recovery is threatened by deflation, or falling prices. And the strength of the currency threatens to make that worse too because imports and raw materials become cheaper.

Help plan taking for travelers

Travellers who book holidays on the internet could receive more financial protection if things go wrong, under plans in a European review. Consumers who make up their own packages of flights, hotels and car rentals on one website or partner sites could get more protection. Currently, only those who have booked specific package deals have rights to cancel or refunds if operators go bust. A review will consider help for passengers if airlines collapse. "We need tough protection that gives all consumers booking a package holiday the peace of mind they deserve, and we need a level playing field so businesses compete on equal terms," said EU Consumer Commissioner Meglena Kuneva. The consumers' association Which? welcomed the review. "The Package Travel Directive was drawn up almost 20 years ago, and while useful at the time, it doesn't go far enough to protect today's holidaymaker," said Rochelle Turner, of Which? Holiday. "A significant number of people book hotels from a direct link on an airline's website, or use online travel agents to book their own package, and are left without the peace of mind that they are protected should something go wrong. Changes The current rules, which came into force in 1990 , offer protection for people who book packages through a travel agent. They give these travellers various rights including the right to a refund if elements of the holiday are changed or if the organiser cancels the package. Most importantly, provision must be made to refund travellers and return them home if the operator goes bust. The European Commission wants to consult on the possibility that - after a recent spate of airlines going bust - basic insolvency protection should be extended to cover independent travellers buying standalone airline tickets which are not part of any package. However, the review is unlikely to start until the second half of 2010.

Carphone makes profit

The mobile phone retailer Carphone Warehouse has raised its full-year earnings forecast after recording better-than-expected sales. Its comments came as it reported an 88 % rise in pre-tax profit for the six months to 30 September to £75 m. The firm's revenues rose 13 % to £789 m. Chief executive Charles Dunstone said: "Each business has delivered a significant year-on-year improvement." Carphone also said its planned demerger of the TalkTalk business was on track. The group will split into two companies by March 2010 with both Carphone Warehouse and TalkTalk trading separately on the London Stock Exchange. The firm's broadband customer base was up 48 % year-on-year to 4.12 million. Strong demand for smartphones - such as Apple's iPhone - also boosted sales. Mr Dunstone also said that the integration of Tiscali UK, which it bought in May, had cemented its position as a leading player in UK telecoms and was enhancing earnings. He added that Carphone's joint venture with the US's Best Buy had also "delivered strong growth" . One aspect of the joint venture will see the opening of "Big Box" megastores in spring of next year.

Chinese share hits

Leading Chinese shares have slid ahead of a key government economic meeting with investors wary of the outcome. The benchmark Shanghai Composite Index fell 119.2 points, or 3.6 %, to 3 , 170.98 , the market's biggest daily fall in almost three months. There are concerns that the government may introduce measures to clamp down on rising asset prices, including shares and property, analysts said. On Tuesday, shares fell 3.5 % on fears banks would need to raise more capital. This followed an order by regulators at the start of the week that banks needed to control lending and manage risks better. These fears also contributed to the latest share slump, analysts said. "Worries about fund raising in the banking sector dragged down the index while rumours of a possible shift in economic policy spread ahead of China's central economic meeting, so investors locked in profits due to uncertainties," said Li Wenhui at Huatai Securities.