UAE used to be one of the most promising markets in MENA if not in the world. With the vast increase in projects and the high dependence on leverage, the effect of the financial crisis hurt them the most; both in their stock market and their property market. The sukuk market also had its share of downfall, where some of the sukuks issued by big names such as Nakheel and Emaar Properties stated yields of 40% as the risk of default was apparent.
Nevertheless, the worst might be over for the UAE and the risk of default seems to be out of question. The graphs below shows the slump in CDS (Credit Default Swaps) spreads from their peak in mid-January due to the support from the government to the local entities.
Dubai 5 year CDS spreads:
Abu Dhabi 5 year CDS spreads:
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Loading ...Tags: abu dhabi, CDS spreads, dubai, Sukuks, UAE
Nakheel 2011 sukuk currently yielding 21%
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In other words, the gap between dreams and reality is closing in.
Nice graphs Saud, Thanks !
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Saud Reply:
October 29th, 2009 at 8:35 pm
Glad you liked them
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apparently not.
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Saud Reply:
December 10th, 2009 at 12:27 am
I’ll post about how the CDS spreads moved in Dubai later next week
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