Dubai World, a government-related company based in Dubai in the Middle East, requested a deferral of debt repayments, triggering global equity declines, yen appreciation and euro depreciation. The impact spread to Japanese companies, and the UAE central bank later decided to provide financial assistance.
On 6 November 2009, Dubai World, a government-related investment company in Dubai in the Middle East, requested an extension of its repayment schedule, triggering declines in equities and volatility in currencies across global financial markets. Turmoil following the previous year’s Lehman shock resurfaced, heightening investor caution.
In Japan, the impact spread to domestic markets, with shares of major general contractors that had won infrastructure projects in Dubai plunging temporarily. The total repayments for which Dubai World requested an extension were reported at $59.0 billion, or approximately ¥6.5 trillion, prompting widespread surprise at the deferral by a Middle Eastern government-related company that had been considered unlikely to face funding problems.
Thereafter, as global equities declined and the yen strengthened against the dollar and the euro weakened, the UAE central bank decided to provide financial assistance. Market turmoil gradually subsided.
The Nikkei 225 closed at ¥9,808.99 that day, and the article looks back at the day’s market movements.