Dubai World

The hottest topic in town now is all about Dubai World and their request to halt all their debt repayments.  Once the news came out, it sent shock waves around the world markets (for those that are still open).  For markets that are closed for Thanksgiving and the Muslim new year, hmmm, the next market opening will be very interesting to watch.

Last year's credit crunch saw many US  and UK banks go underwater, with the collapse of Lehman Brothers, the entire world was sent into turmoil.  This time round, would Dubai World triggered another round of credit crunch?  Probably not, at least we are not seeing debts amounting to 3-digital billions.  The total debt is said to be only around 59 billion.  Some big mouth then said the biggest impacted banks are HSBC and Standard Chartered.  That sent Hong Kong's Hang Seng Index dived almost 5%.  We didn't see such big drops in HSI for a while.

We can expect STI will be impacted next Monday, and the most impact might be on the banking sector.  Hmm, not very good.  I suppose all the 3 local banks will have to come out to clarify how much exposure they have to their Middle East investments.  Hopefully not much. 

Gold price is down, finally.  Hard to tell whether it is just a healthy pull-back or a major correction.  If it is a major correction, some analysts say the price may go down to US$900-1000/oz.  That's good news for those who had been left out.  I don't know about Gold, I can only hear what the analysts say.  For Silver, probably the spot price will go back down to US$16-17/oz before it resumes its up trend.  Probably means no guarantee lah, act on your own risk.