Markets Falling On Dubai World

Asian stock markets declined on Thursday and are declining again as investors around the world are spooked by the Dubai World’s debt and its exposure to various Banks and other companies worldwide.

Dubai World- The Sun Never Sets on Dubai World

Dubai World, the city-state’s largest corporate entity, Wednesday asked creditors for a six-month standstill on debt repayments of $59 billion. As of this writing, Japan’s Nikkei 225 was down 3.0%, Hong Kong’s Hang Seng Index fell 3.4%, China’s SSE component index was down 1.8%, India’s SENSEX was down 2.2%. Dow Jones Industrial Average futures were recently 260 points lower in screen trade. Markets in Singapore were shut for a holiday. As per Kitco, Spot gold was recently trading at $1,177 per troy ounce, down $14 from last NYSE close.

In the context of trillions being spent to prop-up economy world-wide, $59 billions doesn’t appear much on the surface. So is it $59billions that’s driving the panic or is the “after effect” (probably fire sell of its assets world wide) that’s driving shares down world-wide; we’ll get to know in couple of days.

For OPNewsletter, we are fine; up+5.63% as of Wednesday close.  We are short delta on our two key portfolios, and just closed our Iron Condor for +14% profits on Wednesday. Even those who couldn’t close, they should rather gain even more today once markets open lower (assuming markets doesn’t fall beyond 4-5% today itself).

Separately, we just shorted financials (via FAZ) and gold (via DZZ) ; so this sell-off will potentially offer an opportunity to book quick gains.

Trade carefully, trade profitably, OP