Dubai shares continue to fall on debt concerns

Some of Dubai World's best assets are its ports

Dubai's stock market has fallen for the second consecutive day on continuing fears about leading companies' ability to repay debts.

The main Dubai Financial Market index fell 6.1%, after closing down almost 6% on Monday.

Two weeks ago, Dubai World asked for a six-month delay on debt repayments. Credit agencies have since downgraded many leading Dubai companies.

On Tuesday, credit agency Moody's downgraded six state-owned companies.

Last week, Standard & Poor's cut the ratings of four Dubai-based banks, having previously downgraded six companies to junk status.

Junk is the term commonly used to describe bonds that are rated below investment grade by ratings agencies.

The Dubai index has now fallen by more than 20% since Dubai World's debt extension request.

Tuesday's plunge was led by real estate developer Emaar Projects, which fell by 9.8%.

Valuable assets

One of Dubai World's first major repayments to bondholders in its property firm Nakheel is due next week.

"Until there is some clarity in debt restructure, there won't be any serious buyers [of shares]," said Julian Bruce at EFG Hermes Holding in Dubai.

"The closer we get to the Nakheel deadline with no news, the worse it will be."

Dubai World has some valuable assets, notably its ports business, which includes operations based at London's Tilbury Docks and France's Le Havre.

Other items in its wide-ranging investment portfolio include the luxury retailer Barney's of New York, a list of high-end US hotels, and the Canadian acrobatic circus franchise, Cirque du Soleil.