Dubai Worries Shake World Markets

Equity markets around the world turned lower over the Thanksgiving holiday after top officials in Dubai asked creditors of corporate flagship Dubai World to accept delayed payments.

According to a report in The Wall Street Journal, Dubai World is asking for a six-month moratorium on interest payments. During that time, it could negotiate with creditors a restructuring that would pare liabilities, which include $20 billion of loans and bonds coming due in the next 18 months, the paper said. 

In a statement released Thursday, Sheik Ahmed bin Saeed al Maktoum, head of Dubai's finance committee, said, "Our intervention in Dubai World was carefully planned and reflects its specific financial position.  We understand the concerns of the market and the creditors in particular. However, we have had to intervene because of the need to take decisive action to address its particular debt burden."

The Wall Street Journal report said that the banks with the greatest exposure to Dubai World are concentrated in Europe, including Royal Bank of Scotland (RBS), HSBC (HBC), Barclays (BCS), Lloyds Banking Group (LYG), Standard Chartered and ING Groep (ING).

U.S. stock futures are sharply lower ahead of Friday's abbreviated trading day.