Shares drop 6% in Dubai and Abu Dhabi but Dubai World claims it is on a 'stable footing'

Dubai and Abu Dhabi shares have continued to fall for the second day in a row.

Stock indexes for both emirates slipped by around 6% after suffering large losses yesterday.

In a statement released by Dubai World, the government owned company revealed plans to restructure £15.8bn in debt. According to the BBC the group said it “intends to adopt a policy of regular communication and will provide further updates as the process develops."

The restructuring process proposed by the group will include only its main property companies however, and will leave other firms untouched because Dubai World said they were on a “stable footing”.

Last week, financial markets tumbled around the world after Dubai World asked creditors for an extension on repaying its debts.

Hassaim Arabi, chief executive at Gulfmena Alternative Investments told the BBC the new statement by Dubai World was good news. "It shows they are still committed to their payments and it removes all fears that this is a complete default," he said.

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