Dubai World's plan to restructure $26 billion worth of its estimated $59 billion debt has failed to quell the falls in stock prices across Gulf markets.
In early trading on Tuesday December 1st the Dubai exchange dropped six per cent, while the Qatari stock market fell by nine per cent and five per cent was shaved off stock in Abu Dhabi.
Last week's announcement that Dubai World was seeking a debt standstill for a six-month period rocked markets around the world due to the number of global financial institutions owed money by the state-owned company.
The new plan to withhold debt payments on less than half of its total liabilities is intended to reduce panic among investors and restore some confidence in Dubai's financial position.
On a global scale the announcement appears to have quelled fears of a default leading to a second financial crisis, with European, Asian and US stocks improving slightly this week.
However, confidence in the Gulf region apparently remains low.
Today's losses were preceded by similar figures yesterday, where the Dubai exchange lost more than seven per cent and Abu Dhabi's decreased by 8.3 per cent.
Sheikh Mohammed bin Rashid Al-Maktoum, the ruler of Dubai and the president of the United Arab Emirates (UAE), has attacked the global reaction to Dubai World's debt standstill plans.
"They do not understand anything," he said, adding that Dubai's economy remained "strong and persistent".
Sheikh Mohammed went on the offensive in regard to criticism of Dubai for its build-up of liabilities to fund a massive property development boom that subsequently collapsed in the wake of the financial crisis.
"It is the fruit-bearing tree that becomes the target of [stone] throwers," he said.
Last week, it was revealed that construction companies from the UK were owed around $330 million in unpaid debts for projects carried out in Dubai and other parts of the UAE.
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