On Wednesday, a prominent newspaper of United Arab Emirates (UAE) reported that the condition of the market which has seen a tremendous fall down in the UAE can even be worse than expected.
In such a situation of crisis, when loses suffered by the investors are increasing day by day, banks, selling derivative products and notes from Lehman Brothers have declined to comment. Some others have said that they require more time to go through the damage.
According to the analysts, “Losses sustained by individual and corporate investors in the country following the collapse of Lehman Brothers could be phenomenal and could be known only when financial institutions disclose their exposures to the crisis.”
Further a spokesperson from Citibank informed that only a limited number of UAE customers had suffered by Lehman’s bankruptcy.
The spokesperson informed, “Citi is working globally with governments, regulators and other industry leaders to turn to an orderly market environment. We are proactively providing information to our clients who bought these notes to keep them up to date with market developments.”
The banks might find it quite tough to recover the loan from borrowers, in cases where investments are far below the face value.
Zaid Al Nafoosi, stock broker for Al Sharhan Stock Centre reported, “We don't know the depth of the problem with Lehman Brothers... We don't know their investments in our market, and we don't know our investments in that bank.”
“Lehman did active business in this region and I would suspect most financial institutions here would have some exposure to them across various asset classes including rates, credit and structured products,” added Abdul Kadir Hussain, CEO of Mashreq Capital.