Standard & Poor’s Ratings Services and Moody’s have downgraded the government entities after the city-state government said it aims to restructure the existing debt of Dubai World, its largest and most diversified investment vehicle, and real estate developer Nakheel.
S&P has downgraded the ratings for five Dubai government related entities–DIFC Investments, DP World, Jebel Ali Free Zone (FZE), Dubai Holding Commercial Operations Group LLC (DHCOG),and Emaar Properties PJSC.
Moody’s Investors Service also downgraded a total of six government-related issuers and left them on review for further possible downgrade. Apart from five entities downgraded by S&P, the one additional entity whose rating has been downgraded by Moody’s is Dubai Electricity & Water Authority.
The rating agency said about its downgrading move “such a restructuring may be considered a default under our default criteria, and represents the failure of the Dubai government (not rated) to provide timely financial support to a core government-related entity.”
There are many investors that rely on rating agencies and analysts for advice. We often see this advice coming when it is too late to avoid a loss.
We have all seen the analysts pile on to downgrade a company after it misses earnings estimates. It is not easy to find independent analysis. It is difficult to find independent and impartial research advice.
What value have these rating agencies and analysts provided to you?
Is there a better way? Technical analysis gets fooled too. On balance, you need to decide if technical analysis provides you a roadmap for investments or if proper use of technical analysis can provide you a better way.
For research and more information on trading plans, mark@seleznovcapitaladvisors.com
www.seleznovcapitaladvisors.com
