Dubai World issue can be resolved locally: MIG Investments

Excerpts from Closing Bell on CNBC-TV18 Watch the full show » RELATED NEWS Mkts overreacting to Dubai crisis: Expert Dubai debt worry ripples across assets Dubai seeks debt delay, some units cut to junk ALSO READ See what other FIIs are saying about the markets See what other experts are saying about markets See what Udayan Mukherjee is saying about the markets

In an exclusive interview with CNBC-TV18, Bill Hubard, Chief Economist, MIG Investments, speaks on the impact of Dubai World debt crisis.

Here is a verbatim transcript of an exclusive interview with Bill Hubard on CNBC-TV18. Also watch the accompanying video.

Q: You have seen a lot of markets across the globe, equities dance around a bit, currencies have done their own gig today, and commodities have sold off. How material was today's development or is it just overstating the issue?

A: It's quite interesting. I was in Dubai last week for the Foreign Exchange Conference-the same conference I had attended last year and my feeling after leaving Dubai last Friday was that difference between this year and last year - there were fewer speculators, there were fewer people who wanted to get in and out of the market make their million and go home. The people that I talked to last week, they all realised that there were problem. Most people in the market knowing that their real estate market had stopped, all of their loans have stopped but began to feel that the people that are still there, the market will probably take two-three years to correct itself. What surprised me when I was there last week with the three firings from Dubai world and then it was yesterday's announcement but my feeling is that anybody that have been involved with the market had seen Dubai, had followed whether it be the oil market whether it be the real estate market, whether it be credit default swap market - knew there was a problem.

Yesterday's announcement - my feeling is that Dubai will be a local issue; I do not see that much contagion. I would see Abu Dhabi or Bahrain or Qatar basically coming in and protecting the situation. But the one thing that may and this is my concern today after reading a number of report yesterday and talking to people-is the exposure one of European banks and especially banks in the UK-this is only an assumption. But from what I can read, what I can hear is there is a talk that as much as 50 billion pounds could be exposed to Dubai real estate, hence the reason the massive sell off that we have seen in the currency in the last two days; were of 3.5 points today after 1.5 points yesterday and this is the concern.

But now looking at the global situation my feeling was that with yesterday being the US holiday, with Christmas being on Friday this year and new year is on Friday the market taking a year end profit taking. I just think yesterday and today have been exaggerated and people would have taken smaller lot profits today and next week etc - they are doing all right now; getting in the cash for year end as quickly as possible. But my feeling is, I may not be realistic, I see this as a local problem that would be resolved locally in the Gulf Cooperation council (GCC) or the UAE rather than any contagion reference to the subprime etc.

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