Just a hunch, but we suspect that this story will do more lasting damage to Dubai than any other single article or illustration in the past tumultuous week.
Last week, as underlings in the embattled emirate were busy re-setting investors’ expectations as regards getting their money back from the likes of Dubai World, Sheikh Mohammed bin Rashid al Maktoum, Dubai’s ruler, was busy investing yet more money in bloodstock at the Tattersalls sales.
From Bloomberg:
Sheikh Mohammed was the top spender at the Tattersalls sales in Newmarket, England, on Nov. 27, two days after Dubai World, a state-run company grappling with $59 billion of liabilities, said it would ask creditors for a “standstill agreement” on its debt.
His advisers bought eight foals for a total of 1.12 million guineas ($1.95 million) for him as stock markets slumped around the world on concern over a default. His biggest purchase was a 260,000-guinea colt sired by Invincible Spirit.
According to the Sheikh’s main bloodstock adviser, John Ferguson, his interest in yearlings has nothing whatsoever to do with the Dubai government and/or Dubai World.
Creditors may disagree.
It will be interesting to see how this plays out in polite British bloodstock society. After all, the Sheikh is the biggest racehorse owner and breeder in the history of the sport, with about 700 horses in training.
Our investment advice? Sell horses.
Related links:
Dubai crisis leaves British racing fretting over Sheikh’s vast investment – The Guardian