Dubai crisis adds to scepticism over government bodies: Brain

The Dubai World crisis could be the first in a series of credit crunch 'aftershocks' that change how investors view quasi-government bodies, warns Paul Brain.

Brain, who managers the £640m Newton International Bond fund, says the events in Dubai are like to be seen as a key inflection point when investors finally parted company with the notion investing on the basis of government ownership was equivalent to a guarantee. He also believes there will be a similar reappraisal of government owned entities across global markets. "The real consequences of the explosion in both sovereign and corporate debt issuance over the past five years will only become apparent in the next year or two," Brain says. "Around US$200bn of emerging market corpora...