( CNN ) -- Dubai sent investors reeling Thursday after asking creditors to freeze the debt repayments of one of its biggest holding companies , Dubai World . The announcement came after the market close on the eve of the Eid holiday and Thanksgiving in the U.S. , leaving traders ' hands tied over their exposure to investments in the Emirate . Shares dropped in London and Europe as bankers struggled to gauge the implications of the debt freeze without additional guidance from Wall Street . With very little information being distributed from Dubai , the market has been left to question the motives of ruler Sheikh Mohammed Bin Rashid Al Maktoum and the financial future of Dubai World and its huge portfolio . So what happened ? Late Wednesday , the government of Dubai issued a statement saying it had authorised the Dubai Financial Support Fund to `` spearhead the restructure of Dubai World with immediate effect . '' The first step , it said , was to ask all providers of financing to Dubai World and Nakheel to `` standstill '' its debt repayments until at least May 30 , 2010 . It added , to the market 's surprise , that the proceeds of a $ 5 billion bond issue raised hours earlier would n't be used to bail the company out . Odd timing was n't it ? Dubai 's decision to release its statement just before the Eid holiday in the Middle East , and on the eve of Thanksgiving in the U.S. , provoked consternation . `` Dubai have certainly picked their moment to finally own up to a need to restructure their debt . I would imagine the news has ruined a few Thanksgiving dinners today , '' David Morrsion , a strategist at GFT told the Financial Times . Read CNN 's John Defterios ' take on the Dubai debt fears . How did the markets react ? Banking stocks led equity markets lower in London and Europe as traders moved to distance themselves from a potential debt hole in the Middle East . Technical problems in London halted trade for some time , providing further frustration for traders with exposure to Dubai World 's lenders . What is Dubai World & Nakheel ? Described on its Web site as `` Dubai 's flag bearer in global investments , '' Dubai World is a holding company with stakes in everything from ports to real estate and transport . It includes the world 's largest privately held real estate company Nakheel , which is the mastermind behind such architectural feats as the man-made residential islands , `` The Palm Islands '' and `` The World . '' Dubai World also invests in global markets through its investment arm Istithmar World , which boasts a `` global footprint '' in finance , capital , leisure , aviation and other business ventures . How severe is the debt ? Dubai World is said to account for some $ 59 billion of Dubai 's $ 80 billion debt burden . Nakheel had been due to pay a $ 3.5 billion convertible loan which expires on December 14 . More debts were due to be repaid next year . `` This is not just a couple of billion story , '' Turker Hamzaoglu , EMEA economist at the Bank of America Merrill Lynch Global Research told CNN . `` For instance , Dubai has to service $ 10 billion including the Nakheel debt in December and $ 15 billion U.S. dollars by the end of 2010 , '' he added . How much damage has the announcement done ? That 's incalculable at this stage . Markets in the Middle East and the U.S. do n't open until next week so the full impact wo n't be known until then . It also depends on Dubai 's next move . The surprise announcement has shaken confidence in the Emirate as a place to do business . `` The key here is the communication of this strategy . I guess everybody is on the same page regarding the need for consolidation in Dubai and for the region . But the only market-positive implication would be if this comes with a clearly open and a predictable way , '' Hamzaoglu said . `` The problem is , here we have a lack of transparency and all these policy reactions are either coming at the last minute , or for example , the recent one just before the long holiday . '' `` I think this is going to shake some investor confidence which may not be reversed as quickly as people expect . So they have to be careful , '' he added . Who will bail them out ? Abu Dhabi has been a lucrative source of funding for its neighbor . The $ 5 billion bond issue was take up by UAE banks . The question now is whether it will continue to give its backing to its debt-laden neighbour . It may have the money to do so , but does it have the will ? What comes next ? Ideally , the market wants guidance as to Dubai 's debt strategy . It has said that the Dubai World debt freeze is the first stage of a restructuring plan . Investors want to know what comes next . Right now , the region is seen as a risky bet for nervous investors . Hamzaoglu says there are other options for those who want to back similar markets . `` From an investor perspective , if you want to still play for the global backdrop of oil prices , etc . there are some other markets , say Brazil or Russia , that investors can be interested in , rather than taking this high risk for the region , '' he said .
London stuns global investors by calling for a debt `` standstill '' on Dubai World 's and Nakheel debts . Market reactions restrained by public holidays in the Middle East and the U.S. Nakheel is Dubai World 's real estate arm , owns the U.S. Nakheel , '' and `` The World said to account for $ 59 billion of Dubia 's $ 59 billion debt .