Not a perfect storm

A desert not a perfect storm.

Well, not yet.

Markets hate uncertainty but the onus is on them not to panic.

Nakheel, the property developer owned by Dubai World, asked its three sukuks - Islamic bonds – that are traded on the Dubai stock exchange be suspended. This includes the $4b sukuk due to mature on December 14, which triggered the current crisis.

As we go to press, there is little or no clarity from that quarter, or indeed much to go from the respective governments of Dubai and its richer neighbour Abu Dhabi. Like many siblings, the rivalry between the two can be intense and the suspicion is that Abu Dhabi is playing hard ball.

Abdulrahman al-Saleh, Dubai's department of finance DG, said on Dubai TV that creditors had to take responsibility for their own lending decisions and that global markets had overreacted to the news. As traders in the Middle East and US returned from respective holidays, frustration at the lack of information was understandable - but there is finance enough in the region to reschedule the debt and to manage it.

The politics are mind bogglingly complex and won’t be rushed by histrionics and short-term sell-offs.

It's tempting to customise and flog a sukuk version of the sober-sided Walker Report published last week which aims to ensure this sort of thing doesn't happen again.

One downside of more regulation however is that financial statements of listed companies have grown by 57% in the four years to 2009 and according to Deloitte, if 6% increases of 2008/2009 increase is repeated every year through to 2020, the average length will be over 100 pages solely for the audited financial statements.

Isobel Sharp, audit partner at Deloitte, said that for the foreseeable future, financial statements will continue to get longer and longer as companies comply with the new rules that are coming into effect over the years ahead. This continuing increase is a concern to many.

The other concern many businesses have as we approach the last few weeks of 2009 and the certainty of an election 8in 2010 is the weight of public sector debt and how to manage and minimise it going forward.

Michael Izza, chief executive of the ICAEW said yesterday: "All future policy decisions will be taken in the context of a huge hole in the public sector purse which will take decades to mend."

He and others wants the chancellor to use his PBR statement on 9 December to explain how he plans to tackle the fast growing £800m deficit.

As Sir Stuart Rose approaches the end of his tenure at M&S, and having performed a much needed turnaround at the retailer, he wants the government to be aware of the impact of increased VAT.

It's coming, he said, we can't avoid it, and from early January consumers will be paying tax on goods in 2010 that they were spared during 2009. All businesses but especially retailers, will have to consider the practical impact of repricing, not least whether they start to slowly increase prices from now to allow them to spread the impact (both practical and financial) over the next few months.