Good morning, nice people. There’s a lot of investment news to delve into this morning as Egypt inks several project agreements with the UAE to expand their industrial activities, along with a big aviation update from Ethiopia. First, let’s unpack some M&A and expansion stories we’re tracking…

WATCH THIS SPACE-

#1- GulfNav’s Brooge acquisition could take place this month: Nasdaq-listed Brooge Energy will hold an extraordinary general assembly on 26 August to appoint a new board of directors that will initiate signing procedures for its merger with maritime and shipping company GulfNav, Al Bayan reports. An undisclosed financial firm was hired to evaluate the transaction, while Hadef & Partners and Middle East Alliance Legal Consultancy (ME-Alliance) are handling legal affairs.

REMEMBER- Gulfnav submitted a proposal earlier in the year for the structure of the acquisition of oil storage outfit Brooge Petroleum and Gas Investment Company to the Securities and Commodities Authority, after submitting a proposal to fully acquire the company from Brooge Energy back in October 2023. The acquisition was initially expected to close in 4Q 2023. GulfNav said last month it aims to complete the evaluation within the coming weeks.

#2- Agility’s ground handling subsidiary Menzies Aviation plans to make an “aggressive” expansion in the GCC — including the UAE and KSA — over the next five years, Chairman Hassan El-Houry told Gulf News. “Saudi Arabia aims to triple its number of passengers to 250 mn by 2030. They plan to invest USD 100 bn in aviation infrastructure to achieve this. We want to be a part of that and will be,” El-Houry told the news outlet. Menzies Aviation recently launched operations in Spain, Portugal, Hong Kong, Jamaica, Peru, and Panama with operational presence in over 295 airports across 65 countries.

#3- Adnoc L&S is set to leverage its “strong cash flow after dividends and strong debt capacity” to invest in more acquisitions, CFO Nicholas Gleeson told Bloomberg in an interview (watch, runtime: 04:50) on Thursday. As a result of recent acquisitions, the firm now has “offices around the world to extend our shipping capabilities,” Glesson said.

Andoc remains positive but wary of ongoing geopolitical tensions. Although the industry is “almost fully adapted” to the ongoing Red Sea disruptions, we are seeing a “tightening in pricing across the industry,” Glesson warned.

ICYMI- Adnoc’s logistics arm recorded a 28% y-o-y increase in net income to USD 207.7 mn in 2Q 2024. The company attributes the strong performance to its growth strategy, which involves investing over USD 5 bn (AED 18.4 bn) in energy-related maritime logistics by 2028. The firm’s recent acquisition of Navig8 is expected to give Adnoc L&S a boost, with the first full FY following the acquisition expected to see a minimum 20% boost to its earning per share.

#4- Aramco expects to reach financial close on its planned stake purchase in EIG’s LNG unit MidOcean Energy this quarter, Argaam quotes Aramco CEO Amin Nasser as saying in an investors’ call last week. The oil giant agreed in September 2023 to acquire a USD 500 mn minority stake in MidOcean Energy.

International expansion in the cards: The company will announce more investments in China this year or next, Nasser said without elaboration. South Korea and India are on the company’s radar for potential investments, with expectations for potential tenders from Tokyo and Seoul, Nasser said, without providing further details.

What’s next? Aramco plans to increase its drilling rigs to 300 by the end of this year, and ramp up its gas operations by over 60% by 2030.

#5- Iran is expanding its crude oil exports to new destinations as it boosts output, including Bangladesh, China, Oman, and Syria, Reuters reported on Friday. Iran, which does not need to abide by OPEC+ output quotas, aims to increase its production and exports. The country sold crude oil to 17 countries, including in Europe, in July, Iran’s Mehr news agency said, citing Oil Ministry Javad Owji. Reuters could not corroborate these details.

Circumventing US sanctions: Iran has used ship-to-ship transfers to sidestep US sanctions in their shipments to Bangladesh and Oman, US advocacy group United Against Nuclear Iran analyst Claire Jungman told the newswire. Cargo from a Liberia-flagged tanker was unloaded around Bangalesh’s Chittagong port, after being loaded at Iran’s Kharg Island in April, according to oil export tracking sources. A tanker suspected of holding Iranian crude delivered cargo to Oman’s Sohar Port in June after loading via a ship-to-ship transfer from a vessel that loaded at Iran’s Kharg Island, Jungman said. Iran has also launched cargo deliveries to China’s Dalian port.

SPEAKING OF IRAN- The country’s airspace is a bit messy right now: Several airlines have suspended flights, or rerouted to avoid Iranian and Lebanese airspace, over fears of a potentially expanding regional conflict, Reuters reported on Friday. The UK has urged its airlines to avoid Lebanese airspace from 8 August until 4 November over “potential risk to aviation from military activities.” Egypt also asked their airlines to avoid Iranian and Lebanese airspace last week. “All Egyptian carriers shall avoid overflying Tehran (Flight Information Region). No flight plan will be accepted overflying such territory,” according to a separate Reuters report.

Which airlines adjusted their services? Lufthansa extended its suspension of flights to and from Tel Aviv, Theran, Beirut, Amman, and Erbil until tomorrow. Singapore Airlines stopped flying over Iranian airspace and is diverting through alternative routes. Air Algerie suspended flights to and from Lebanon until further notice and Air India suspended flights to and from Tel Aviv until further notice. KLM canceled all its flights to and from Tel Aviv until 26 October. US carrier Delta Airlines extended its suspension of flights between New York and Tel Aviv until 31 August and United Airlines has paused all flights to and from Tel Aviv until further notice.

#6- The UAE has banned oil tankers flying Eswatini’s flag from arriving at Emirati ports, distancing itself from vessels associated with transporting Russian oil, Bloomberg reported on Thursday, citing a government circular (pdf) posted on the Port of Fujairah website. Eswatini is new in global shipping, with no ships sailing under its flag in 2023. While most of these ships' ownership is unclear, several Eswatini-flagged tankers have been involved in transporting oil produced in Russia and Iran, according to Kpler data.

Not the first flag banned: The decision follows a circular at the beginning of the year, which prohibited Cameroonian-flagged vessels due to concerns that many of the ships have been assembled to transport sanctioned Russian oil.

MARKET WATCH-

#1- Oil prices stayed steady in early morning trading holding onto last week’s gains buoyed by Middle East tensions and cooling inflation in the US, Reuters reports. Brent crude futures fell slightly by USD 0.07 to USD 79.59 a barrel by 00.21 GMT, while US West Texas Intermediate (WTI) futures rose by USD 0.02 to USD 76.86 a barrel.

#2- Russia went over its agreed upon OPEC+ production quota in July, exceeding the output target by some 67k bpd as a result of supply schedule issues, Reuters reported on Friday, citing a statement from Russia’s Energy Ministry. Russia’s quota, including voluntary cuts, is set at 8.98 mn bpd for June to September. Russia has said it is committed to abiding by production quotas and will compensate for the surplus output in its August and September production levels. It also said it will compensate for its excess production over the last four months in October to November as well as March to September next year.

REMEMBER- OPEC+ urged members last month to make up for breaching supply quotas in an effort to stabilize global oil markets. In June, OPEC+ decided to extend most of its crude oil production cuts well into 3Q 2024. The alliance will keep in place current production cuts of 3.66 mn barrels per day (bbl/d) until the end of this September, before beginning to phase out the cuts of 2.2 mn bbl/d over the course of a year from October 2024 to September 2025.

#3- Baltic index eases after a week of gains: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — fell 0.8% to 1,670 points on Friday. Capesize decreased 0.9% to 2,437 points, down for a second consecutive day. The panamax index was also down 1.3% to 1,599 points hitting a one-month low, while the supramax segment dipped 0.1% to 1,301 points.

#4- The Drewry World Container Index fell 3% to USD 5,551 per 40-ft container last week, according to the latest index readings. Spot rates for 40-ft containers are now 47% below the previous pandemic peak of USD 10,377 in September 2021, but 291% higher than the pre-pandemic rates of USD 1,420.

DATA POINT-

#1-Jordan recorded a rise in exports to JOD 807 mn in the first seven months of this year, up from JOD 798 mn the year prior, according to a statement. It also saw the number of certificates of origin issued grow by 5% y-o-y to 21.5k, rising from 20.5k last year. Iraq was the biggest recipient of exports, with a value of JOD 387 mn, followed by Saudi Arabia at JOD 64 mn, Egypt at JOD 61 mn, the UAE at JOD 52 mn, and Switzerland at JOD 50 mn.

#2- Cargo handled at Mawani’s ports increased 9.1% y-o-y in July to 27.4 mn tons, the Saudi Ports Authority (Mawani) said in a statement. The number of import containers grew 15.7% y-o-y to 271.5k containers, while export containers declined 2.5% to 243.8k. Meanwhile, maritime traffic dropped 11.2% y-o-y last month, and the number of passengers dropped 32%, to 52.2k.

#3- Egypt’s food exports were up 25% y-o-y in 1H 2024 to record USD 3.2 bn, according to a statement from the Egyptian Food Export Council. Exports to other Arab nations accounted for 52% of total food exports, while EU-bound exports accounted for 22%.

THE ENTERPRISE FINANCE FORUM-

Are you planning to be in Egypt on 24 September? You may be interested in attending our 2024 Enterprise Finance Forum. Seating is strictly limited at our flagship, invitation-only forum for C-suite executives and other senior leaders.

Why attend? We’re in the early days of a generational realignment of power in our industry — in our region and beyond — and on the cusp of the biggest intergenerational transfer of wealth the world has ever seen. With that as the backdrop, we’re going to take stock of where we stand six months after the float of the EGP and ask what’s next for finance in Egypt and the wider region. Among the questions we’ll be asking:

• What roles will Egypt, Saudi and the UAE play in the regional industry going forward?
• What are foreign investors looking for right now?
• Is real estate the only asset class in Egypt?
• What does the next generation of leaders think as they take over established family businesses?

Do you want to request an invitation? Tap or click the image below.

CIRCLE YOUR CALENDAR-

Saudi Arabia will host the Saudi Warehousing and Logistics Expo on Monday, 2 September to Wednesday, 4 September in Riyadh. The event will bring together leaders in the supply chain, warehousing, and logistics industry from across the Kingdom to discuss investments, trade, geopolitical risks, and localized manufacturing.

Egypt will host the Egypt International Airshow on Tuesday, 3 September to Thursday, 5 September in El Alamein. The event will host a range of discussions touching on industrialization, digitalization, and globalization in the regional commercial aviation sector. During the event, aircrafts and innovative aerospace products, and services will be showcased.

Saudi Arabia will host SkyMove MENA on Tuesday, 10 September and Wednesday, 11 September in Riyadh. The event will gather global industry stakeholders, experts, and service providers to discuss challenges in the regional aviation industry.

Saudi Arabia will host the Saudi Maritime and Logistics Congress on Wednesday, 18 September and Thursday, 19 September in Dammam. The event will gather international industry leaders in the maritime sector to discuss a range of topics including interconnected logistics, supply chains, digitalization, decarbonization and workforce development.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.