The UAE’s non-oil private sector continued to expand in August

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What we're tracking today

TODAY: UAE’s PMI report is in + Noatum Logistics launches a new rail service

Good morning, friends. It’s a calm day on the regional logistics news front with updates from the UAE from the tracks and trade sectors and an update on Talabat’s forthcoming IPO. First, a heads up on what could be a very collaborative day in Turkey…

HAPPENING TODAY-

El Sisi touches down in Turkey: Egyptian President Abdel Fattah El Sisi lands in Turkey for the first time today since assuming office as the two countries seek to mend fences and build diplomatic and economic ties, Turkey’s Directorate of Communications confirmed. El Sisi is set to meet with Turkish president Recep Tayyip Erdogan and together chair the first meeting of the long-stalled high-level Strategic Cooperation Council between the two countries in the works since 2010.

On the agenda: Although details from the Turkish side are skimpy and Egypt has yet to release a statement on the trip, but the visit will include “discussions on all bilateral and international issues, as well as the signing of numerous agreements and MoUs in various areas,” talk show host Ahmed Moussa told his viewers on Ala Mas'ouleety earlier this week (watch, runtime: 2:21). Al Arabiya’s Turkey correspondent also told talk show host Amr Adib that economic relations and cooperation in areas such as tourism, transportation, and the defense industry, alongside expanding the countries’ joint freetrade agreement would be on the agenda.

The two countries are “opening a new chapter,” El Sisi said in a presser when Erdogan made his first visit in over a decade in February (watch, runtime: 15:15). The two sides have been working to mend a decade of tense relations triggered by a host of issues, including Erogan’s support for the Muslim Brotherhood, competing interests in Libya, and tensions over gas resources in the Eastern Mediterranean. Under this new relationship, the two countries are planning to boost annual bilateral trade from USD 6.6 bn in 2023 to USD 15 bn in the next few years.

WATCH THIS SPACE-

#1- Adnoc is gearing-up to tap the debt market with a USD-denominated bond issuance, featuring five-, 10-, and 30-year tranches, Reuters reported this week, citing the IFR. JP Morgan and Morgan Stanley were tapped as global coordinators to arrange investor meetings starting yesterday. The two-day roadshow for the offering wraps up today, Bloomberg adds. Adnoc set up an SPV for the debt sales two years ago.

In an expansionist mood: Adnoc is ramping up production here at home and pursuing high-profile acquisitions abroad, including a potential EUR 11.7 bn bid for German chemicals maker Covestro.

REMEMBER- Adnoc and Saudi Aramco reportedly began studying bids in July for Australian oil and gas firm Santos. The company has a market value of some USD 16.7 bn, and has liquefied natural gas projects in Australia, Papua New Guinea and Timor-Leste. The energy giant has also acquired a 10% stake in a concession in Mozambique's Rovuma basin, as well as an 11.7% stake in the first phase of sustainable liquefied natural gas (LNG) producer NextDecade's USD 18 bn Rio Grande LNG export facility in Texas.

ADVISORS- The offering will see BofA Securities, Citi, and First Abu Dhabi Bank act as active bookrunners, while our friends at HSBC will be passive bookrunners alongside Abu Dhabi Commercial Bank, Mizuho, and SMBC Nikko.

#2- The order book for NMDC Energy’s ADX IPO was 14x oversubscribed as day four of the subscription period came to a close yesterday, according to a statement. Today is the last day for investors to get their orders in.

BACKGROUND- NMDC is listing a 23% stake in its engineering, procurement, and construction unit NMDC Energy on the ADX. The transaction is due to wrap up on 11 September. Offer shares are priced at AED 2.80 each, valuing the transaction at AED 3.22 bn. NMDC’s board approved the IPO last month.

#3- Egypt is looking to boost its grain silo storage capacity by 76% by 2030, an increase to 6 mn tons, Asharq Business reported, citing comments by Egypt’s Deputy Minister of Supply Walid Abu Al-Magd. The plan is to localize Egypt’s silos and increase storage duration capacity from six to nine months over two phases.

The breakdown: The first phase will see the development of silos with a capacity of 1.4 mn tons by 2027 with a total investment of EGP 19 bn, while the second phase will target an additional 1.2 mn tons by 2030 with an EGP 15 bn investment. A company has also been established to localize the silo industry in the East Port Said economic zone.

We knew this was coming: The ministries of supply and investment have been looking into pouring investments into the country's silo infrastructure and increasing the storage capacity of silos owned by the Egyptian Holding Company for Silos and Storage. The SCZone also inked a MoU back in April with Poland-based grain protection and storage firm subsidiary Feerum Egypt to build a EGP 1.6 bn grain storage silo manufacturing factory in the East Port Said Industrial Zone. Egypt’s Supply and Internal Trade Ministry has inked a USD 56 mn agreement back in March with the French Development Agency to develop six grain silos in six governorates.

IN OTHER EGYPT NEWS- Egypt’s ENR will pay back its dues: Egyptian National Railways (ENR) has reached an agreement with the Egyptian General Petroleum Corporation (EGPC) to settle EGP 6 bn (c. USD 123 mn) in debt over five years, Asharq Business reported, citing a government official. The debt has been accumulating since 2016 on the back of the impact of economic reforms, including the surge in petroleum derivative prices, which affected the country’s railways particularly heavily given its reliance on diesel to operate.

MARKET WATCH-

#1- Oil prices fell in early morning trading, extending losses of over 4% from yesterday on the back of a possible resolution to the political dispute in Libya, Reuters reported. Brent crude futures for November fell 0.5% to USD 73.38 a barrel by 03.30 GMT while West Texas Intermediate (WTI) futures for October dropped 0.6% to USD 69.93 a barrel.

#2- Baltic index stays steady on upwards trajectory: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — rose 1.5% to 1,947 points on Tuesday, maintaining its highest increase since mid-July. The capesize index is buoying the index with an increase of 3.1% to 3,349 points, boosted by coal and bauxite shipments to China. The panamax index shed an additional 5 points coming in at 1,300 points, while the smaller supramax index lost another 9 points to 1,280 points.

DATA POINT-

Abu Dhabi’s non-oil exports rose to AED 40.14 bn in 2Q 2024, up 10% y-o-y from AED 36 bn in 2Q 2023, according to the latest data (pdf) from the emirate’s statistics center. This growth was driven by the robust activity in the business sector, with exports growing to AED 39.7 bn, largely due to an increase in gold exports, which boosted the value of goods classified under the Standard International Trade Classification (SITC) to AED 15.52 bn, the center said. On the import side, Abu Dhabi’s non-oil imports dipped 3% y-o-y in 2Q to AED 33.85 bn.

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CIRCLE YOUR CALENDAR-

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.

The UAE will host the Intelligent Transport Systems World Congress from Monday, 16 September to Friday, 20 September in Dubai. The Congress is expected to welcome 20k participants to explore innovations in smart mobility and transportation technology.

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.

UAE’s non-oil private sector continued to expand in August

How the UAE’s non-oil private sector performed in August: Purchasing manager indices (PMI) tracking non-energy sectors in the UAE recorded growth momentum on the back of a spike in new orders – specifically recording a jump new export orders, according to S&P Global’s PMI (pdf). The UAE’s PMI headline figure rose to 54.2 in August, up from 53.7 in July, holding above the 50.0 mark threshold.

REFRESHER- The all-important 50.0 mark is the threshold separating contraction from growth. Anything above 50 denotes expansion, while anything below indicates contraction.

An uplift in new orders accelerated non-oil business activity to a five month high, with new export orders growing at their quickest pace in nearly a year in response to international demand. In turn, purchasing activity also rose and input stockpiling marginally resumed.

Overall output levels rose at a steady but soft pace, albeit at the slowest paces recorded in the past three years. Delivery times dropped as vendors reshuffled their schedules. Work backlogs jumped up in August, yet the rate of accumulation was the softest in nearly eight months. Performance pressures eased in August, yet supply chains are still recovering from floods earlier this year and operations are still grappling with the response to Red Sea shipping disruptions.

Input costs and output pricing dragged down the indices: Output prices grew, albeit marginally, for the fourth month running in response to market cost pressures. The non-oil private sector also recorded a sharp upturn in average input costs in August, with expenses rising across a variety of operational sectors, including transport, IT equipment, raw materials and maintenance equipment. Employment rates fell in August, dropping to its softest rate in seven months.

Sentiment remained optimistic: Overall confidence was boosted in August after dipping to a six-month low in July, with non-oil firms forecasting domestic output growth to be sustained over the coming year. “Sales pipelines remain strong and firms have ample levels of outstanding work to complete,” Senior Economist David Owen said in the report.

AD Ports’ Noatum Logistics launches new rail service

AD Ports’ Noatum Logistics has inaugurated a new rail shuttle service connecting the UAE’s Khalifa Port and Fujairah Terminals via Etihad Rail, according to a press release. The service will operate weekly using a single train with a handling capacity of 156 TEUs or 78 FEUs, increasing logistics capacity and offering potential for first- and last-mile truck integration.

More to come? Noatum Logistics may also expand the number of weekly departures between Khalifa Port and Fujairah Terminals and could potentially introduce new shuttle services across the broader regional rail network depending on demand, the statement said. The service is scalable and suited to manage large bulk shipments over medium to long distances, along with containerized, oversized, and general cargo.

Noatum is fairly new to the Middle East: Abu Dhabi-based AD Ports fully acquired the Spanish logistics company back in July 2023 in a EUR 660 mn transaction as part of a wider expansion plan. Noatum is present in US, Chinese, and Southeast Asian markets and recently acquired Egyptian maritime services provider Safina.

Delivery Hero moves forward with Talabat IPO

Delivery Hero taps banks Talabat’s DFM listing: German last-mile delivery firm Delivery Hero has appointed Emirates NBD, Morgan Stanley, and JP Morgan to work on the upcoming IPO of its food delivery unit Talabat on DFM, Bloomberg reports, citing people it says are familiar with the matter. Delivery Hero may also appoint additional banks for the share sale.

A USD 1 bn sale? The business information service thinks the transaction could be worth c. USD 1 bn, but no decisions have been made on valuation. Delivery Hero signaled that it’s not looking to raise fresh capital and is instead offering existing shares for sale. It plans to retain a majority stake after the IPO goes through.

By the numbers: RBC Capital Markets says Delivery Hero does EUR 5 bn worth of business in the MENA region, and Bloomberg Intelligence gives Talabat an enterprise value of c. USD 6 bn.

Talabat is set to debut on DFM in 4Q 2024. The transaction is waiting for approval from the Securities and Commodities Authority.

Shipping and rail updates from KSA and Iran

SHIPPING + MARITIME-

Folk Maritime secures its first Saudi-flagged container vessel: Saudi shipping firm Folk Maritime has acquired its first KSA-flagged vessel — the 172 m M/V Folk Jeddah — which will be registered at Jeddah Islamic Port, according to a statement. The vessel has a handling capacity of 1,868 TEUs, a cargo carrying capacity of 18k tons, and is equipped with 230 reefer plugs for temperature-controlled cargo.

EQUIPMENT-

Alexandria Port Authority cracks down on equipment upgrades: The Alexandria Port Authority has instructed companies involved in loading and unloading cargo from ships — known in the industry as stevedoring — to develop a five-year plan for upgrading their equipment, Al Mal reports, citing a circular by the authority. The initiative, which will prohibit companies from using outdated equipment after the five-year deadline, aims to align shipping and unloading rates with global standards.

RAIL-

First freight train from Ulyanovsk to Azerbaijan to depart soon: A direct freight service between Russia’s Ulyanovsk, Azerbaijan’s Baku, and Iran’s Astara proveniences is slated to launch, effective from the end of September, TASS reports, citing a statement from Ulyanovsk regional governor Alexey Russkikh. The train will hold at least 70 cars and will have a capacity of some 3.5k tons of goods. It is expected that some 200k tons of goods will be transported along the route annually.

OTHER STORIES WORTH KNOWING THIS MORNING-

Air India deploys A350-900 on Delhi-London route: India’s flag carrier airline Air India has deployed a new A350-900 aircraft to its twice-daily service from Delhi to London’s Heathrow. (Simple Flying)
Etihad flies to Mumbai: Etihad Airways has launched three weekly flights from the UAE’s Abu Dhabi to India’s Mumbai International Airport (BOM), which will operate until 31 December. (Statement)
Exim + Amic + Toho Titanium ink credit facility agreement: KSA’s Export-Import Bank (Saudi EXIM Bank) has inked a SAR 50 mn (c. USD 13 mn) credit facility agreement with Saudi-based Advanced Metal Industries Cluster (AMIC) and the AMIC Toho Titanium Metal (ATTM) to help boost the companies’ exports. (SPA)

Canada-China trade disputes continue + Russia presses on with dark fleet operations

Canada and China go tit-for-tat: China has revealed plans to launch an anti-dumping investigation into Canadian canola imports and chemical products shortly after the country said it would impose a 100% tariff on EVs and a 25% tariff on steel imports from China, Reuters reports. “Canada's canola exports to China have increased significantly and are suspected of dumping, reaching USD 3.47 bn in 2023, with a 170% y-o-y increase in volume and a continuous decline in price,” a spokesperson for China’s Ministry of Commerce said in a statement.

In numbers: China — the world’s biggest oilseed importer — imports more than half of Canada’s canola output. China’s rapeseed meal futures increased 6% on the Zhengzhou Commodity Exchange to CNY 2,375 (c. USD 333.56) per metric ton following the announcement — its highest since 6 August. China’s rapeseed meal prices dropped 22% in 2024 amid abundant oilseed supply and rising domestic production.

China could look elsewhere: China could potentially turn to Australia and Ukraine for alternative supplies. “We expect China to buy larger volumes from Australia if restrictions on Australian canola are eased,” director at Sydneys’ Ikon Commodities Ole Houe told the newswire.

Russia presses on with dark fleet operations: Palau-flagged LNG carrier Everest Energy is preparing to return to the sanctioned Arctic LNG 2 facility in Russia to take on fresh cargo of super-chilled fuel as Russia moves forward with exports despite US sanctions, Bloomberg reports, citing ship-tracking data and satellite images. Everest Energy is reportedly making its way to the Saam floating storage unit in Russia’s Murmansk region.

REFRESHER- The US slapped restrictions on the Arctic LNG 2 facility last month for being part of Russia’s alleged dark fleet to curb Moscow’s plan for LNG deliveries. The Saam unit was also subjected to sanctions last year.

Russia found a loophole: Although the sanctions have scared away international companies and stopped the delivery of ice-ready carriers, Russia is suspected of resorting to shadow vessels that mask their location to begin exports. Several companies — largely registered in the UAE — with alleged links to Russia have been acquiring dozens of LNG vessels seemingly as part of a plan by Moscow to expand its dark fleet operations.

Hong Kong’s Cathay Pacific Airways is performing maintenance on its Airbus A350 jets after the in-flight failure of an engine component on Monday, according to a statement. The carrier’s engineering team identified 15 aircraft with affected engine components that require replacement, with three having already undergone repairs. Cathay Pacific had suspended 24 return flights until Tuesday as a precautionary measure, Reuters writes. The company says that operations are set to resume on 7 September.

ICYMI- Cathay Pacific announced it was inspecting all the Rolls-Royce-made engines on its Airbus A350 jets after an in-flight engine component failure, causing shares in the British engineer supplier to go down significantly, the newswire writes. The problem reportedly surfaced on a Zurich-bound flight several minutes after take-off from Hong Kong, forcing the plane to turn back and land 75 minutes after departure, according to Flightradar24 tracking data.

OTHER STORIES WORTH KNOWING THIS MORNING-

Volvo to launch long range electric trucks: Sweden’s Volvo — which is majority owned by China’s Geely — will launch a new long-haul model of its FH Electric truck in 2Q 2025. The company managed to increase battery capacity by combining the motor, gearbox, and axle into one component which makes the truck able to cover 600 kms per charge. (Reuters)

Calendar

SEPTEMBER

3-5 September (Tuesday-Thursday): Egypt International Airshow, El Alamein, Egypt.

10-11 September (Tuesday-Wednesday): SkyMove MENA, Riyadh, Saudi Arabia.

12 September (Wednesday): Deadline for companies to submit bids for expansion and operation of Baghdad’s International Airport.

18-19 September (Wednesday-Thursday): Saudi Maritime & Logistics Congress, Dammam, Saudi Arabia.

23-25 September (Monday-Wednesday): WorldFreezonesOrganization’s Annual International Conference and Exhibition (AICE), Dubai, UAE.

23-26 September (Monday-Thursday): Freight Summit Global Conference, Dubai, UAE.

25-26 September (Wednesday-Thursday): Global Aerospace Summit, Abu Dhabi, UAE.

30 September - 2 October (Monday-Wednesday): African, Middle East & Islamic Finance Aviation 100 Awards, Dubai, UAE.

OCTOBER

6-8 October (Sunday-Tuesday): Routes World 2024, Bahrain.

8-10 October (Tuesday-Thursday): The Global Rail Transport Infrastructure Exhibition and Conference(Global Rail), Abu Dhabi, UAE.

7-9 October (Monday-Wednesday): AFSIC – Investing in Africa, London, UK.

8-10 October (Tuesday-Thursday): AntwerpXL Expo, Antwerp, Belgium.

12-14 October (Saturday-Monday): Global Logistics Forum 2024, Riyadh, Saudi Arabia.

13 October (Sunday): International Transport Workers’ Federation (ITF) Congress, Marrakesh, Morocco.

16-17 October (Monday-Tuesday): Global Airport & Aviation Forum, Jeddah, Saudi Arabia.

21-22 October (Monday-Tuesday): Smart Ports & Logistics Transformation Summit, Riyadh, Saudi Arabia.

22-24 October (Tuesday-Thursday): Asean Ports and Logistics, Johor, Malaysia.

22-24 October (Tuesday-Thursday): Global Ports Forum, Singapore.

26-27 October (Saturday-Sunday): International Conference on Tourism, Transport, and Logistics, Dubai, UAE.

NOVEMBER

11-12 November (Monday-Tuesday): World Advanced Manufacturing Logistics Summit & Expo, Riyadh, Saudi Arabia.

11-12 November (Monday-Tuesday): Saudi Airport Exhibition, Riyadh, Saudi Arabia.

11-14 November (Monday-Thursday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi, UAE.

13-15 November (Wednesday-Friday): The Bahrain International Airshow, Sakhir Airbase, Bahrain.

18-20 November (Monday-Wednesday): The Heavy Equipment and Truck Show, Damman, Saudi Arabia.

19-21 November (Tuesday-Thursday): Saudi International Maritime Forum, Dammam, Saudi Arabia.

18-19 November (Monday-Tuesday): G20 Summit, Rio de Janeiro, Brazil.

20-21 November (Wednesday-Thursday): Saudi Rail Exhibition, Riyadh, Saudi Arabia.

DECEMBER

2-3 December (Monday-Tuesday) Wings of Change Middle East, Riyadh, Saudi Arabia.

10-11 December (Tuesday-Wednesday): Rail Industry Summit, Casablanca, Morocco.

10-12 December (Tuesday-Thursday): Middle East Business Aviation, Dubai, UAE.

20 December (Wednesday): The Iran-Senegal Joint Economic Cooperation Commission, Dakar, Senegal.

EVENTS WITH NO SET DATE

IATA Annual General Meeting (AGM) and World Air Transport Summit, New Delhi, India.

1H 2024: Civil Construction subcontracts for construction firms in Oman for implementation of the Abu Dhabi - Suhar rail link to be announced.

2H 2024: Bahri’s barges for Saline Water Conversion Corporation (SWCC) to begin initial and commercial operation.

King Salman Energy Park is set to become operational.

The Cross-Border Digital Trade Forum, Dubai.

2025

FEBRUARY

4-5 February (Tuesday-Wednesday): Seatrade Maritime Qatar, Doha, Qatar.

APRIL

16-17 April: Global Ports Forum, Dubai, UAE.

Mid-2025: Iraq will complete phase one of the construction of the Grand Faw Port.

DHL and Aramco’s logistics and procurement hub in Saudi Arabia will commence operations.

AD Ports-operated Safaga Port’s multi-purpose terminal will become operational.

Phase 3 of APM Terminals Tangier MedPort to be complete and operational.

1Q 2025: Sadr Park’s Logistics Center in Riyadh to be completed.

1Q 2025: Phase twoof Jafza Logistics Park to be completed.

NOVEMBER

4-6 November: The International Air Cargo Association TIACA’s Air Cargo Forum 2025, Abu Dhabi, UAE.

2026

2026 UNCTAD Global Supply Chains Forum, Saudi Arabia.

2027

4Q 2027: Oman’s Musandam Airport construction to be completed.

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