Turbulent times in infrastructure spending: Fund managers have expressed concerns over pouring funds in infrastructure projects due to “uncertainty over the outlook for green energy subsidies and tariffs, ahead of a US presidential election,” according to the Financial Times.

The why: Republican candidate Donald Trump’s return to office could possibly mean bidding farewell to incentives for domestic industry and clean tech under the Biden administration’s Inflation Reduction Act. This has put funds in a position where they can’t accurately cost or price a project. “We have to be more cautious over the next 12 months on committing to projects. There’s a bit of a stalling of momentum until we have more certainty around costs,” saud Quinbrook Infrastructure Partners Co-founder David Scaysbrook.

What’s next? Some asset managers expect a pick up in investment activity following election results in November, with the demand and need being there, while others expect some pullback.

Despite all this, investors continue to have an appetite for infrastructure funds: North American infrastructure funds raised some USD 10 bn during the first half of the year, a 150% y-o-y increase, in addition to another USD 7 bn raised between July and August. Investor appetite is expected to continue and even rise as fund managers view the funds as a safe haven for investors looking to put their funds in high-yielding assets ahead of upcoming rate cuts.

MARKETS THIS MORNING-

Asian markets are in the red in early trading this morning, as traders react to US big tech stocks falling the day before as Western markets get ready for Nvidia earnings out Wednesday. Japan’s Nikkei is down 0.3%, Korea’s Kospi is down 0.5%, and China’s Hang Seng is down 0.9%.

ADX

9,356

-0.2% (YTD: -2.3%)

DFM

4,325

+0.8% (YTD: +6.5%)

Nasdaq Dubai UAE20

3763.8

+0.4% (YTD: -2.0%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

5.0% o/n

4.5% 1 yr

TASI

12,261

0.0% (YTD: +2.5%)

EGX30

30,134

+0.2% (YTD: +21.1%)

S&P 500

5,617

-0.3% (YTD: +17.8%)

FTSE 100

8,328

+0.5% (YTD: +10.8%)

Euro Stoxx 50

4,897

-0.3% (YTD: +8.3%)

Brent crude

USD 81.43

+3.1%

Natural gas (Nymex)

USD 1.97

+0.9%

Gold

USD 2,553.50

+0.3%

BTC

USD 63,414.90

-1.2% (YTD: +50.2%)

THE CLOSING BELL-

The DFM rose 0.8% yesterday on turnover of AED 292.1 mn. The index is up 6.5% YTD.

In the green: Amanat Holdings (+6.3%), Commercial Bank of Dubai (+3.3%) and Dubai Financial Market (+3.2%).

In the red: National International Holding Company (-9.5%), AL Salam Sudan (-4%) and Taaleem Holdings (-1.7%).

Over on the ADX, the index fell 0.2% on turnover of 1.06 bn. Meanwhile, Nasdaq Dubai rose 0.4%

CORPORATE ACTIONS-

The National Investor’s planned AED 50 mn capital reduction, initially scheduled for yesterday, has been delayed due to pending approval from the economy ministry, according to an ADX disclosure (pdf). The company affirmed that the process is ongoing and the distribution of the value of canceled shares will proceed once it secures the ministry’s approval.

Background: Last month, the company obtained shareholder approval to bring its share capital down by canceling 50 mn shares with a book value of AED 50 mn — reducing its share capital to AED 235 mn from AED 285 mn, with the AED 50 mn initially scheduled to be returned to shareholders on 26 August.

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