Good morning, friends. We knew it would get busy as the week kicks off with Idex and Navdex and Gulfood, as well as multiple diplomatic meetings taking place in the UAE — but it’s even busier than we thought it would be.

Besides the more than AED 4 bn in defense contracts inked at Idex, and the economic partnership agreement inked with Ukraine, we also have news of Huda Beauty finally spinning off its fragrance unit Kayali, Mubadala investing in Apleona, and Abu Dhabi issuing a resolution on the establishment of endowment entities.

?️WEATHER- The weather is still unstable today, with showers expected in Dubai towards the evening and temperatures dropping slightly to highs of 26°C and an overnight low of 21°C. Meanwhile, Abu Dhabi will be mostly cloudy and could see some rainfall late in the evening, with temperatures peaking at 22°C and reaching an overnight low of 20°C.

WATCH THIS SPACE-

#1- Abu Dhabi Investment Authority-backed Haryana-based eyewear retailer Lenskart is gearing up for a blockbuster USD 1 bn IPO on both India’s NSE and BSE, with plans to file its draft prospectus by May 2025, sources told the Economic Times. The company — which is also backed by Japan’s SoftBank Vision Fund and Singapore’s state-owned Temasek — is said to have tapped Morgan Stanely and Kotak Mahindra Bank as underwriters for the IPO, which could take place any time this year. Lenskart is reportedly seeking a USD 10 bn valuation at listing — nearly double the initial potential amount — after it raised USD 200 mn in a secondary funding round last year.

The Abu Dhabi sovereign wealth fund is Lenskart’s largest shareholder. Adia bought a 10% stake in the Indian company back in 2023 in a USD 500 mn purchase agreement comprising new and existing shares. Other investors in the company — namely Fidelity and Kedaara Capital — were also said to be mulling participation in the planned IPO.

#2- FlyDubai eyes entry into India’s aviation market via Busy Bee bid for Go First: Homegrown budget airline FlyDubai is exploring a potential foray into India’s domestic aviation market through a JV with India’s Busy Bee Airways, which is seeking to acquire the intellectual property for the now-bankrupt airline Go First, Moneycontrol reports. The move would make way for the creation of a new low-cost carrier in India, leveraging Go First's intangible assets — think trademarks, flying rights and airport slots — while excluding its physical assets, such as land holdings in Mumbai’s Thane District.

It’s still early: The total size of the transaction, post-collaboration ownership structure and potential timeline for the move remain under wraps. Still, Busy Bee is reportedly offering roughly USD 115.1 mn for Go First’s licenses and digital assets in a bid that’s pending approval from the National Company Law Appellate Tribunal (NCLAT) after Go First was ordered into liquidation by the National Company Law Tribunal (NCLT) last month.

#3- Shuaa Capital’s shareholders approved the issuance of its AED 425.5 mn mandatory convertible bonds (MCB) and their conversion into shares, increasing its capital by the same value, according to a DFM disclosure (pdf). The company secured binding commitments for the first tranche of its MCBs last week, valued at up to AED 150 mn. Albaher Real Estate Development, United Motors and Heavy Equipment Company, and Eshraq Investments subscribed to the offering through private placements.

REFRESHER- Shuaa Capital had said it plans to issue a total of AED 642.5 mn in mandatory convertible bonds as part of its capital optimization efforts, after it underwent restructuring last year following substantial losses in 2023. The latest issuance comprises a first tranche that includes bonds valued at up to AED 150 mn offered to institutional investors, set to be converted into shares at a rate of AED 0.32 per share, and a follow-up issuance with a maximum value of AED 275.5 mn offered to existing bondholders.

#4- Damac taps advisors for potential sukuk offering: Damac Real Estate Development has tapped advisors to organize fixed income investor calls that may be followed by a 3.5-year benchmark Reg S, USD-denominated, senior unsecured sukuk offering, Zawya reports, citing the International Financing Review. Damac reportedly received a Ba2 rating from Moody’s with a positive outlook and a BB rating from S&P with a stable outlook.

SOUND SMART- A USD-denominated Reg S issuance is a subordinated USD-based financial instrument offered to non-US investors. The fact that it’s benchmark-sized means the issuance will be at least USD 500 mn.

REMEMBER- Damac previously said it would rely on borrowing from banks, financial institutions, or bonds to finance 60-70% of its planned USD 20 bn data center.

ADVISORS- Emirates NBD Capital, HSBC, and JP Morgan were appointed as joint global coordinators and joint bookrunners, and our friends at Mashreq, alongside Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Goldman Sachs International, and Warba Bank as joint bookrunners.

#5- Sobha Realty’s parent company, PNC Investments, is considering issuing new sukuk upon the maturity of its current issuance in 2028, rather than tapping into an existing sukuk, Chief Financial Officer Nikunj Patel said during a global investor call, Business Outreach reports. While Sobha is not planning additional sukuk or eurobond issuances for now, the company is closely monitoring market conditions and may raise debt based on future opportunities, such as land acquisitions.

ICYMI- Last September Sobha extended its overall sukuk issuance to USD 500 mn by tapping an existing sukuk.

#6- Lulu to expand across the UAE: UAE-based Lulu Retail Group is set to open 15 new hypermarkets and express stores across Dubai and the Northern Emirates, focusing on the outskirts of major cities, Khaleej Times reports. “We are in discussions with several developers. We have 30 projects under consideration in the UAE, but none have been finalized yet,” said Lulu Retail CEO Saifee Rupawala.

… and in the KSA: The group is also expanding in Saudi Arabia, with plans to open 37 additional stores to reach 100 locations by 2028.

#7- Asian Infrastructure Investment Bank (AIIB) is mulling investments in the Gulf rail connection project, AIIB President Jin Liqun told Asharq Business, adding that the bank was in talks with regional finance ministers. The bank is also looking to support the development of regional infrastructure projects and drive a transition to carbon neutrality in the Gulf, he added.

SOUNDS FAMILIAR? A feasibility and traffic study for the 2.1kkm railway linking Kuwait, Saudi Arabia, the UAE, Oman, Bahrain, and Qatar was first completed back in 2023, with the project set to wrap up by December 2030. The initiative aims to link all Gulf states, enhance intra-regional trade, and improve movement.

The UAE is already working on its portion of the railway: Etihad Rail, Mubadala, and Oman’s Asyad Group launched a new entity — Hafeet Rail — to work on a railway connecting the UAE to Oman. The rail link is set to cut travel between Abu Dhabi and Sohar to 100 minutes, with freight trains moving at 120 km/h and passenger trains carrying up to 400 people at 200 km/h. The UAE is also planning a high-speed train project connecting Abu Dhabi and Dubai will cut travel time between the two emirates to 30 minutes.

HAPPENING TODAY-

#1-Ajman’s Department of Tourism Development launched a promotional tour across the UK to establish strategic partnerships and attract more British visitors to the emirate, state news agency Wam reports. Running until 21 February, the tour will cover Edinburgh, Newcastle, Reading, and London.

The UK is among Ajman’s top 10 tourism markets, with a 9% increase in visitors in 2024 and a 36% rise in average stay duration.

#2- The Abu Dhabi Department of Economic Development (ADDED) is leading a 140-member delegation to China, aiming to deepen investment and trade ties, stat -news agency Wam reports. The delegation, headed by ADDED Chairman Ahmed Jasim Al Zaabi, will visit Beijing, Shanghai, Shenzhen, and Hong Kong, meeting top Chinese officials and business leaders.

On the agenda: As part of the visit, an Abu Dhabi Investment Forum will take place in Beijing and Shanghai today and until Thursday, 20 February, offering Chinese investors direct engagement with Abu Dhabi’s economic leaders. Key Abu Dhabi entities like ADGM, Abu Dhabi Investment Office, Adnoc, Mubadala, and Kezad are participating, and are set to highlight potential investments across sectors including technology, finance, and energy. A separate Business Connect – Abu Dhabi-Shanghai event tomorrow will further strengthen business-to-business ties.

#3- Gulfood is back: The world’s largest annual food and beverage event, Gulfood, is on its second day today and runs until Friday, 21 February at the Dubai World Center. The event brings together over 5k exhibitors with some 1 mn food to source, with this year’s event focusing on sustainability and food security.

#3- The International Defence Exhibition (Idex) and Naval Defence and Maritime Security Exhibition (Navdex) are on their second day at the Abu Dhabi Exhibition Center today and until Friday, 21 February. The events will see policymakers, contractors and OEMs descend on the capital, with the events including roundtable discussions and a Navdex startup zone. Manufacturers like Calidus are set to ink supply and manufacturing agreements at the event, Wam reports.

THE BIG STORY ABROAD-

Anxiety and anticipation continue to set the tone in the foreign press this morning, as negotiations over Ukraine, Gaza, and Lebanon dominate headlines.

Ukraine summit stokes EU disagreements: The Paris-hosted crisis meeting saw European leaders clash over a suggestion put forward by UK Prime Minister Keir Starmer earlier to send peacekeeping troops to Ukraine. German Chancellor Olaf Scholz called the discussion “an incomprehensible debate at the wrong time,” while Italian PM Georgia Meloni doubted the measure’s effectiveness.

EU leaders are scrambling to get on the Ukraine peace train, as senior US and Russian officials are reportedly set to meet in Riyadh today to lay the groundwork for a Trump-Putin summit aimed at ending the Ukraine war, with meetings potentially taking place as early as this month. (FT | Axios)

MEANWHILE- US, China butt heads over Taiwan: The US state department website removed the phrase “We do not support Taiwan independence” from its website earlier this week in what it said was a “routine” update. The removal elicited a rebuke from Beijing, which called it a “serious regression” on the issue, urging the US to “immediately correct its mistakes” or risk “further serious damage.” (Semafor | CNN)

CLOSER TO HOME- Israel will remain in five “strategic” spots inside Lebanon, in what Beirut deems a violation of the withdrawal mandated by the ceasefire agreement, due today. Israel, on the other hand, claims truce commitments including disarming Hezbollah were not fulfilled. (Bloomberg)

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MARKET WATCH-

Is Opec+ mulling another delay of supply hikes? Opec+ is mulling another delay of a series of monthly supply increases that are set to begin in April, with some fearing that global markets are too unstable to absorb a production increase, Bloomberg reports, citing unnamed delegates. A final decision is expected in the coming weeks. Another decision to postpone the 120k bbl / d production increase would mark the fourth time that the group has decided to put off rolling back production caps which first came into effect in 2022, the business news information service said.

Russia denies prospects of another delay: Russia’s Deputy Prime Minister Alexander Novak insisted that Opec+’ plan to restore a total of 2.2 mn bbl / d through monthly increases extending into late 2026 “remains the same,” Bloomberg said.

It’s not just Russia: Three unnamed Opec+ delegates told Reuters that so far there have been no talks on delaying the increase, with one adding that oil markets will be braced to absorb extra supply starting April due to the tightening of sanctions and increasing demand from China. Meanwhile, Morgan Stanley and other analysts expect Opec+ to increase output levels.

REMEMBER- Opec+ began withholding 5.85 mn bbl / d, or 5.7% of global supply, via a series of cuts beginning in 2022 with the aim of supporting markets. The latest extension of output cuts through 1Q 2025 delayed production increases until April. The UAE was also allowed an increase of its production by 300k bbl / d from April 2025 instead of the beginning of the year as previously agreed.

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