Good morning, everyone. The theme du jour is predominantly investments — we have news of the Abu Dhabi Investment Authority raising capital to strengthen its Australian portfolio, VC firm Shorooq Partners raising funds from Qatar Investment Authority and other investors, and private equity firm BlueFive Capital closing a USD multi-bn fund. Plus: Private credit firm Ruya Partners plans to launch a USD 400 mn private credit fund to target GCC middle-market lending.

We’re also seeing the first signs of a potential IPO in 2026, with Emirates Global Aluminium tapping investors for a listing that could come this year. And on the energy front, Adnoc is taking a stake in Azerbaijan’s Southern Gas Corridor — a move that expands its footprint in the Caspian region and boosts its LNG portfolio.

Plus: More banks have come out with their 2025 earnings. This time it’s our friends at Mashreq and Sharjah Islamic Bank.

BUT FIRST— Looking back at January: Dubai’s DFM General Index posted a 6.4% gain in the first month of the year, ranking third across GCC markets after Saudi Arabia (up 8.5%) and Oman (up 7.9%), according to Kamco Invest’s latest GCC Monthly Markets Report (pdf).

The rally came as GCC equities logged their strongest monthly gain in nearly six years, with the MSCI GCC index rising 7.8% over the month. Abu Dhabi’s FTSE ADX Index also posted gains, up 2.9%, but lagging behind regional leaders.

UAE gains were driven by the usual economic linchpins. In Dubai, real estate rose 8.6%, financials climbed 5.6%, and the volume of traded shares was up 6.9% m-o-m. In Abu Dhabi, real estate advanced 8.8% and telecoms gained 7.1%, while utilities fell 14.8%, weighing on the overall index. Trading activity dipped 19.7% on a monthly basis.

Watch this space

DIPLOMACY — Japan visit on hold: President Mohamed bin Zayed Al Nahyan called off a planned state visit to Japan later this week as regional tensions linked to Iran intensify, Bloomberg reports, citing Japan’s public broadcaster NHK. Abu Dhabi has yet to comment.

IN CONTEXT- The pause comes amid a flurry of diplomacy aimed at averting a wider Iran-US confrontation, following renewed tensions over regional security and military activity linked to Iran. Gulf states are acting as intermediaries as Tehran says multiple channels are active and it hopes talks could yield results “in the coming days,” while Washington is signaling military readiness despite US President Donald Trump’s claim of hopefulness to reach an agreement — keeping markets on edge.

INVESTMENT — BlueFive closes USD multi-bn fund for US, Europe tech plays: BlueFive Capital closed a USD 3 bn technology and growth fund with plans to deploy the capital into US and European companies in AI, biotechnology, and advanced computing, according to a press release (pdf). The Onyx Fund I, registered with ADGM, is backed by sovereign-linked capital from across the GCC, and should start writing checks to US companies in the coming months.

This is the first major play by the Abu Dhabi-based PE firm in the US and Europe. It has so far been focused on expanding its footprint in Asia, with a recent appointment as general partner of an RMB 32 bn (USD 4.6 bn) China-focused fund-of-funds backed by CICC Capital and HBIS Group, following a USD 500 mn China private equity fund launched with CICC Capital. CEO Hazem Ben-Gacem said the firm also plans to raise a USD 1 bn Asia-focused fund, as BlueFive broadens exposure across China and Southeast Asia.

INVESTMENT — Ruya aims to dominate the GCC’s middle-market lending vacuum: Mubadala-backed private fund manager Ruya Partners plans to launch a USD 400 mn private credit fund focusing on middle-market lending in the GCC, Bloomberg quotes the firm’s partner Omar AlYawer as saying. The new vehicle will focus its operations on Saudi Arabia, as well as the UAE, with family offices, pension funds, and endowments expected to take part in the raise.

Why it matters: While the UAE and Saudi Arabia are emerging as hubs for private credit, the regional mid-market is facing a financing gap. Although mega projects and sovereign-backed firms can easily access bank loans, mid-sized companies often find traditional lending too slow or inflexible to support scaling, and it looks as if Ruya is looking to plug that gap.

What’s next? The fund’s first close is set to take place in the coming months, AlYawer said. Meanwhile, Ruya plans to widen the fund’s scope to include real estate and infrastructure credit within the next three years.

REMEMBER– Ruya capitalized on several regional prospects in the past months, including a USD 55 mn fund to finance a fiber production plant in Saudi, a USD 15 mn private credit investment in TruKKer, and USD 15.5 mn in UAE-based Epik Foods to back its Saudi expansion.

MACRO — The UAE could see the steepest slowdown in non-hydrocarbon growth across the GCC if US-Iran tensions continue, according to a BMI research article, which suggests that even a “status quo” scenario of heightened US-Iran tensions in 2026 could shave 0.3 percentage points off the UAE’s non-hydrocarbon growth. If tensions escalate into a short but intense military campaign without the closure of the Strait of Hormuz, the impact could deepen to a 0.4 percentage-point deviation, due to the UAE’s proximity to Iran and its heavy reliance on tourism and transport.

A prolonged conflict would have a more severe effect, cutting non-hydrocarbon growth by up to 0.7 percentage points — one of the largest declines in the GCC — as frequent airspace closures and flight suspensions would paralyze the aviation and tourism sectors. In a worst-case scenario where tensions persist beyond these stages, the deviation could reach 1.3 percentage points, the highest among Gulf economies.

The UAE’s “operator-first” economic model is uniquely sensitive to security risks. The UAE and Qatar are the most exposed to “tourism aversion” and “intermittent airline suspensions.” Even if oil continues to flow via the Habshan-Fujairah pipeline — bypassing the Strait of Hormuz — the “halo effect” of the UAE as a safe-haven logistics hub would be under immediate threat.

UPDATE — Trump denies links to UAE-US crypto agreement: US President Donald Trump has denied knowledge of his family’s negotiations with entities backed by UAE National Security Advisor Tahnoon bin Zayed Al Nahyan over the sale of a 49% stake in crypto company World Liberty Financial. Neither Trump nor US envoy Steve Witkoff had any knowledge of the sale, World Liberty Financial spokesman David Wachsman told Bloomberg.

ICYMI: It came to light earlier this week that Aryam Investment 1 — a Tahnoon-backed vehicle — quietly purchased a USD 500 mn stake in World Liberty Financial, a US-based crypto company linked to Trump, last year.

Data point

Dubai’s economy grew 4.7% in the first 9M of 2025, reaching AED 355 bn as the emirate’s post-pandemic momentum transitioned into a sustained, broad-based expansion, according to Dubai Media Office. On a quarterly basis, the emirate saw a 5.3% y-o-y acceleration during 3Q.

Healthcare and social work activities were the fastest-growing segment, surging 15.4%, while the heavy-hitting financial and ins. activities and construction sectors both expanded 8.5%. Real estate (6.7%) and information and communication (4.8%) sectors followed, while accommodation and food services grew 4.7%, buoyed by a 5% y-o-y increase in international visitors. Wholesale and retail trade picked up by 4.6%.

Quarterly growth drivers: Dubai’s quarterly expansion in 3Q 2025 was propelled by a significant surge in the financial and ins. sector, which outpaced the broader economy with 12.9% growth. This momentum was mirrored by the construction and health and social work sectors, as well as in the real estate sector.

PSAs

AE Coin goes federal: The UAE federal government has approved AE Coin — the UAE’s first CBUAE-licensed stablecoin — as a payment method across federal entities, making it the first AED-backed, regulated stablecoin authorized for government payments nationwide, according to a press release.

REMEMBER- AE Coin was already edging toward real-world use, with early adoption by Network International, 7X, Air Arabia, the Abu Dhabi Judicial Department, and Tawasul Taxis, as we’ve reported. Integration with USDU — the USD-denominated stablecoin launched by Abu Dhabi-based Universal Digital Intl, the UAE’s first licensed foreign payment token issuer, last week — is also in the cards, which would allow users to convert between the two.

Why this matters: Federal approval moves AE Coin from selective use cases into state-level payment rails, opening the door to its use in government fees, services, and settlements — and signaling a regulatory greenlight for stablecoin use inside the public sector.

ZOOM OUT- The stablecoin push is accelerating elsewhere too. IHC, ADQ, and First Abu Dhabi Bank are developing a regulated AED token, while Rakbank is building an AED-backed stablecoin — setting up a crowded next phase for tokenized money in the UAE.

Etihad Rail’s first passenger routes are out: Etihad Rail’s first passenger train routes will link Abu Dhabi’s Mohammed bin Zayed City with Dubai’s Jumeirah Golf Estates station and extend east to Fujairah’s Al Hilal City, with services to launch later this year, according to a post on X.

Journey times: Travel time between Abu Dhabi and Dubai will take around an hour, and about 90 minutes to Fujairah. Additional routes are expected to launch soon, connecting 11 cities across the Emirates.

Happening today

Our fellow photo nerds in the UAE have been looking forward to this year’s Xposure, on until tomorrow in Sharjah. This year’s global celebration of visual storytelling features a who’s who of talented photographers — including our friend Romany Hafez, whose haunting analog work explores memory, presence, and sacred spaces.

The UAE-Kuwait Economic Forum kicked off yesterday and will run until Wednesday in Dubai, Sky News Arabia reports. The three-day event convenes policymakers and business executives to deepen bilateral economic, trade, and investment ties. The forum should also connect investors and business leaders for partnerships across key sectors including trade, industry, renewable energy, and logistics.

WEATHER- More of the same: Sunny, breezy weather continues to be on the menu on this fine Tuesday morning, with Dubai seeing a high of 26°C and Abu Dhabi seeing a high of 27°C. The former will see an overnight low of 16°C, while the capital will see a low of 14°C.

Happening this week

Trilateral Ukraine, Russia, US talks in Abu Dhabi: The next round of trilateral negotiations between Ukraine, Russia, and the US will be held tomorrow and after in Abu Dhabi, Ukrainian President Volodymyr Zelenskyy said in a post on X. He added that Ukraine is seeking “a real and dignified end to the war.”

ICYMI- The talks would follow the first round of meetings held in the UAE capital at the end of January. The ceasefire negotiations came amid ongoing fighting, and security assurances and territorial disputes remained sticking points. However, in recent days both countries have scaled back their attacks following a temporary truce to protect energy infrastructure, which expired yesterday, ABC News reports.

The World Governments Summit runs from today to Thursday, 5 February in Dubai under the theme Shaping Future Governments. Government leaders, international organizations, and private-sector executives will focus on governance reform, technology, and global policy challenges.

MENA’s MEVCA Investors Summit takes place tomorrow in Abu Dhabi, gathering the venture capital community as capital allocators and fund managers assess fundraising conditions, LP sentiment, and sector priorities shaping the region’s VC pipeline.

PropTech Connect Middle East is happening tomorrow and Thursday, 5 February in Dubai, bringing investors, developers, and property-tech firms together to discuss AI, data, blockchain, and digital tools reshaping real estate markets across the region.

The International Arab Actuarial Conference runs from tomorrow until Friday, 6 February in Dubai, bringing together actuaries, insurers, regulators, and banks from across MENA. Sessions will focus on AI, health ins., cyber risk, catastrophe modeling, and pension sustainability.

The big story abroad

Elon Musk is merging SpaceX with xAI, creating a USD 1.25 tn venture, people in the know told Bloomberg. The move sets the stage for Musk to carry out his plan of setting up data centers in the planet’s orbit — he claims that that space will be the cheapest place for AI computing in two to three years. Properties formerly owned by xAI — Grok chatbot and X.com — now fall under SpaceX’s umbrella.

The world’s richest man still intends to take SpaceX public this year, in an IPO that could see the company raise as much as USD 50 bn, a source told Bloomberg.

AND- Our usual dose of global trade updates: US President Donald Trump has agreed to trim punitive tariffs on India on the condition that New Delhi stops buying Russian oil, reducing the levies from 25% to 18%. India will slash its levies on Washington down to zero. After a phone call with Indian Prime Minister Narendra Modi, Trump said New Delhi has agreed to buy more oil from Venezuela as well as upwards of USD 500 bn in US energy and other products.

Software giant Oracle has raised USD 25 bn in a blockbuster bond offering, attracting an orderbook of USD 127 bn at its peak, the Financial Times reports, citing people it says are familiar with the transaction. The funding came through amid concerns that Oracle was striking up an unsustainable level of debt to back its AI spending.

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