XRG goes south + yet another debt issuance

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WHAT WE’RE TRACKING TODAY

THIS MORNING: DAE eyes up to USD 3 bn in acquisitions this year + Modon is ramping up development at Ras El Hekma

Good morning, friends. We have a busy issue for you today — Adnoc is going deep into Patagonia, the aviation leasing business is having a moment, and the skies over the Gulf are getting a little more familiar.

By that, we mean Iran and the UAE have resumed flights between them as of yesterday, with a FlySepehran flight from Tehran's Imam Khomeini International Airport touching down at Dubai International early yesterday — the first arrival from the Iranian capital since the war began. The resumption comes as signs that the UAE and Iran are looking to get relations back on track, and as ceasefire talks between the US and Iran continue.

The XRG move is the headline. Adnoc's international investment arm and Eni have each agreed to take a 32% stake in three of YPF's Vaca Muerta gas blocks in Argentina — the upstream backbone of what's shaping up to be a USD 12.5 bn integrated LNG project. We've been tracking this since November: non-binding agreement to JDA to, now, actual equity.

Also on our radar: DAE is on a buying spree, with CEO Firoz Tarapore saying the company is targeting up to USD 3 bn in aircraft acquisitions this year, on top of 30+ new deliveries from its Boeing, Airbus, and ATR orderbook. And Mashreq is back in the debt markets with an AT1 — its first public issuance since the onset of the conflict. Investor calls are underway — watch this space to see how pricing and demand look, as appetite grows and spreads return to pre-war levels.

Nuclear plans reboot

The UAE’s small modular reactor push is back on track after the Iran war delayed site selection and feasibility studies. US startup Nano Nuclear now hopes to send a team to the Emirates later this year under its February agreement with EHC Investment — controlled by IHC — to explore deploying SMRs for data centers and remote oil and gas sites, CEO James Walker told Semafor.

IN CONTEXT- Deploying smaller reactors at edge locations was flagged by experts to us as a way to keep data centers running through outages of the kind we saw at the start of the regional conflict — which makes the timing of this revival pointed.

“The UAE wants to push this forward very fast,” Walker said. Nano Nuclear’s first reactor is not expected to begin producing power until 2030, underscoring how early-stage the technology remains.

Watch this space: Nano Nuclear is also in preliminary talks over an investment from an Abu Dhabi firm linked to National Security Adviser Tahnoon bin Zayed. Discussions have included funding its expansion, commissioning a UAE plant, and a possible Abu Dhabi dual listing.

IN CONTEXT- The UAE’s SMR push is widening: China’s Jereh Group is planning a local platform pairing modular reactors with battery-materials production, while Sharjah-based CE-Ventures last year backed US startup Aalo Atomics, which is testing reactors designed to power data centers.

Modon awards Ras El Hekma contract

Modon Holding is ramping up development at Egypt’s USD 35 bn Ras El Hekma megaproject, awarding infrastructure works for the first district of the project to a consortium comprising Rowad Modern Engineering and Consolidated Contractors Company (CCC) in a EGP 10 bn (c. USD 203 mn) contract, the Arabic press reports, citing people familiar with the matter.

BACKGROUND- Modon was tapped as master developer for the coastal city shortly after Egypt and the UAE inked the historic investment agreement in 2024. Other local, regional, and international partners will work on the development alongside the Abu Dhabi-based developer, under the oversight of ADQ’s subsidiary Ras El Hekma Urban Development Project Company.

IN CONTEXT- The award marks the second major construction package handed out at Ras El Hekma. (Earlier this year}, Modon signed up Orascom Construction for residential, hospitality, and infrastructure works valued at EGP 15 bn. Wider construction work is already underway, with Emirati real estate developer Sky Abu Dhabi breaking ground on the project last year.

The details: The Wadi Yom district will include residential units, hotels, and leisure facilities, including two golf courses and an open-air amphitheater with capacity for 10k people.

DAE goes shopping

Dubai Aerospace Enterprise (DAE) is targeting up to USD 3 bn (AED 11 bn) in aircraft acquisitions this year as it looks to expand its global leasing portfolio, doubling down on continued strong demand for commercial aircraft and sustained growth in international air travel, CEO Firoz Tarapore told Al Bayan. The company is expecting to take delivery of more than 30 new aircraft in 2026 from its orderbook with Boeing, Airbus, and ATR.

A diversified growth strategy: DAE acquired more than 300 aircraft over the past three years through M&A alongside direct purchases from manufacturers, Tarapore said, as airlines’ appetite for newer, more fuel-efficient aircraft continues to underpin demand for lessors, he added.

Why it matters: The expansion comes as aircraft lessors continue to benefit from a prolonged supply shortage caused by production constraints at Boeing and Airbus, which has kept lease rates elevated and extended the economic life of existing fleets.

Data point

57.5% — that’s the UAE’s e-invoicing readiness score as voluntary adoption begins, according to a ClearTax survey of more than 500 senior finance executives. The FTA-approved provider places the market in the “developing” stage ahead of mandatory adoption from January 2027 for businesses with annual revenue above AED 50 mn.

The biggest gaps are operational and technical: Some 73.3% of businesses have yet to formalize post-launch processes, while 70.4% cannot automatically handle tax-authority responses. Technical infrastructure scored lowest at 54.3% — 60.5% have not run an ERP gap analysis, 38% cannot generate compliant invoices, and just 14.1% say they are fully ready.

Who is lagging? Businesses with AED 200 mn-1 bn in revenue recorded the lowest readiness, while retail, hospitality, and manufacturing trailed technology, professional services, and logistics.

REFRESHER- The UAE’s e-invoicing pilot is now underway, with businesses above AED 50 mn required to select an accredited provider through EmaraTax by 30 October ahead of the January 2027 mandate. The system will cover all B2B and B2G invoices and report transactions to the FTA in near real time, reshaping everything from compliance to due diligence and M&A.

PSA

Today is the deadline for private-sector companies to meet their 1H 2026 Emiratization targets. Companies with 50 or more employees must have Emiratis filling 7% of skilled roles before tomorrow — part of the national mandate to reach 10% by year-end.

The Human Resources and Emiratization Ministry will begin compliance checks tomorrow using a digital inspection system that flags fake Emiratization practices. Inspectors will also verify that Emirati staff are registered with the social security fund and that contributions are being paid. Miss the target, and you’re looking at monthly fines per unfilled role. Beat it, and you could see up to 80% off MoHRE service fees and priority access to government procurement.

PLUS- After a travel ban that lasted weeks, Emirati nationals are now permitted to travel to Lebanon, the Foreign Ministry said in a statement yesterday. The ministry stressed that travellers must complete registration via the Twajudi service prior to travelling.

WEATHER- Yet another hot day, as expected: Dubai will hit 40°C by afternoon, with a low of 31°C tonight. Abu Dhabi is marginally worse at 41°C and a low of 32°.

The big story abroad

With no fresh update on the US-Iran talks, no single story is dominating the front pages this morning.

Cook stays: The US Supreme Court ruled to block President Donald Trump’s attempted sacking of Federal Reserve governor Lisa Cook. While the 5-4 decision is being billed as a victory for Fed independence, the court ruled in a separate decision that Trump may axe members of independent federal agencies.

Another high-profile shakeup in the media world: Mass media giant Comcast has plans to spin off its media and entertainment arm NBCUniversal and its European media business arm Sky. The split reportedly aims to increase investor appeal by letting shareholders choose between Comcast’s steady broadband business and the new media group.

Meanwhile, in the AI world: The rush to fund energy infrastructure for data centers has triggered a massive surge in US power and utility dealmaking. Data center growth is driving “a seemingly unstoppable trend line” in power demand. So far in 2026, data center investment skyrocketed to USD 151.5 bn, more than doubling y-o-y.

And, in a first, the Dow Jones Industrial Average surpassed the 52k mark yesterday, as tech companies start off the week strong. This coincided with Google-owner Alphabet’s debut on the index — its shares jumped 4.8% to lead gains.

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XRG backs Argentina LNG project with upstream snatch

XRG snatches a stake in Argentina’s upstream: Adnoc’s international investment arm XRG and Italy’s Eni have each agreed to acquire a 32% stake in three upstream gas blocks in Argentina’s Vaca Muerta shale basin from state-owned YPF, which will retain the remaining 36% interest, according to a press release (pdf).

IN CONTEXT- We reported in November 2025 that XRG, YPF, and Eni signed a non-binding agreement to explore joining an Argentina LNG venture, then in February that the three had moved to a front-end engineering design agreement for the same project. Reuters previously pegged total project financing at USD 12.5 bn.

What we know: The three YPF-operated blocks are expected to form the upstream backbone of an integrated LNG project, with gas piped from the assets to supply two planned floating LNG units. The initial phase targets 12 mtpa of production capacity — 6 mtpa per vessel.

Where this fits in XRG’s global gas push: Vaca Muerta adds to a portfolio that already spans NextDecade’s Rio Grande LNG in the US, Azerbaijan’s Absheron gas field, Turkmenistan’s Offshore Block 1, and Mozambique’s Area 4 concession. The company is also eyeing potential investments in Canada and Australia, while also doubling down heavily on US gas.

Could we see another Latin American move? Bloomberg previously reported that Adnoc is weighing a potential XRG entry into Venezuela’s oil market through a partnership with another international energy firm — though any move would depend on clear regulatory and financial structures for investments in the country and coordination with the US.

Mashreq taps debt markets with benchmark AT1 offering

Our friends at Mashreq are heading back to the debt markets, launching a benchmark-sized USD-denominated additional tier-one (AT1) issuance, Zawya reports. The Dubai-based lender is marketing a perpetual non-call 5.5-year AT1 note, with investor calls beginning yesterday. The Regulation S issuance will be listed on the Global Exchange Market of Euronext Dublin.

The transaction marks Mashreq’s first public debt issuance since the onset of the US-Iran conflict. The bank last tapped markets in February, raising USD 500 mn through a perpetual non-call 5.5-year AT1 that was priced at 6.25% after being 4.2x oversubscribed.

Step back: AT1 activity has been picking up recently after a quieter period for debt markets during the war. Dubai Islamic Bank recently saw orders of over USD 2.3 bn for its USD 1 bn AT1 sukuk, while Emirates NBD reopened the regional AT1 market at the end of April with a USD 750 mn issuance. Subsequent issuances from other regional lenders are set to follow, signalling there’s still appetite for GCC paper despite geopolitical uncertainty.

ADVISORS- Abu Dhabi Commercial Bank, BBVA, Barclays, Bank of America, Crédit Agricole, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq, and Standard Chartered are joint lead managers for the issuance.

More cargo for EGA via Khalifa Ports, Abu Dhabi teams up with Eli Lilly, another British school is coming to the UAE, Vara gives the greenlight to Tribe Tokenization

AD Ports and Emirates Global Aluminium will invest AED 84 mn to expand EGA’s dedicated berth at Khalifa Port. The investment will increase capacity at the berth, allowing it to handle larger Newcastlemax vessels, which can transport 15-20% more cargo than the Capesize vessels currently calling at EGA’s berth, according to a press release (pdf). The berth should be able to process up to 8 mtpa of bulk cargo by the time the project is completed in August 2028.

Were GLP-1 pills just the beginning?

More collaboration with obesity treatment players is in the cards after Abu Dhabi’s Health Department partnered with US-based pharma firm Eli Lilly to look into treatments for obesity and Alzheimer’s disease, according to Wam. No details about rollout timelines or funding were disclosed, but plans include building an Alzheimer’s Disease Center of Excellence.

IN CONTEXT- Eli Lilly is the company behind GLP-1 drugs like Mounjaro and Zepbound, and its partnership with the UAE comes after Emirates partnered with Danish drugmaker Novo Nordisk to see the first international rollout of a GLP-1 pill.

Another int’l school comes to the Emirates

British independent school Epsom College will open campuses in Abu Dhabi and Dubai, becoming the latest premium UK school to enter the UAE. This expansion was made under a partnership with UAE-based Nema Education, according to a press release.

The details: The Abu Dhabi campus will open in September 2028, while Epsom College Dubai is opening at the start of the academic year in 2030. Each school is expected to accommodate between 2k to 2.5k students and will offer education from kindergarten to 12th grade. Fees and tuition have not yet been disclosed for either school.

The expansion comes amid a growing pipeline of British schools venturing into the UAE, including Harrow School and Rugby School, driven by a strong local demand for premium UK curriculum education in the UAE.

Vara approves another tokenization player

Another green light from Vara: Dubai-based tokenized assets platform Tribe Tokenization secured approval from the emirate’s Virtual Assets Regulatory Authority (Vara) for a virtual asset service provider license, according to Binance.

More on Tribe: Tribe is one of the players tapping into the tokenization trend in the UAE, pitching a way in for retail investors looking to access Dubai’s property market through ownership options starting from AED 2k. It had already secured in-principle approval from the regulator.

Breaking ground

Emirati renewables giant Masdar broke ground on its USD 1.4 bn, 1 GW wind farm in Kazakhstan, the company said in a press release. The project is Masdar’s first in the Central Asian country and one of the region's largest integrated wind and battery storage projects, the company said. It is set to power some 880k homes in southern Kazakhstan and eliminate 2.5 mn tons of annual carbon emissions — higher than what was previously reported.

REMEMBER- Masdar signed the joint development agreement for the project in December 2023, before inking an agreement with Kazakhstan's government to develop the project in late 2024. The project will be jointly developed with Alpha Dhabi subsidiary W Solar, Kazakhstani renewables firm Qazaq Green Power, and the Kazakhstan Investment Development Fund. The facility is set to feature a 600 MWh battery energy storage system.

There’s more: Masdar signed a roadmap agreement with the country’s Artificial Intelligence and Digital Development Ministry to establish Kazakhstan’s first round-the-clock clean energy project. Its first phase will provide up to 200 MW of power for data centres and AI infrastructure.

Momentum ushers US player into local game scene

Local entertainment group Momentum has established a JV with US-based global digital sports platform Fanatics, according to a press release. The partnership combines Momentum’s regional expertise and existing UAE gaming licenses — covering lottery, iGaming, and sportsbooks — with Fanatics’ tech and product scale. The General Commercial Gaming Regulatory Authority approved the change in control of Momentum’s existing licensed entities, paving the way for the US platform to expand locally.

Mubadala, Adia, and the world’s biggest sovereign funds have a new playbook: fewer stocks, more data centers

The world’s biggest sovereign wealth funds are pulling money out of listed equities and rotating hard into private markets — and Gulf names are leading the charge. Abu Dhabi’s Mubadala already has 59% of its assets in private equity, infrastructure and real estate, while Singapore’s Temasek holds 49% of its portfolio in unlisted assets.

This trend is only going to accelerate, according to Invesco’s annual sovereign wealth study (pdf), which covered 90 funds with combined AUM of USD 17.2 tn. The study showed a net 17% of SWFs plan to cut listed equity exposure this year — a sharp reversal from recent years — and some 28-35% plan to add to private equity, private credit, and infrastructure.

The culprit is a toxic backdrop of inflation, geopolitical tensions, and equity market concentration. The top 10 stocks in the S&P 500 now represent 38% of the index — double their weight a decade ago — and large passive allocations have quietly become leveraged wagers on a handful of US megacap tech names. Several funds told Invesco they had started asking whether the diversification they assumed from broad-market exposure was actually present. The bond-equity relationship that traditionally cushioned public market drawdowns has also broken down since the 2021-2022 inflation shock, removing the other leg of the classic resilient portfolio.

AI is both the problem and the catalyst. The same theme driving index concentration is generating the private market dealflow. The capital requirements for the AI build-out — from data centers to energy systems — are vast and sitting mostly outside listed markets. One Middle Eastern fund told Invesco the AI wave is currently best captured in private credit and infrastructure. The average infrastructure allocation across the SWF sample has nearly doubled to 9% since 2022. Gulf funds, with their scale and governance flexibility, are better placed than most to keep rotating.

Case in point: Abu Dhabi Investment Authority (Adia) recently backed Rajasthan-based precision equipment manufacturer KRN Heat Exchanger’s qualified institutional placement, a firm positioned to benefit from rising demand for cooling equipment linked to data centers, manufacturing expansion, and climate-control infrastructure. In addition, the Abu Dhabi sovereign wealth fund previously invested USD 500 mn in AlphaGen, a US power infrastructure portfolio of over 11 GW specifically structured to support data centers. It also acquired a stake in data center developers Landmark Dividend and Vantage Data Centers. Meanwhile, Mubadala backed Yondr, and Saudi Arabia’s Public Investment Fund launched Humain build across the AI value chain.

MARKETS THIS MORNING-

Asian equities are looking at moderate gains in early trading this morning, echoing gains felt across Wall Street a day earlier in a tech-fueled rally. Japan’s Nikkei is up 0.5%, putting it on track for its best quarter ever — “as institutional investors are ‌expected ⁠to adjust their portfolios ahead of the end of the quarter today, volatile price movements are possible,” Sony Financial Group analysts said in a note.

ADX	9,839	-0.4% (YTD: -1.5%)
DFM	5,993	-0.4% (YTD: -0.9%)
Nasdaq Dubai UAE20	4,726	-0.6% (YTD: -3.3%)
USD : AED CBUAE	Buy 3.67	Sell 3.67
EIBOR	3.6% o/n	4.2% 1 yr
TASI	10,792	-1.1% (YTD: +2.9%)
EGX30	49,826	-1.0% (YTD: +19.1%)
S&P 500	7,440	+1.2% (YTD: +8.7%)
FTSE 100	10,484	-0.2% (YTD: +5.6%)
Euro Stoxx 50	6,232	+0.2% (YTD: +7.5%)
Brent crude	USD 73.15	+1.6%
Natural gas (Nymex)	USD 3.18	-0.2%
Gold	USD 4,030	-0.2%
BTC	USD 60,441	+2.3% (YTD: -31.0%)
Chimera JP Morgan UAE Bond UCITS ETF	AED 3.74	0.0% (YTD: -0.2%)
S&P MENA Bond & Sukuk	152.60	0.0% (YTD: +0.5%)
VIX (Volatility Index)	17.65	-4.1% (YTD: +18.1%)

THE CLOSING BELL-

The DFM fell 0.4% yesterday on turnover of AED 412 mn. The index is down 0.9% YTD.

In the green: Commercial Bank of Dubai (+4.4%), Al Firdous Holdings (+4.2%), and Islamic Arab Ins. Company (+1.9%).

In the red: Agility The Public Warehousing Company (-4.9%), Etihad Energy Holding (-4.7%), and National International Holding Company (-4.2%).

Over on the ADX, the index fell 0.4% on turnover of AED 850.7 mn. Meanwhile, Nasdaq Dubai was up 0.2%.

CALENDAR

JUNE

30 June (Tuesday): The deadline to meet 1H 2026 Emiratization targets for private-sector companies in the UAE with 50 or more employees.

JULY

28-29 July (Tuesday-Wednesday): Federal Open Market Committee (FOMC) meeting.

SEPTEMBER

1-3 September (Tuesday-Thursday: Middle East Energy, Dubai World Trade Center, Dubai.

7-9 September (Monday-Wednesday): AIM Congress, Dubai World Trade Center.

7-9 September (Monday-Wednesday): International Property Show, Dubai World Trade Center, Dubai.

12-13 September (Saturday-Sunday): Emirates International Congress on AI & Visionary Leadership in Transforming Healthcare, Adnec Center Abu Dhabi.

14-17 September (Monday-Thursday): Arabian Travel Market, Dubai World Trade Center, Dubai.

15-16 September (Tuesday-Wednesday): Federal Open Market Committee (FOMC) meeting.

29-30 September (Tuesday-Wednesday): AFCM Annual Conference, Abu Dhabi.

OCTOBER

4-10 October (Sunday-Saturday): World Space Week, Abu Dhabi.

5-7 October (Monday-Wednesday): AI Everything Global, Adnec Center, Abu Dhabi.

12-14 October (Monday-Wednesday: Airport Show, Dubai World Trade Center, Dubai.

20-22 October (Tuesday-Thursday): Future Health Summit, Adnec Center Abu Dhabi.

27-28 October (Tuesday-Wednesday): Arab Competition Forum, Dubai.

27-28 October (Tuesday-Wednesday): Federal Open Market Committee (FOMC) meeting.

30 October (Friday): Large businesses achieving annual revenues equal to or above AED 50 mn must appoint an accredited service provider for e-invoicing implementation.

Signposted to happen sometime in October 2026:

Abu Dhabi Space Week, Abu Dhabi.

NOVEMBER

2-6 November (Monday-Friday): Dubai Future Finance Week, Dubai.

4 November (Wednesday): Digital Transformation Summit, Sofitel, Abu Dhabi.

9-10 November (Monday-Tuesday): Annual government meetings, Abu Dhabi.

9-12 November (Monday-Thursday): EMEA Council on Hotel, Restaurant and Institutional Education Conference, Dubai College of Tourism, Dubai.

10-12 November (Tuesday-Thursday): Dubai International Electric Vehicle Exhibition & Conference, Dubai World Trade Center.

16-18 November (Monday-Wednesday): World Police Summit, Dubai World Trade Center, Dubai.

DECEMBER

2-4 December (Wednesday-Friday): UN Water Conference, UAE.

4-6 December (Friday-Sunday): Formula 1 Abu Dhabi Grand Prix, Abu Dhabi.

8-9 December (Tuesday-Wednesday): Capital Market Summit, Madinat Jumeirah, Dubai.

8-9 December (Tuesday-Wednesday): Federal Open Market Committee (FOMC) meeting.

8-10 December (Tuesday-Thursday): Abu Dhabi Water & Power Week, Adnec Center, Abu Dhabi.

Signposted to happen sometime in 2027:

1 January: Deadline for large businesses to implement e-invoicing;
1Q 2027: Completion of the first phase of Hassyan seawater desalination project;
1-3 February (Monday-Wednesday): World Governments Summit;
31 March: Small businesses with annual revenues of less than AED 50 mn are obliged to contract with an accredited service provider for e-invoicing implementation;
31 March: Government entities are required to appoint an accredited service provider for e-invoicing implementation;
21-22 April (Wednesday-Thursday): Token2049, Dubai;
1 July: Deadline for small businesses to implement e-invoicing;
1 October: Deadline for governments to implement e-invoicing;
Abu Dhabi’s solar and battery energy facility, combining 5.2 GW of solar capacity and 19 GWh of battery storage, is set for commissioning.

Signposted to happen sometime in 2028:

Artificial Intelligence Summit.

Signposted to happen sometime in 2029:

Sibos 2029 organized by the Society for Worldwide Interbank Financial Telecommunication (SWIFT), Dubai;
Annual Meetings of the World Bank Group and the International Monetary Fund, Abu Dhabi;
The commissioning of the seventh phase of Mohammed bin Rashid Al Maktoum Solar Park.

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