THIS MORNING: Another rating affirmation + Al Taweelah back at 50% capacity within days

Good morning, friends, and happy Monday. We hope you had a good weekend — despite the scare yesterday morning. We know some of you got the dreaded phone alerts that defense systems were intercepting threats over Abu Dhabi and Dubai early in the morning — though not all of us did — before NCEMA confirmed the missiles never actually crossed into UAE territory and the situation was stable.

It was an unfortunate weekend for other countries in the region: The UAE condemned attacks on neighboring countries, including Oman — where a ship was hit off of its coast — Bahrain, Qatar, and Jordan.

This morning’s Big Story is good news (both for the UAE’s AI ambitions and for its defense prospects): Washington handed the UAE one of the biggest trust upgrades in the relationship’s history — a Country Group A:5 slot that eases no-license access to advanced chips, satellites, and defense kits.

We also have big M&A news for you this morning, as e& calls it quits on Vodafone — four years, three stake bumps, one boardroom seat, and now a clean exit to a French telecoms b’naires family vehicle.

Also on our radar: Abu Dhabi's hedge-fund shopping spree isn’t slowing down (ADIC’s latest cheque is a cool USD 1 bn), and Burjeel’s betting its Saudi expansion on scalpels, not square footage.

Capital Intelligence affirms UAE’s AA- sovereign rating

The UAE’s financial buffers have earned another vote of confidence, this time from Capital Intelligence (CI), which affirmed the country’s long-term sovereign credit rating at AA- with a stable outlook. The ratings agency pointed to strong public finances, ample external liquidity, and an economy that has remained resilient despite regional geopolitical tensions, CI said in an update.

Looking ahead: CI expects that resilience to keep compounding. It expects the UAE’s maritime trade to recover gradually in the second half of 2026, Al Khaleej cites the full report as saying. It also sees the government’s budget surplus growing to 4.4% of GDP in 2027 and 2028, while the government debt is expected to decline from 34.3% of GDP in 2025 to around 30.5% by 2028. Meanwhile, current account surplus is likely to average 11.2% of GDP over the same period as trade, tourism and oil exports recover.

BACKGROUND: This follows a string of rating affirmations for the UAE despite heightened regional tensions. Moody’s reaffirmed the country’s Aa2 sovereign rating with a stable outlook in June, while Fitch affirmed Abu Dhabi’s AA rating with a stable outlook in May, both citing the UAE’s strong fiscal and external buffers even as growth forecasts softened and government spending was expected to rise.

Al Taweelah stirs up again

More progress at Al Taweelah: Emirates Global Aluminium (EGA) has restarted alumina production at its Al Taweelah refinery after output was suspended on 28 March in the wake of Iranian attacks on Kezad, according to a statement. Production is expected to ramp up to 50% of plant capacity within days, with EGA expecting technical capability to return to full alumina production by year-end.

Market reax: The restart nudged benchmark aluminium prices lower on the London Metal Exchange, sending benchmark three-month aluminium down 1.8% to USD 3.14k a ton as traders priced in a faster-than-expected return of Gulf supply. The refinery had already resumed producing hydrate — alumina’s precursor — on 24 June, before this latest production ramp-up.

ICYMI- EGA restarted 89 of Al Taweelah’s c.1.3k reduction cells in late May, while the casthouse and recycled-metal production had resumed earlier in the same month. The faster-than-expected restart has not changed the full recovery timeline, with hot-metal output still expected to take up to a year to fully recover. The refinery matters because it produced 2.4 mn tons of alumina in 2025, covering 46% of EGA’s alumina needs — though EGA says the smelter restart does not depend on the refinery returning to full output.

Dubai awards AED 2 bn road project to ease congestion

Dubai is putting another AED 2 bn into its road network: Dubai’s Roads and Transport Authority awarded a AED 2 bn contract to build the Latifa Bint Hamdan Corridor, according to a statement. The new 12km link runs from Sheikh Zayed Road through Al Khail Road, Al Meydan Street, and Sheikh Mohammed Bin Zayed Road to Emirates Road.

Once finished by the end of 2028, it’ll cut travel time between Umm Al Sheif Street and Emirates Road by 54% from 33 minutes to 15 and give Dubai’s east-west corridors breathing room as the population they serve keeps growing.

Data point

38.2k — that’s how many business licenses Sharjah issued and renewed in 1H 2026, up just 2% y-o-y, according to Sharjah Economic Development Department data carried by state news agency Wam. That’s the softest first-half growth in recent years: licensing activity rose 8% in 1H 2025, and new-license growth alone hit 34% for the full year. The declaration lands in the same half that regional conflict disrupted Gulf trade and industry.

New licenses still outpaced the headline, rising 5% to 4.6k (against 16% growth in 1H 2025), while renewals climbed just 2% to 33.6k (against 7%).

Where the growth is: Commercial activity still dominates, with 2.5k new commercial licenses and 21.6k renewals in 1H. The standout was e-commerce renewals, which rose 52% y-o-y to 207 — still small in absolute terms, but the fastest-growing pocket in the data.

PSAs

Flydubai is flying back into Aleppo after a 14-year gap. The carrier will launch daily nonstop flights between Dubai and Aleppo International Airport on 20 July, making the city its second Syrian destination after Damascus, state news agency Wam reports.

IN CONTEXT- Flydubai says demand on the Damascus route, which resumed in June 2025, has already grown enough that it’s now running three flights a day, and Aleppo is the next wager on that same demand curve. The launch also sits inside a broader network push: flydubai has recently added Benghazi and Bangkok, and is set to start Pokhara in September.

WEATHER- The mercury rises to 41°C in Abu Dhabi and 39° in Dubai, before cooling to 31° in the former and 32°C in the latter, according to our favorite weather app.

The big story abroad

It’s a quiet Monday morning on the global front pages save for the latest escalations in the regional war.

The US military launched fresh strikes on Iran to keep the Strait of Hormuz open. Rejecting Tehran’s claims that it has closed the waterway, the US Central Command announced new strikes designed to weaken Iran’s ability to target commercial vessels. Meanwhile, Iranian state media reported explosions in cities along the strait.

Iran launched at least three waves of missiles and drones at Gulf nations, targeting US military bases across Jordan, Qatar, Kuwait, Bahrain, and Oman. The strikes were in retaliation for bombings in southern Iran, state-affiliated Tasnim News Agency reported.

Oil markets jolted: The escalations sent Brent crude prices up 3% to USD 78 a barrel at the open of Asian trading, while West Texas Intermediate surged 4% to USD 79 a barrel. Oil prices have been steadily falling, inching towards their pre-war level of USD 72.5, since the US and Iran announced their framework agreement — prices hit a war peak of USD 126 a barrel in April.

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