THIS MORNING: Iranian flights suspended + MGX-backed consortium eyes another data center portfolio, Mubadala eyes stake in Italian turbine maker

Good morning, friends, and happy Friday. It’s another morning of Abu Dhabi capital staying busy — mostly abroad.

An MGX-backed consortium is in talks for up to USD 25 bn of data centers across Tokyo, Sydney, and Johor Bahru. Mubadala is closing in on a stake of up to 35% in an Italian turbine maker, and the Abu Dhabi Investment Authority added another Indian stock to its book. And Mair, the Abu Dhabi grocery co-op turned listed company, is buying into a Turkish coffee chain with more than 400 shops.

Separately, the UAE has launched fast-tracked CEPA talks with Argentina, where XRG already holds a slice of the country's LNG push.

Closer to home, checks are harder to come by: Our big story today digs into the growth-stage funding gap after the number of series A rounds halved in 1H 2026. Investors tell us the problem stems from founders struggling to find anyone willing to lead a round, as opposed to just participate, as well as information asymmetry with foreign funds and a more difficult backdrop that has led to longer runways and different asks from investors.

Another Iranian route cut off

The UAE has suspended all flights by Iranian airlines to and from the country until further notice, the General Civil Aviation Authority (GCAA) said in a statement carried by Wam. The suspension took effect today, and the GCAA tied it directly to the US ban on Iranian airlines using airports around the world. The US Treasury’s threat of secondary sanctions on any airport or company servicing Iranian carriers kicked in on Wednesday.

The UAE isn’t alone: As of Wednesday, Oman and Azerbaijan have barred Iranian airlines, Iraq has banned flights to Baghdad, and Georgia has suspended flights to Tbilisi, the Financial Times reports. Mahan Air has also dropped its Istanbul, Ankara, and Muscat routes. Iran’s Civil Aviation Organisation says it is talking to Oman and Iraq about keeping some flights running, including sending Baghdad-bound flights to the pilgrimage city of Najaf instead. Iran’s top security official Mohsen Rezaei has warned that countries shutting out Iranian flights could face reciprocal restrictions.

Why it matters: Flights were one of the last threads left after Abu Dhabi halted all trade, commercial exchange, and financial transactions with Iran in August. The central bank tightened the financial side further on Wednesday, sanctioning Bank Melli’s UAE branches over money laundering and terror financing violations.

Abu Dhabi capital eyes moves abroad

An MGX-backed consortium is closing in on Stack Infrastructure's Asia data centers: The BlackRock and MGX-backed AI Infrastructure Partnership (AIP) and Australia's IFM Investors have entered exclusive talks to buy the Asia Pacific portfolio, which spans sites in Tokyo, Osaka, Sydney, Melbourne, and Johor Bahru, in a transaction that could value it at USD 20-25 bn, Bloomberg reports. That's a haircut of up to a third on the more than USD 30 bn Stack's owner, Blue Owl, was initially seeking. The buyers are aiming to sign soon, though talks could still drag on or fall apart.

Background: MGX, the AI investor set up by Mubadala and G42, is a founding partner in AIP alongside BlackRock's Global Infrastructure Partners and Microsoft. The partnership's first investment, the USD 40 bn buyout of Aligned Data Centers, closed in July, bringing 51 campuses and more than 6.4 GW of capacity (operational and planned), concentrated in the US with a handful of sites in Latin America. This would be the consortium’s first move outside the Americas.

Meanwhile, Mubadala is in talks for a stake of up to 35% in Italy’s Ansaldo Energia: Italian state lender Cassa Depositi e Prestiti (CDP) is looking to sell 15-35% of Genoa-based gas and steam turbine maker Ansaldo Energia to Gulf investors, and talks with Mubadala are furthest along, Reuters reports, citing two sources it says are in the know. The stake would come as part of a broader agreement to expand Ansaldo Energia’s operations in the Gulf. CDP, which owns 99.6% of Ansaldo through CDP Equity, would keep full control.

Ansaldo is no stranger to the UAE: Ansaldo Energia has operated in the UAE for more than three decades, runs a remote monitoring and diagnostics center in Abu Dhabi, and last year was awarded a contract to supply four turbines for the 1 GW Al Dhafra power plant.

ICAEW, Oxford see UAE economy contracting 1.5% this year

The UAE economy is forecast to grow 6.6% in 2027 after shrinking 1.5% this year, according to the Economic Insight: Middle East Q3 2026 report released by ICAEW and Oxford Economics. The report says the UAE is “well placed to provide fiscal support to boost non-oil sectors,” with real estate and tourism lagging the rest of the economy.

Tourism is the weak spot: Tourism makes up around 13% of the UAE’s GDP. Visitor numbers are expected to drop 46.7% this year, before recovering 30% in 2027 and another 59% in 2028. The report doesn’t expect a full return to pre-conflict levels before 2028. It does, however, point to Purchasing Managers’ Index (PMI) data — still above the threshold separating expansion from contraction — as evidence that consumer confidence is doing better than headline growth figures suggest. Even employment has largely held up, with the report noting that “firms have been cautious to ramp up hiring, but anecdotal evidence does not point to a large or persistent exodus of workers or widespread labour shortages.”

BACKGROUND- This is ICAEW’s third straight downgrade to its GCC outlook for this year. It now expects the bloc to contract 6.4% in 2026 before rebounding 5.8% in 2027. The deeper hit follows renewed escalation that damaged Saudi Arabia’s oil export infrastructure, including the East-West pipeline, and pushed Brent above USD 100 a barrel. In March, ICAEW forecast a 0.2% GCC contraction for 2026. By June, it was projecting a 2.4% contraction followed by 8.1% growth in 2027.

The UAE is better off than most, save for Qatar, which is set for 11.5% growth next year after a much weaker 2026. Meanwhile, Saudi Arabia is forecast to return to 4.7% growth in 2027 after contracting 4.6% this year as the oil sector gradually normalizes. The GCC’s hydrocarbon sector is similarly expected to rebound 25.9% in 2027 after a 26.9% contraction this year.

UAE, Argentina launch CEPA talks

Abu Dhabi isn’t waiting on Mercosur to do business with Buenos Aires: The UAE and Argentina launched talks on a bilateral trade and economic partnership agreement — also known as a CEPA — on the sidelines of the UN General Assembly in New York, state news agency Wam reports. Both sides say they want to fast-track the talks. Energy and mining head a long sector list that also takes in AI and data centers, pharma, agribusiness, and real estate.

Why it matters: Argentina is already part of the UAE’s CEPA talks with Mercosur, which began in 2024. After the latest round in November 2025, Al Zeyoudi said the process had “advanced” and said he hoped to wrap it up within weeks. Ten months on, there’s no agreement yet. A separate bilateral track suggests Abu Dhabi wants its Argentine interests moving at its own pace rather than the bloc’s.

Follow the gas: The joint statement singles out the XRG-YPF partnership, part of an Argentina LNG project expected to draw some USD 51 bn in investment. In June, XRG and Eni agreed to take 32% each of three Vaca Muerta blocks that will feed a planned 12 mn tons per annum export project, with YPF keeping 36%.

PSAs

#1- Abu Dhabi gives Tajer licence holders another year to operate without an office: Tajer Abu Dhabi licence holders whose grace period runs out in 2026 will be able to operate without physical premises for another year following a new extension by the Abu Dhabi Department of Economic Development (ADDED), according to the Abu Dhabi Media Office.

New industrial (Rowad) licences also get more room — three years instead of two before construction must start, and four years instead of three for projects under construction to reach production.

Why it matters: Premises are one of the biggest fixed costs of starting up, and pushing that bill back a year helps reduce costs for founders at a time when costs are on the rise since the regional war began. The licence’s momentum is slowing, though. Growth in new Tajer licences fell from 24% in 2025 to 8% in 1H 2026, even as the number of activities it covers has grown from 30 at launch in 2017 to more than 1.2k. ADDED says an earlier waiver of fines for late licence renewals and cancellations has reached roughly 7.8k firms.

This is the latest in a string of relief measures introduced over the past few months to help businesses navigate the cost pressures associated with the war and ongoing supply chain disruptions. That includes AED 2.5 bn worth of stimulus packages from Dubai, a AED 6.2 bn Central Bank of the UAE resilience package which offered up to six months of loan deferrals, fee deferrals for postal and courier firms, and rent relief at Dubai South. The Finance Ministry also extended its small business tax relief scheme — originally set to expire at the end of June 2026 — through 31 December 2029, which eases taxes for resident taxable entities generating AED 3 mn or less in annual revenue.

#2- Also extended: The duty suspension on goods imported for re-export, temporarily admitted, or moved in transit was extended another 60 days, bringing the total extension to 180 days. The new notice covers suspended-duty cases expiring between 27 February and 31 October 2026. The extra 60 days run from the date each original suspension period expires, and Dubai Customs has left the door open to extending again.

The first extension, 120 days, came in June and reached 6.6k companies. It was part of a wider package that let firms pay duties in installments and cut financial penalties by 80%, which cleared more than AED 79 mn for 428 companies. The package also stretched the transit period from 30 to 90 days and let consignments enter through Khorfakkan, Fujairah, and the Hatta border crossing, bypassing the Strait of Hormuz.

#3- You can now open a DFM trading account entirely through the EFG Hermes One app, EFG Hermes UAE said in a press release (pdf). The new feature allows users to get a DFM investor number (NIN) and start trading directly on the DFM without paperwork or a branch visit. The move comes on the heels of a 1H 2026 that saw the DFM — where EGH Hermes is a top broker — attract nearly 43k new investors, most of whom are foreign.

WEATHER- Temperatures will hit 39°C today in Dubai and reach a low of 29°C, while Abu Dhabi will see a high of 41°C with a low of 30°C, according to our favorite weather app.

The big story abroad

Another round of US-Iran Hormuz negotiations: US and Iranian negotiators in New York are exploring a phased agreement in which Tehran would reopen the strait and Washington would lift its naval blockade, with Qatar mediating. Brent slid toward USD 106/bbl on the reports. The sticking point is that neither side wants to give up its leverage first, and a similar sequenced understanding struck in June collapsed within weeks. Tehran is willing to move its demand for transit fees into a side attachment, sources say, but not to give up control of the waterway. Trump has floated an agreement after the 3 November midterms, while former US negotiator Dennis Ross puts the odds of one before the vote at 30%.

Meanwhile, in bond market news: The US 30-year yield hit 5.48%, its highest since 2004, and the 10-year reached 5.20%. Japan's 10-year yield hit its highest since 1996. Pricey oil, AI spending, and deficits are all feeding the selloff, and traders are now pricing three more Fed hikes after last week's first increase in more than three years.

And Trump and Xi’s summit has wrapped, with China’s Xi Jinping’s White House state visit producing a two-month extension of the trade truce that was due to expire in November. That kicks tariffs, rare earths, and tech restrictions into the next round of talks. The two leaders also split on AI: Trump wants no new guardrails, while Xi says the two powers must manage the technology's growth.

Closer to home:

• Turkey is holding two days of talks, chaired by Finance Minister Mehmet Simsek, on repaying some 456k investors in 131 funds worth about USD 20 bn that were ordered into liquidation after a wave of redemption failures.
• Palestinian President Mahmoud Abbas reaffirmed plans for legislative elections on 28 November, the first in 20 years, though Fatah officials doubt the vote will go ahead.
• Saudi Arabia's Capital Market Authority is proposing an overhaul of IPO rules that would make underwriters commit to taking up unsold shares, require banks to verify that orders are backed by real liquidity, and require issuers to disclose forecasts. Public comments are open until 22 October.

***

You’re reading EnterpriseAM UAE, your essential daily roundup of business, economics, and must-read news about the UAE, delivered straight to your inbox. We’re out Monday through Friday by 7am UAE time.

EnterpriseAM UAE is available without charge thanks to the generous support of our friends at Mashreq and Hassan Allam Properties.

Were you forwarded this email? Tap or click here to get your own copy of EnterpriseAM UAE.

Want to send us a story idea, request coverage, ask for a correction, or otherwise get in touch? Reach out to us on [email protected].

DID YOU KNOW that we also cover Egypt, Saudi Arabia, and the MENA logistics industry?

***

Circle your calendar

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.