THIS MORNING: UAE revives France’s fighter jet development program + more Emiratization for private sector

Good morning, everyone. Regional tensions are spilling over into the UAE: Renewed Houthi attacks on Saudi Arabia dragged UAE stocks lower on Friday, with the DFM falling 1.4% on Friday and the ADX shedding 1.2%, leaving the two indexes down 5.2% and 4.1% YTD. Heavyweights Emirates NBD and Aldar fell 3.5% and 3.7%, Reuters reports.

Air travel continues to take a hit too: Riyadh’s main airport partially reopened yesterday after a two-week shutdown, but only to Saudi carriers on international routes. The Houthis have warned it remains a target. Flydubai has pushed back its return to Saudi Arabia, and Etihad has canceled flights to the Kingdom.

At home, an oil spill has shut beaches across the northern emirates just as winter tourism season gets going. All beaches in Ras Al Khaimah and Umm Al Quwain are closed, along with Sharjah’s Al Hamriyah Beach. Ras Al Khaimah hasn’t said when its beaches will reopen. More in What We’re Tracking, below.

The risks could still escalate. Iran’s armed forces have drawn up plans to hit undersea cables in the Gulf if the US and Israel resume strikes on Iran, and say any damage would not be repaired quickly, Reuters reports, citing officials. Tehran has already threatened more US-linked digital assets in the region.

Business is still moving: Masdar is buying one of Greece’s largest solar projects days after the UAE pledged EUR 15 bn for the country. And Emirates NBD is tapping Asian banks for up to USD 1 bn now that Asian lenders are back in the Gulf.

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PSAs

Beaches across the UAE’s northern emirates are closed while authorities work to contain an oil spill from a tanker off Umm Al Quwain. Ras Al Khaimah shut all its beaches “until further notice” on Saturday, a day after Umm Al Quwain closed its beaches and coastal areas and Sharjah shut Al Hamriyah Beach as a precaution, Reuters reports. Ras Al Khaimah gave no reason for its closure.

What we know: The Climate Change and Environment Ministry confirmed the spill on Friday. By then, residents in Sharjah, Ajman, and Umm Al Quwain had been reporting fuel-like odors for days. The ministry says the smell poses no health risk. Satellite imagery from Wednesday shows oil leaking from a tanker about 25 km off Umm Al Quwain, according to The National. The ministry has told fishermen and other sea users to stay away from affected areas.

What we don’t know: Authorities haven’t named the tanker or said what caused the leak, but attacks on commercial vessels in Gulf shipping lanes since the Iran war broke out have raised concerns about maritime security and the conflict’s environmental fallout.

Why it matters: The spill comes at the start of the winter tourism season. It hits hardest in Ras Al Khaimah, an emirate that has built its tourism pitch on beaches and luxury resorts.

What’s next: Ras Al Khaimah hasn’t given a reopening date. Umm Al Quwain’s beaches stay shut until technical teams finish their assessments and decide what safety and marine protection measures are needed.

WEATHER- The mercury is hitting 36°C today in both Dubai and Abu Dhabi, before cooling to 27°C overnight, according to our favorite weather app.

Fighter jet talk

The UAE and France are reviving plans to jointly develop the next version of the Rafale fighter jet, Reuters reports, citing officials. The project, known as the Rafale F5, is a mid-life upgrade to Dassault Aviation’s warplane that adds new weapons and connectivity to keep it in service into the 2040s. An earlier round of talks between the two countries reportedly broke down over Abu Dhabi’s requests for access to sensitive French technology, French business outlet La Tribune reported at the time.

The revival came out of Macron’s Gulf visit last week, during which he and President Sheikh Mohamed bin Zayed agreed to expand the two countries’ strategic defense agreement. Macron said the agreement includes a joint strategy for the F5.

The financial terms haven’t been disclosed. Under the earlier proposal, the UAE was expected to fund roughly two-thirds of a program then estimated at EUR 5 bn, La Tribune reported. France has set aside EUR 3 bn for the F5 in its 2027 draft budget.

Why it matters: The UAE is already the Rafale’s biggest customer. A development role would give it a stake in the aircraft itself, and Abu Dhabi is likely to push for technology transfers or local production as part of any deal, according to Reuters. That would extend the defense localization drive we’ve been tracking, which aims to build more of the UAE’s military hardware at home. Dassault is working with Edge Group, a senior French official told the newswire.

More Emirati educators

Abu Dhabi is setting Emiratization targets specifically for teachers in its private schools, aiming to bring in more than 2k UAE nationals over the next five years, according to the Abu Dhabi Media Office. The policy from the Abu Dhabi Department of Education and Knowledge (ADEK) adds emirate-level targets for teaching roles on top of the existing federal rules. Until now, schools could meet those rules with administrative hires as well as teachers.

Five school operators have already pledged a combined c. 600 hires, about 30% of the target. Hiring will start with social studies, Arabic, and Islamic studies.

IN CONTEXT- Most private companies are keeping pace with the federal rules: 95% of firms covered by Emiratization requirements met their 1H 2026 targets, the Ministry of Human Resources and Emiratization (MoHRE) said in July. Companies with 50 or more employees must raise the Emirati share of their skilled jobs by 2 percentage points a year, reaching 10% by the end of 2026. Those that miss the target pay AED 10k a month for each unfilled position.

Adnoc eyes AED 60 bn for localization

Adnoc has mapped out more than AED 60 bn worth of products it wants manufactured in the UAE through 2030, covering over 200 essential products and a range of critical spare parts, many of which it currently imports, the state oil company said at its Make it with Adnoc Forum, ahead of ADIPEC. The list runs from drilling, completion, and rotating equipment to power and automation systems, chemicals, and catalysts.

Local suppliers get a guaranteed customer base: Adnoc has expanded its Local+ program to 100+ UAE manufacturers. Contractors bidding on new Adnoc projects will have to source relevant products from manufacturers on that list. Adnoc is also overhauling procurement to make it easier for suppliers to compete, saying onboarding will be up to 80% faster and purchasing cycles up to 40% shorter.

IN CONTEXT- Adnoc is close to its existing localization target. The company has hit AED 80 bn of its AED 90 bn local manufacturing target for 2030, localizing more than 130 products and helping set up or expand 95 factories, Adnoc Group Chief Commercial and In-Country Value Officer Omar Alnuaimi said at the forum, according to The National.

Creditors come knocking 

Abu Dhabi Commercial Bank, Barclays, London hedge fund Fidera, and Bank of Baroda are among 36 creditors seeking repayment from bankrupt Dubai remittance firm UAE Exchange, Bloomberg reports, citing a report it reviewed and court filings. A Dubai appeals court upheld bankruptcy proceedings on Wednesday, while the court-appointed trustee is still assessing creditor claims.

BACKGROUND- This goes back to the collapse of B.R. Shetty’s business empire in 2020: UAE Exchange was part of the now-defunct Finablr group, which unraveled after a short-seller report sparked a crisis at B.R. Shetty’s hospital operator NMC Health. UAE Exchange halted transactions in March 2020 and came under the Central Bank of the UAE’s supervision. A proposed takeover by investors linked to Swiss-based Prism Group and Abu Dhabi’s Royal Strategic Partners never materialized for UAE Exchange after the buyers failed to secure regulatory approvals, according to a report prepared for the court.

There’s not much left to recover from: UAE Exchange has no employees, operating license, or ongoing business, according to a July court judgment. An external assessment put its net assets at negative AED 3.8 bn (USD 1.03 bn) in 2025, compared with positive AED 828 mn in 2018. The trustee has requested more time to verify claims, with the proceedings set to determine how much creditors can recover.

And the Shetty saga isn’t over: As we reported earlier this month, Shetty has separately sued Bank of Baroda for USD 15 bn over alleged misconduct linked to NMC’s collapse. The bank denies wrongdoing. That litigation is separate from the UAE Exchange bankruptcy but underscores how the fallout is still playing out in court six years later.

Happening today

Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan is in Canada today for an official visit, where he will meet with Canadian Prime Minister Mark Carney, according to the Abu Dhabi Media Office. Discussing ways to increase bilateral cooperation is on the agenda for the two leaders.

ICYMI- The UAE and Canada wrapped up talks on a comprehensive economic partnership agreement earlier this year, but other aspects of bilateral cooperation have been slow to move, namely the USD 50 bn investment framework that hadn’t been deployed as of July.

The big story abroad

Leftist incumbent Luiz Inácio Lula da Silva has secured a fourth term as Brazil’s president, winning 51.8% of the vote and beating right-wing challenger Flávio Bolsonaro. The result is a setback for US President Donald Trump, who backed Bolsonaro, and could result in continued tense relations between Washington and Latin America’s largest economy.

AI spending clouds strong earnings hopes: Alphabet, Microsoft, and Amazon are expected to report strong quarterly earnings this week, but investors will be listening closely for what they say about AI. Investors are reportedly torn on the technology. They believe it will drive markets in the long run, but they doubt the hundreds of bns being spent will pay off anytime soon. That’s a sore point now that the spending has pushed several tech giants into negative freecash flow.

Kyiv is ready to talk peace. Ukrainian President Volodymyr Zelensky said Ukraine is prepared to join trilateral talks between technical teams from Ukraine, the United States, and Russia. His priorities are an “energy ceasefire, the sea, grain, an all-for-all exchange.” The announcement comes after Russian President Vladimir Putin signaled interest in three-way negotiations during talks with US Special Envoy Steve Witkoff in St. Petersburg.

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