Good morning, lovely people, and welcome to the start of a new week — which is also the final week of October. We kick it off with news that retail investors will now be able to invest in the government’s treasury sukuk program under a new initiative, along with a new digital asset partnership between MultiBank and UFC champion Khabib Nurmagomedov in Dubai, updates on Amanat’s education unit’s IPO, and an acquisition from Piper Sandler.

WEATHER- It’s a sunny day in Dubai, with a high of 34°C and an overnight low of 25°C, according to our favorite weather app. It’s slightly cloudier in Abu Dhabi, with a chance of some early showers and a high of 33°C, and an overnight low of 23°C.

WATCH THIS SPACE-

#1- G42 denies “defamatory” claims from US intelligence agencies of ties to Huawei, Chinese missiles: Abu Dhabi AI firm G42 denied allegations from US intelligence agencies that it gave Huawei access to technology to help extend the range of China’s PL-15 and PL-17 air-to-air missiles, the Financial Times reports, citing people familiar with the matter. The firm said the intelligence, gathered in 2022, was “false and defamatory allegations” from “sources with questionable motive and intent,” and that its relationship with Huawei was limited to cloud services and has already ended in 2023.

Huawei also rejected the allegations, saying there was “no technology provision or transfer” that could have been used for military purposes.

REMEMBER- G42 earlier agreed to remove Huawei equipment from its data centers amid concerns from Washington over ties with Chinese tech firms, part of a broader shift toward cooperation with US firms following Microsoft’s USD 1.5 bn investment in 2024. The cooperation helped allow agreements to export Nvidia chips to the UAE, though the US has been limiting exports and only approved chips for US-linked infrastructure.

G42 has a lot riding on chips from the US: The company now leads the 5 GW Stargate AI campus, developed with Nvidia, OpenAI, Cisco, Oracle, and SoftBank under the USD 500 bn US Stargate initiative and a USD 200 bn US-UAE investment pact. The first phase, Stargate UAE, is expected to open in 2026, with final agreements on the remaining 4 GW still under negotiation amid continued US security scrutiny.

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#2- First Abu Dhabi Bank and Abu Dhabi Commercial Bank are in talks with advisors to undertake Significant Risk Transfers (SRTs) as means to boost their capital amid elevated capital requirements, according to Bloomberg. The move — which is still at early stages and would be subject to regulatory approvals — comes in preparation for a slight increase of 50 basis points in capital requirements next year, according to the business information service.

Both banks are sitting comfortably with healthy common equity tier 1 ratio, with FAB’s currently at 13.7% — above its self-imposed target of over 13.5% — and Abu Dhabi Commercial Bank set to boost its CET1 ratio by 120 basis points after its AED 6.1 bn rights issue.

SRTs are financial transactions used by banks to transfer credit risk of a loan portfolio to a third party. These transactions, often instrumented by credit-linked notes, allow lenders to free up capital for loans, acquisitions, and shareholder payouts, as the risk of default is insured, and help them avoid having to issue new equity or cut dividends.

REMEMBER-ADCB has been cleaning up its bad debt, selling USD 1.4 bn in distressed loans to Davidson Kemper earlier this month, and another USD 1.1 bn distressed loan portfolio two years ago.

51 of the largest financial institutions have seen a nearly one third increase in SRTs transactions in 2024 from the previous year covering up to EUR 21 bn of credit risk on EUR 260 bn loans, according to a survey on risk sharing released by the International Association of Credit Portfolio Managers. These transactions are mainly dominated by European and North American banks. The global SRT market is expected to grow at an average of 11% annually over the next two years, according to a Bloomberg intelligence survey.

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#3- British Finance Minister Rachel Reeves will be engaging in trade talks with officials from the GCC during her visit to Saudi Arabia for FII, Bloomberg and Reuters report. Talks initially began in 2022, with Trade Minister Chris Bryant telling parliament this month that talks were at an “advanced stage.”

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#4- Abu Dhabi to expand agri-trade with new initiative: The Abu Dhabi Investment Office (ADIO) has formed a partnership with agri-food agencies that aims to boost exports of high-quality perishable goods from Al Ain and Abu Dhabi, according to a press release. Under the new partnership, ADIO will help offer new trade routes for Abu Dhabi exports, while Abu Dhabi Airports, ADAFSA, Abu Dhabi Customs will join forces to streamline the movement of agricultural products through global logistics corridors.

Who’s involved? ADIO linked up with Abu Dhabi Airports Company, Abu Dhabi Customs, and Abu Dhabi Agriculture and Food Safety Authority (ADAFSA), as well as local agri-tech firms Silal, Pure Harvest Smart Farms, ESG Agro and Elite Agro Holding.

Abu Dhabi’s agricultural exports are set to target markets according to seasonal demand, like Europe and Asia during the winter season. A committee — formed from all the involved partnerships — is set to be established to oversee the project’s implementation — with periodic evaluations to monitor its progress.

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#5- Dubai is getting a new museum: Dubai will see the construction of the Dubai Museum of Art, a five-storey cultural hub on Dubai Creek developed by Al Futtaim Group and designed by Japanese architect Tadao Ando, according to a Dubai Media Office statement. The museum will serve as a platform for regional and international contemporary art and will include adaptable exhibition halls, a library, study rooms, and event spaces for artist talks, workshops, and art fairs.

DATA POINTS-

#1- Adia capitalizes on SMAs to increase hedge fund exposure: The Abu Dhabi Investment Authority (ADIA) poured USD 40 bn into dozens of hedge funds so far this year by increasing its use of separately managed accounts (SMAs), sources familiar with the matter told Bloomberg. The sovereign entity’s hedge fund exposure through SMAs rose by several bns of USD compared to 2024 as it steps up its investments in alternative assets.

SOUND SMART- SMAs are investment structures that give large investors direct ownership and control when it comes to allocations to hedge funds. They allow investors to tailor strategies, use debt financing, and benefit from discounted fees and more efficient capital use. The uptick in popularity led 60% of hedge funds to offer them last year, with 8% of them offering their first SMA, according to a Goldman Sachs report.

ICYMI- At the start of the year, Adia acquired a minority stake in Canada-based managed account services provider Innocap Investment Management, which facilitates investment through SMAs.

Adia has been expanding its alternative investments portfolio this year: In addition to the Innocap stake acquisition, the fund invested in credit-focused asset manager Oak Hill Advisors’ European special situations strategy in September, which offers flexible financing solutions for European corporate and non-corporate borrowers.

#2- GCC GDP grows 3.0% in 1Q 2025: The combined real GDP of Gulf Cooperation Council (GCC) countries rose 3.0% y-o-y to USD 466.2 bn in 1Q 2025, while nominal output climbed 5.7% y-o-y to USD 588.1 bn, Wam reports, citing GCC-Stat data. All members saw positive growth during the quarter, reflecting broad-based expansion across key sectors.

The oil sector remained the region’s largest contributor, accounting for 22.9% of total GDP, followed by manufacturing at 12.7% and wholesale and retail trade at 9.6%. Other activities made up roughly a quarter of total output, underscoring steady momentum in non-oil diversification efforts across GCC economies.

ICYMI- The IMF recently raised its growth prediction for GCC GDP by 0.9% to 3.9% for this year, while BMI penciled in growth of 3.9% and the World Bank pegs the region as seeing 3.5% growth.

PSA-

Abu Dhabi to roll out dynamic speed limits: Starting today, Sheikh Zayed bin Sultan Road in Abu Dhabi will have variable speed limits that adjust in real time between 80-100 kph, the Integrated Transport Center said in a post on X. The system, part of a nationwide effort to reduce road accidents, will lower limits during adverse weather, peak traffic, or roadworks to improve safety and ease congestion.

HAPPENING TODAY-

#1- The Future Hospitality Summit (FHS) will run from today until Wednesday at Madinat Jumeirah in Dubai. The summit brings together global hospitality leaders, investors, and industry leaders to explore investments to scale their businesses across key sectors, from hospitality to sustainability, technology, startups, talent, education, and branded residences.

#2- The UAE Africa Tourism Investment Summit is also taking place today in Dubai. Part of the FHS, the summit will convene over 250 senior officials, policymakers, and investors from 53 African countries to explore investments and foster cross-collaboration between government entities and private sectors in tourism, investment, infrastructure, and hospitality sectors in the UAE and Africa.

#3- The annual Network Forum Middle East opens today at the Hilton Abu Dhabi Yas Island, bringing together over 100 regional capital market leaders from asset management, post-trade, investment banking, and custody sectors. This year’s event will spotlight Abu Dhabi’s evolving market infrastructure, including the ADX Group’s new platform, and its subsidiaries Abu Dhabi Clear and Abu Dhabi Central Securities Depository.

#4- The Asia Pacific Cities Summit is also underway today and will run until Wednesday at the Dubai Exhibition Center. The three-day summit gathers government leaders, urban planners, and industry experts from across the Asia-Pacific region to discuss sustainable city development, smart infrastructure, and cross-border collaboration.

HAPPENING THIS WEEK-

#1- The Emirati Media Forum (EMF) will take place tomorrow at the Museum of the Future, organized by the Dubai Press Club. The annual event will gather senior UAE media executives, editors, and content creators to discuss the sector’s digital transformation and strategies to strengthen trust and counter misinformation.

#2- The Annual Gulf Ins. Forum is happening tomorrow and on Wednesday at the Millennium Plaza Downtown Hotel, Dubai. The event will gather insurers, brokers, and regulators from across the region to discuss reins. capacity, pricing, solvency, and risk management in GCC markets, with sessions focusing on resilience, catastrophe response, and financial strength.

#3- The Branded Residences Forum is taking place on Wednesday at Madinat Jumeirah in Dubai, bringing together developers, hospitality groups, and investors to examine the growing demand for branded real estate and evolving partnerships between luxury hotel brands and property developers.

#4- Federal National Council (FNC) speaker Saqr Ghobash will lead a delegation to Azerbaijan tomorrow to attend the international parliamentary conference, marking the 30th anniversary of Azerbaijan’s constitution, state news agency Wam reports. The FNC delegation will hold bilateral talks aimed at deepening parliamentary cooperation between the UAE and Azerbaijan, covering legislative and constitutional affairs.

THE BIG STORY ABROAD-

All eyes are on US-Asia ties this morning, as the US and China look closer to agreeing a truce on tariffs that would do away with the US’ 100% tariff on Chinese imports and delay China’s rare earth export controls. US officials say a framework has already been hashed out for US President Donald Trump and Chinese President Xi Jinping to ratify when they meet on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea, on Thursday. (Reuters | Bloomberg | Financial Times | Wall Street Journal)

Trump is still covering his bases with agreements with other Southeast Asia partners that will relax trade barriers and expand rare earth elements’ access for the US. The agreements with Malaysia, Thailand, Vietnam, and Cambodia comes as the US looks to diversify its critical minerals supply chains. (Reuters | Bloomberg)

In M&A news, Swiss pharma firm Novartis is acquiring rare disease drugmaker Avidity for USD 12 bn — its largest acquisition yet. (Bloomberg | WSJ)

AND- The latest on the Louvre heist: French police arrested two suspects they say could be related to the theft of bns worth of jewels from Paris’ Louvre Museum last week. (Guardian | Reuters)

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