Modest non-oil recovery in May

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Dubai-based Apparel eyes listing for its Indian business + DMCC rolls out an incentive package for firms

Good morning, friends. This morning brings somewhat positive news on the non-oil sector, which recovered slightly in May, likely helped by the positive sentiment around a potential US-Iran agreement — though softening demand was still weighing on some firms.

Plus: As IPO markets remain muted at home, firms are looking overseas. Dubai-based Apparel Group is lining up a potential Mumbai listing of its India arm, a move that would crystallize a decade of expansion across 300+ stores and brands from Victoria’s Secret and Aldo to Tim Hortons and Nike Littles.

Closer to home, DMCC rolled out another round of fee cuts and renewals relief as freezones stack stimulus to cushion firms from regional volatility, while the Abu Dhabi Investment Authority anchored Kotak Alternate Asset Managers’ latest India real estate fund with more than USD 675 mn, extending one of its longest-running partnerships and reinforcing the UAE’s deepening exposure to India’s property cycle.

PSA- Another national holiday is coming up soon, with UAE authorities confirming that federal government bodies and private sector entities will be off on Monday, 15 June, to celebrate the Hijri New Year, according to a post on X. Employees will return to work on Tuesday, 16 June.

WEATHER- We’re deep into the summer heat now, with a high of 41°C in Abu Dhabi today, along with a low of 31°C. Over in Dubai, look for a high of 40°C and a low of 29°C.

Apparel Group eyes Mumbai listing

Dubai-based Apparel Group is eyeing up India’s IPO market to potentially float its Indian retail business. The fashion and lifestyle retailer has started preliminary discussions with banks about a possible Mumbai listing of Apparel Group India, Bloomberg reports, citing people familiar with the matter. The offering could come later this year or in early 2027.

The India play: Apparel Group India gives the Dubai retailer exposure to India’s consumer and retail market through more than 300 stores across over 50 cities and more than 20 brands, including Victoria’s Secret, Aldo, Crocs, Charles & Keith, Tim Hortons, and Nike Littles.

Timing will be the main test, with India’s IPO market cooling as companies delay listings amid Iran-war-linked volatility and foreign investor outflows from the equity market.

GLP-1 pills are here

The UAE is set to become the first country outside the US to offer the Wegovy pill after Danish drugmaker Novo Nordisk picked the country for the first international rollout of the oral version of its GLP-1 weight-loss drug, according to a statement. Unlike its traditional injectable format, which is already commercially available across several major markets, the pill version is just beginning its global expansion. Estimates project the GLP-1 industry could be worth as much as USD 254.2 bn by 2034.

Why the UAE? Novo Nordisk said the decision was driven by strong patient demand and a mature healthcare ecosystem. The treatment has also been cleared by the Emirates Drug Establishment.

Another support package lands

The Dubai Multi Commodities Center (DMCC) rolled out incentives for new and existing firms in the hub, it said in a statement. Companies looking to join the DMCC can now get a 10% reduction on one-year licensing and 20% on longer licenses. Firms already registered within the DMCC will see fees of up to AED 5k waived for late lease and license renewals, with renewal and expansion fees slashed by 15-25%.

IN CONTEXT- The DMCC is the latest freezone to be offering a helping hand to firms that are feeling the strain of the regional war as hubs move to boost business sentiment. Dubai South and Qashio have rolled out support measures targeting SMEs, while more broadly, Dubai introduced two stimulus packages in March and May to prop up affected sectors.

The big story abroad

We have a slew of updates on the regional conflict. A Republican-controlled US House of Representatives has voted to block President Donald Trump from launching further strikes on Iran unless congressional approval is obtained. This is the House’s fourth attempt to curb Trump’s military actions and still requires approval from the Senate.

Is headway being made? Trump has said that Tehran has “already agreed” not to have nuclear weapons, adding that it can still change its mind. Iran’s Foreign Ministry declined to weigh in while an unnamed government source said the president’s comments were misleading.

More strikes: Kuwait International Airport was targeted yesterday in a strike that injured several people and forced flight cancellations. While regime-affiliated media reported that Iranian authorities have denied responsibility and blamed US interceptor rockets, the US military rejected those claims.

ALSO- Lebanon and Israel have agreed to a ceasefire. The truce — brokered by Washington — is contingent on a complete halt to Hezbollah fire and the total evacuation of its operatives from the South Litani Sector.

Meanwhile, Uber is reportedly plugging some USD 500 mn into Nuro, a self-driving startup. The startup — backed by Nvidia and Soft Bank — aims to license its software to carmakers and is expected to launch later this year.

SpaceX’s IPO isn’t the only offering making headlines: Anthropic has reportedly tapped Morgan Stanley and Goldman Sachs to lead its highly-anticipated IPO this year, which could take place as early as October.

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Non-oil sector saw slight improvement in May

Operating conditions in the UAE’s non-oil private sector saw a modest recovery in May, though the improvement masked deepening strains from regional geopolitical tensions and the worst supply-chain disruption since the pandemic.

The S&P Global UAE Purchasing Managers’ Index (pdf) rose to 52.6 in May, up from 52.1 in April, remaining comfortably in expansion territory but still running well below its long-run average of 54.3. That’s mostly due to a slight improvement in operating conditions and output growth despite ongoing supply chain disruptions, which weighed on export orders and input delivery times.

MENA economist Hamzeh Al Gaaod thinks the recovery can be attributed to the “positive sentiment on [the US and Iran] reaching an [agreement],” along with the persisting ceasefire.

The persistent issue for non-oil firms is the “cascading effect” of the maritime trade disruptions through the economy and the uncertainty over how long the conflict will last — both of which are suppressing export demand. “The UAE’s non-oil sector has been significantly impacted by the regional tensions and the consequent supply disruptions,” CIO at Century Financial Vijay Valecha tells EnterpriseAM.

Yes, but — could the impact have peaked? “The pace of decline of [export orders] eased notably from April, signaling the worst may be behind us,” he adds.

One thing that might take some time to resolve is the issue of reconciling increased costs with softening demand. “Businesses often mentioned that the soft demand environment had made firms more price competitive than usual, resulting in higher fuel and material prices being absorbed by companies rather than passed on to customers,” David Owen, principal economist at S&P Global Market Intelligence, said. That’s weighing on employment trends, with hiring slowing to its mildest pace since October.

The good news: The costs firms are absorbing are being offset by multiple government programs aimed at providing support to the economy, Al Gaaod says. The government and freezones alike are offering support packages and stimulus to help firms struggling with disruptions and increased costs, with Dubai so far introducing a total of AED 2.5 bn for sectors like tourism, trade, education, customs, transport, and aviation.

The one clear bright spot is sentiment: Business expectations for the year ahead remained strong in May, with firms treating current disruptions as temporary and anticipating a swift growth rebound once conditions normalize.

That optimism is well-placed, Valecha says. “When the conflict eases, pent-up export demand and a recovering tourism sector position the UAE for a sharp PMI re-acceleration toward and beyond its long-run average,” he adds.

Dubai mirrored the national trend, with its PMI edging up to 52.0 from 51.6 in April — but activity growth there slowed for a fifth consecutive month, reaching its weakest level since June 2021.

Adia anchors USD 1 bn real estate fund in India

Adia is writing another large check in India — this time in its property market. A wholly owned subsidiary of the Abu Dhabi sovereign wealth fund anchored a USD 1 bn investment vehicle for India’s Kotak Alternate Asset Managers, CNBC TV18 reports.

The details: Adia’s contribution came in at upwards of USD 675 mn. The fund is the 14th real estate fund for Indian financial services conglomerate Kotak Mahindra Group’s investment arm, and the sixth Kotak real estate play that Adia has invested in.

Next up: The fund will focus on providing growth and development financing across residential, commercial, and other real estate segments in major Indian cities.

Adia has been expanding its India portfolio in recent years. Back in 2024, it announced plans for a USD 4-5 bn fund in Gujarat International Finance Tec-City, and last year saw it back both Indian digital stockbroker Groww’s and Bengaluru-based solar manufacturer Emmvee Photovoltaic Power’s IPOs. Wider UAE-India cooperation received a boost in January, as the two sides pledged more collaboration, including on trade and investments.

ICYMI- The investment comes just days after Adia participated in Indian precision equipment manufacturer KRN Heat Exchanger’s qualified institutional placement.

du launches USD 50 mn venture fund with Shorooq

du is putting USD 50 mn behind its startup ambitions, launching a new corporate venture fund with Mubadala-backed venture capital firm Shorooq, according to a press release (pdf). The fund will back startups working across areas including AI, fintech, cybersecurity, cloud services, gaming, enterprise software, and customer experience technology.

The move gives the telecom operator a direct route into emerging technologies as well as companies that could eventually feed into its broader digital ecosystem. Shorooq will manage the fund and oversee investments, with a significant share of capital earmarked for UAE-based startups, while giving founders access to du’s infrastructure, customer base, and market reach.

The firm intends to build the portfolio “with discipline rather than to a quota,” focusing on startups that can meaningfully support du’s strategy, Shorooq Founding Partner Shane Shin told EnterpriseAM UAE. “We'll be active in the market from launch, and we'll move at the pace the right opportunities allow,” he adds.

Strategic fit comes first: Shin said startups will be assessed through Shorooq’s standard sourcing and due diligence process, but with an additional filter of whether the company strengthens du’s ecosystem or advances its digital ambitions.

The focus is on solving problems tied to du’s business. Shin said the common thread is startups turning new technologies into practical applications that can connect with du’s infrastructure.

What startups get beyond funding: Portfolio companies will also gain access to du’s distribution channels, enterprise relationships, and customer reach, Shin says.

DFSA appoints new MD of markets

Dubai Financial Services Authority tapped Armin Peter (LinkedIn) as managing director of its markets division, according to a press release. Peter, who’ll take up the role on 3 August, will lead the division’s strategy, as well as oversight of regulatory initiatives, focusing on capital raising, listings, market infrastructure, and investor protection.

Peter has close to 30 years of capital markets and banking experience, and his career includes roles at the International Capital Markets Association, Global Digital Finance, and the Emerging Markets Investors Alliance. He also spent nearly 18 years at UBS, serving as head of sustainable banking for EMEA and global head of debt syndicate.

Ewec taps Taqa to lead on 2.5 GW Taweelah project, WTW plants deeper roots in Dubai, Al Ansari expands Omani footprint

Ewec taps Taqa to lead on 2.5 GW Taweelah power project

Ewec awards competitive tender project to Taqa: Emirates Water and Electricity Co. (Ewec) awarded a contract to build the 2.5 GW Taweelah C independent power producer project to Taqa, as well as a consortium of Saudi Arabia’s Al Jomaih Energy and Water Co. and Singapore’s state-owned energy firm Sembcorp Industries, according to a press release (pdf). This follows a competitive tender process that attracted bids from three international consortiums, including bidders from Japan and Korea.

The details: The agreement locks in a power purchase agreement that secures Ewec electricity from the plant through to 2050. State-owned Taqa will hold a 60% stake in the plant, with Al Jomaih and Sembcorp holding the remaining 40%. The agreement also includes provisions for an operations and maintenance company, of which the consortium will own 60% and Taqa the remaining 40%. Taqa is leading on designing, financing, building, and maintaining the facility.

REFRESHER- The plant will be built at Al Taweelah Power and Desalination complex and will use high-efficiency combined cycle gas turbine technology as well as carbon-capture technology. It is slated to start commercial operations in 2029.

WTW is planting deeper roots in Dubai

WTW secures DFSA license: London-based and Nasdaq-listed multinational advisory and investment consulting firm Willis Towers Watson (WTW) secured a license from the Dubai Financial Services Authority to offer investment advisory services and arrange access to fund solutions directly from Dubai International Financial Center, according to a press release.

Up next: The approval gives WTW — which has USD 3.6 tn in AUM — access to a wider client base across wealth management, family offices, and end-of-service benefits. WTW has already worked with UAE-based employers on employee pension and savings plans, and it fully took over Dubai-based ins. and reins. brokerage firm Al Futtaim Willis last year.

Al Ansari expands Omani footprint

Al Ansari takes stake in Omani FX player: Al Ansari Financial Services is acquiring a stake in Oman-based FX and remittance firm Mustafa Sultan Exchange, according to a press release (pdf). The stake size and transaction value weren’t disclosed, though the target company is valued at AED 23 mn. The takeover comes as Al Ansari looks to expand its regional footprint by adding the exchange, which targets both retail and corporate clients, to its portfolio.

IN CONTEXT- Al Ansari became the largest remittance and exchange provider in the GCC by branch network last year after wrapping up its full acquisition of Bahraini forex firm BFC Group Holdings.

The warning lights are flashing

Signs that the global economy is suffering from the fallout of the US-Iran war are growing, with the OECD saying in its latest outlook that the global economy could face its worst slowdown in 40 years outside of the pandemic and the 2009 financial crisis if geopolitical tensions and disruptions continue into next year.

Under a prolonged disruption scenario, OECD expects global growth to come in at 2.1% in 2026 and 1.8% in 2027 — a significant downgrade from its earlier projection of 3.1% growth next year. It also expects several economies to potentially tip into recession if disruptions persist.

The energy shock is doing most of the damage. Crude oil prices rose more than 50% in the weeks following the outbreak of fighting, with gas prices spiking sharply across Europe and Asia and distillates — including jet fuel and diesel — surging alongside them.

Global inflation could be 0.4 percentage points higher this year and 1.3 points higher in 2027 in a prolonged disruption scenario.

At the same time, mns are at risk of losing their jobs in the EU, Bloomberg reports. As many as 560k jobs could be cut this year due to the energy costs, while 600k jobs are already under pressure in the automotive industry.

All of these data points are putting policymakers between a rock and a hard place. OECD expects some rate hikes this year, followed by rate cuts next year, in its scenario where the conflict resolves soon.

The developing world is already acting fast despite the difficult balancing act of reining in inflation while preventing economic harm. At least 10 emerging- and frontier-market central banks have raised rates since fighting began in late February, including Indonesia, Rwanda, South Africa, and Sri Lanka, Bloomberg reported elsewhere.

As for the US Federal Reserve, some Fed policymakers are pushing for rate increases, saying they might be necessary to rein in mounting inflation. The Fed is widely expected to leave its benchmark interest rate in the 3.50-3.75% range at its policy meeting in two weeks, but some traders are already placing a more than 60% chance that a rate hike could come in July.

MARKETS THIS MORNING-

Asian markets opened lower, tracking losses felt across Wall Street a day earlier as a fresh wave of attacks across the Middle East spooked investors. South Korea’s Kospi is down some 2%, while Japan’s Nikkei is looking at losses of 1.8%. The Shanghai Composite and Hang Seng are also in the red.

ADX	9,582	-0.4% (YTD: -4.1%)
DFM	5,686	-0.8% (YTD: -6.0%)
Nasdaq Dubai UAE20	4,422	-0.8% (YTD: -9.5%)
USD : AED CBUAE	Buy 3.67	Sell 3.67
EIBOR	3.5% o/n	4.2% 1 yr
TASI	11,002	-0.1% (YTD: +4.9%)
EGX30	52,564	-0.7% (YTD: +25.7%)
S&P 500	7,554	+0.7% (YTD: +10.4%)
FTSE 100	10,332	-0.4% (YTD: +4.0%)
Euro Stoxx 50	6,054	-0.9% (YTD: +4.4%)
Brent crude	USD 97.18	-0.6%
Natural gas (Nymex)	USD 3.24	+0.8%
Gold	USD 4,481	+0.3%
BTC	USD 65,284	-2.2% (YTD: -25.5%)
Chimera JP Morgan UAE Bond UCITS ETF	AED 3.68	-0.3% (YTD: -1.9%)
S&P MENA Bond & Sukuk	152.10	+0.3% (YTD: +0.1%)
VIX (Volatility Index)	16.06	+1.8% (YTD: +7.4%)

THE CLOSING BELL-

The DFM fell 0.8% yesterday on turnover of AED 708.9 mn. The index is down 6.0% YTD.

In the green: National Cement Company (+3.6%), Emirates Reem Investments Company (+3.0%), and Mashreqbank (+2.5%).

In the red: Agility The Public Warehousing Company (-5.0%), Talabat Holding (-4.8%), and BHM Capital Financial Services (-4.7%).

Over on the ADX, the index fell 0.4% on turnover of AED 970.7 mn. Meanwhile, Nasdaq Dubai was down 0.8%.

CALENDAR

JUNE

1-12 June (Monday-Friday): Subscription period for Emirates NBD’s mandatory open offer for 26% of India’s RBL Bank.

3-4 June (Wednesday-Thursday): MENA Investor Conference, Ritz-Carlton DIFC, Dubai.

3-4 June (Wednesday-Thursday): MENA Desalination Forum, Conrad Abu Dhabi Etihad Towers, Abu Dhabi.

15 June - 15 September (Monday-Thursday): Dubai Mallathon, Dubai.

17 June (Wednesday): Investopia Global Talks, Tashkent, Uzbekistan.

22-24 June (Monday-Wednesday): The International Glass Manufacturing Show, Dubai.

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.

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.

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.

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.

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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