Gulftainer’s Khorfakkan bet and the limits of the east coast boom

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WHAT WE’RE TRACKING TODAY

THIS MORNING: IRH and Zambia move past mining spat + DAE taps Asian banks for USD 2.1 bn in funding

Good morning, everyone. As attacks on ships in the Strait of Hormuz continue and travel through the strait remains a trickle, the UAE’s east coast is having its moment, though not without its challenges or limits. That’s what we look at in today’s Big Story: Almost overnight, Gulftainer’s Khorfakkan terminal has gone from a low-key transshipment hub to the UAE’s main gateway outside Hormuz, with throughput jumping from 8k TEUS to 65k. We spoke to Group CEO Farid Belbouab about the expansion plans, as well as an analyst from Drewry about the limits of that very boom.

On the deals front, Agility Global is selling its entire 65.12% stake in Tristar to India’s Aegis Logistics for up to USD 581 mn, valuing the Dubai-based energy logistics player at USD 1.5 bn including debt.

IRH and Zambia’s ZCCM-IH seem to have patched things up, reaffirming their Mopani partnership while also exploring more mining prospects together. That comes just two weeks after ZCCM-IH accused IRH of breaching the takeover agreement and threatened arbitration.

Plus: Dubai is getting a tokenized water market, and DAE is tapping Asian banks for a USD 2.1 bn, seven-year loan, less than three months after closing its USD 9 bn Macquarie AirFinance acquisition.

IRH and Zambia move past mining spat

Abu Dhabi’s International Resources Holding (IRH) and Zambia’s state-owned ZCCM-IH are exploring more mining prospects together, Reuters reports, citing a joint statement. The two also reaffirmed their commitment to developing Mopani Copper Mines, where IRH acquired a 51% stake in 2024, and reiterated a previously pledged USD 1.1 bn investment commitment covering equity, shareholder financing, and operational support.

Quite the turnaround: Just two weeks ago, ZCCM-IH accused IRH of breaching its Mopani takeover agreement, threatening damages or arbitration. The Zambian miner alleged a USD 61 mn funding shortfall in 2025, said only USD 62.3 mn of a USD 308.1 mn development budget had been spent by March, and flagged missed production targets. IRH insisted at the time that relations remained strong, while neither side has confirmed whether the complaints have been resolved.

Still a long way to go: Mopani produced 66.4k tons of copper in 2025, against a target of 300k tons annually by 2029 — more than quadruple the current output. The ramp-up would contribute to Zambia’s wider ambition of producing 3 mtpa of copper by 2031.

IRH has been on the acquisition trail: The 2PointZero subsidiary previously pursued a stake in Zambia’s Konkola Copper Mines and last year agreed to acquire a majority stake in Congolese tin producer Alphamin Resources, extending its footprint across Africa’s critical minerals sector.

ICYMI- We reported on another reconciliation recently, after Emirates Global Aluminium (EGA) settled its dispute with the Guinean government, restarting bauxite shipments to the UAE.

Drawing in the next generation of wealth

Abu Dhabi and Dubai are among the top 10 cities worldwide for attracting the next generation of wealthy individuals, with the capital ranking eighth and Dubai 10th in Savills’ Next Generation Wealth Hubs Index. The study scored more than 100 destinations on their appeal to wealthy individuals under 40, from heirs to founders. Within the EMEA region, only London beats Abu Dhabi, while Dubai comes fourth. Savills credits Abu Dhabi’s growing financial center and family office presence and Dubai’s international connectivity and entrepreneurial ecosystem.

REMEMBER- The index measures potential, not inflows. We reported in April that inquiries for UAE residency programs dropped 13% q-o-q in 1Q 2026 amid regional tensions, although experts cautioned against interpreting the shift as a permanent exodus. Mashreq Private Bank head Vipul Kapur previously told EnterpriseAM he expects the next wave of demand to be generational, with tns of USD expected to change hands over the next decade and the UAE due its own share of that. Dubai has also been expanding its wealth management infrastructure, with DMCC introducing a new foundations framework to help families manage and pass on assets.

Kuwait eyes Fujairah for oil exports

Kuwait is studying access to a pipeline route through the UAE to Fujairah as it looks to bypass the Strait of Hormuz for its oil exports, Deputy CEO for Planning and Innovation at Kuwait Oil Company Mohammed Al Abduljaleel tells EnterpriseAM. It’s also in talks to connect to a proposed Saudi pipeline running to the Red Sea so that it could serve both countries.

Both are early: Neither route has reached feasibility-study stage, leaving costs and capacity estimates undetermined. Al Abduljaleel says Kuwait would pursue the projects as long-term investments regardless of whether regional tensions ease, with most crude continuing to move through existing Gulf ports under normal conditions.

Loan ranger

DAE is tapping Asian banks for USD 2.1 bn funding: Dubai Aerospace Enterprise (DAE) is seeking a USD 2.1 bn, seven-year loan, mostly from Asian banks, to fund working capital, Bloomberg reports. Emirates NBD, Bank of China, OCBC, and China Construction Bank Asia are arranging the facility. The funding comprises a USD tranche, which could price at 110 basis points over SOFR, and an AED tranche guided at 95 basis points over the Emirates Interbank Offered Rate (EIBOR).

The loan follows a big jump in DAE’s fleet: Less than three months ago, DAE closed its USD 9 bn acquisition of Macquarie AirFinance. The agreement made it the world’s third-largest aircraft lessor and added commitments for nearly 150 aircraft, with deliveries running into the 2030s. The new funds add to the USD 4.4 bn in available liquidity DAE held at the end of June, according to its 1H results.

It’s the second major Gulf financing with Chinese lenders on board this month, coming on the heels of QatarEnergy’s USD 3 bn agreement with four Chinese banks. Chinese lenders appeal to Gulf companies because they offer large commitments, competitive borrowing costs, and longer repayment periods, even amid regional disruptions, Natixis’ Alicia Garcia Herrero tells EnterpriseAM.

Shetty strikes back

NMC founder B.R. Shetty is launching a new USD 15 bn court battle against Bank of Baroda. The UAE-based businessman filed a lawsuit against the Indian state-owned lender and 25 other defendants in the Bombay High Court, alleging that bank officials helped facilitate fraud behind the collapse of NMC Health, Reuters reports, citing court filings.

What’s the case? Shetty alleges that bank officials facilitated circular fund transfers, ignored more than 100 anti-money laundering alerts, and accepted forged signatures on personal guarantees he says he never authorized. He’s seeking USD 5 bn each in direct damages, consequential losses, and reputational harm — bringing the total claim to $15 billion — plus 18% annual interest, according to Gulf News.

The bank isn’t backing down: Bank of Baroda says it hasn’t been served with the suit and that the allegations remain untested in court. It has pledged to defend itself if served while separately pursuing Shetty for INR 28 bn (USD 295 mn) in outstanding dues through recovery proceedings in India and the UAE.

REMEMBER- The bank only recently settled another NMC dispute: Bank of Baroda agreed in July to pay USD 600 mn to resolve claims brought by NMC and its administrators, discontinuing the ADGM cases and withdrawing proceedings in England. Shetty wasn’t party to that settlement and argues it doesn’t extinguish his separate claims.

The backstory: Once the Gulf’s largest private healthcare provider, NMC entered administration in 2020 after disclosing USD 6.6 bn in debt, well above earlier estimates of USD 2.1 bn. The judicial fallout has dragged on: NMC dropped a GBP 2 bn negligence claim against EY earlier this year, while Shetty was separately ordered to pay USD 46 mn to State Bank of India over a personal guarantee, as we’ve previously reported.

Big ambitions for Abu Dhabi’s clusters

Abu Dhabi is targeting AED 235 bn in investments across four specialized economic clusters by 2045, Abu Dhabi Department of Economic Development Undersecretary Hamad Sayah Al Mazrouei told Al Ittihad. The clusters in question: Smart and autonomous vehicles (SAVI), agrifood and water (AGWA), health, longevity, and med. (HELM), and finance, ins., and digital and alternative assets (FIDA). Together, they are expected to contribute more than AED 284 bn to the emirate’s GDP and create 130k specialized jobs by 2045.

REMEMBER- Abu Dhabi has been launching specialized clusters for several years, rolling out SAVI in 2023, followed by AGWA in 2024, HELM in April 2025, and FIDA last December. An earlier projection said the cluster had aimed to attract over AED 217 bn in investments, although Al Mazrouei did not indicate whether the latest figure represents a formal revision.

Data point

AED 2.1 tn (USD 572 bn) — that’s the value of Dubai’s active and planned project pipeline spanning real estate, aviation, transport, and infrastructure, Dubai Ruler Mohammed bin Rashid Al Maktoum was quoted by Arabian Business as saying at the Mohammed bin Rashid Leadership Forum. Real estate accounts for the biggest chunk, with AED 1.1 tn in developments through 2030, including plans for some 350k residential units.

Where else is the money going? Aviation accounts for some of the biggest commitments, including AED 328 bn for Emirates and flydubai fleet expansion and AED 128 bn for Al Maktoum International Airport. Another AED 100 bn is earmarked for road upgrades and Dubai Metro’s Blue and Gold lines, while AED 151 bn is allocated to power and water infrastructure. Other major projects include the AED 80 bn Dubai Strategic Sewerage Tunnels system and the AED 30 bn Tasreef drainage project.

ICYMI- We reported yesterday that Dubai’s RTA is eyeing an integrated underground transport network, with Director General Mattar Al Tayer telling the forum it would move people, goods, and services beneath the city. It remains at the conception stage, with no cost or timeline given.

PSA

WEATHER- Dubai will see a high of 38°C today, while temperatures in Abu Dhabi will hit 37°C, before it cools down to 29°C overnight in both emirates, according to our favorite weather app.

The big story abroad

Two Singapore-registered container vessels were struck by “unknown projectiles” while crossing the Strait of Hormuz earlier this week, according to a statement (pdf) by the Maritime and Port Authority of Singapore. One of the vessels caught fire and sank, while the other, struck separately, sustained hull damage. No injuries were reported in either incident.

Anthropic’s 3Q revenue jumped 45% q-o-q to USD 16.8 bn, and the company was profitable on an adjusted basis, according to an investor who attended a pre-IPO meeting with its leadership, Reuters reports. Revenue came in at USD 4.7 bn in 1Q and USD 11.6 bn in 2Q, the source said, as Anthropic courts prospective investors ahead of its highly anticipated IPO.

A bipartisan group of eight US states said yesterday they had sued OpenAI in state courts across the country, alleging ChatGPT has coached users, including teenagers, to harm themselves or others. OpenAI also faces lawsuits alleging ChatGPT helped users plan mass shootings or other acts of violence.

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Gulftainer’s USD 2 bn Khorfakkan bet, and the limits of the east coast boom

For decades, the UAE’s east coast has operated in the shadow of Jebel Ali’s 14 mn TEU ecosystem. The war is changing that pecking order. Khorfakkan, the UAE’s largest container port outside Hormuz and Gulftainer’s flagship terminal, is set for a USD 2 bn expansion that will double its capacity to 10 mn TEUs, alongside 2-3 mn TEUs of inland logistics capacity.

“This [expansion] has been on our radar since last year, but recent disruptions accelerated our plans,” Farid Belbouab, Group CEO of Gulftainer, tells EnterpriseAM in an exclusive interview. “2026 became the inflection point where Khorfakkan evolved from a transshipment hub into a key gateway on the UAE’s East Coast.”

Belbouab insists the masterplan is not a wartime land grab. “The expansion of Khorfakkan to 10 mn TEUs is not about building capacity overnight; it is about building an ecosystem aligned with demand,” he says. Phase 1 takes the terminal to 5 mn TEUs, with modular expansion to 10 mn+ TEUs “in the next few years.” The business case, he says, is underpinned by structural shifts in trade.

War puts Khorfakkan on the map

A forgotten port finds its moment: Before the Strait of Hormuz closure, Khorfakkan had lost “its anchor clients during the 2010s both to Jebel Ali and the fast-growing Khalifa Port,” Eirik Hooper, senior associate at maritime consultancy Drewry and a former DP World executive, tells us. Since the conflict began, Gulftainer has rapidly reinvigorated the vastly underused terminal and adapted it to stand in as the UAE’s primary gateway.

That conversion came with a catch. Khorfakkan was built to move boxes from ship to ship, not ship to truck. Its original transshipment capacity was estimated at 5 mn TEUs, but its practical gateway capacity was closer to 3-3.5 mn TEUs, Hooper says. After Gulftainer rapidly built a landside gate complex, throughput rose from about 8k TEUs a week to 65k TEUs, marking a 700% increase and reaching the terminal’s current capacity limit. Capacity is expected to reach 5 mn TEUs by the end of the month, allowing weekly throughput of around 100k TEUs.

From sea-to-sea to sea-to-door

Belbouab says that resilience was designed in. In 2025, Gulftainer launched the UAE’s largest bonded dry port in Sajaa, 90 km from Khorfakkan. Cargo is sealed at the port and cleared at the customer’s doorstep in Sajaa. “This shifts Khorfakkan from a sea-to-sea hub to a sea-to-door gateway,” he says.

It has since added the Al Dhaid Multi-Modal Logistics Hub and Freezone, 60 km from the port. The 150-hectare site will have an annual capacity of 1.5 mn TEUs and is designed to tie Khorfakkan physically into the Etihad Rail network. It is being developed as a public-private partnership with the Sharjah Ports, Customs, and Freezones Authority.

The growth strategy, Belbouab says, is “10 mn+ TEUs at sea, supported by 2.3 mn TEUs of inland capacity across Sajaa and Al Dhaid, including 1.5 mn sqm of logistics park.” “Customers today don’t want just a plot; they want a bonded, AI-enabled corridor,” he adds. He points to the Khorfakkan-Sharjah road, the upcoming Etihad Rail link to Khorfakkan and Al Dhaid, and GT Lines’ 15-vessel fleet serving China, the Indian subcontinent, the GCC, Iraq, and East Africa. “Our trade corridors reflect our integrated platform — from ports to shipping, shipping to inland, and inland to industrial parks.”

Fujairah adds capacity, but Khorfakkan leads

Fujairah remains the UAE’s crude lifeline on the east coast. In recent months, it has become Adnoc’s primary shuttle transfer hub, letting buyers collect crude without sending tankers through Hormuz. The Adcop pipeline carries roughly 1.8 mn bbl / d to Fujairah and ran near peak nameplate capacity in the immediate aftermath of the war. Adnoc is also ramping up a second pipeline to Fujairah, targeted for 2027. The Port of Fujairah handles roughly 7.3 mn mt of marine fuel a year, placing it alongside Singapore and Rotterdam among the world’s top three bunkering hubs.

Containers are a different story: AD Ports pushed more than 70k TEUs through Fujairah Terminals in a matter of weeks in May, but the terminal was never built for that role. Its last major upgrade was a USD 135 mn (AED 500 mn) investment, announced in 2021, to lift container capacity to 1 mn TEUs. “Fujairah currently has limited capacity to handle a substantial volume of container cargo diverted from ports inside the strait,” Hooper says.

The big operators are moving to close that gap:

DP World has reached an “agreement in principle” with Fujairah Ports Authority to develop new container and multipurpose terminals at Al Rugaylat, plus a general cargo facility in Dibba. Al Rugaylat is designed for 2.5 mn TEUs, nearly three times the capacity of Fujairah’s existing container terminal;
AD Ports is wiring Fujairah into Abu Dhabi’s industrial base. Its rail-linked network of dry ports and cargo depots, announced in May, connects Fujairah Terminals and Khalifa Port to Kezad’s Industry City of Abu Dhabi, meaning industrial cargo can now land on the east coast and reach Kezad without transiting Hormuz. Emirates Global Aluminium, Emsteel, Al Ghurair Iron and Steel, and Tenaris have signed on as anchor clients.

Those projects point to Fujairah playing a much broader role in the UAE supply chain, Hooper says, “though for the container market it will be secondary to Khorfakkan.” Across the border, CMA CGM and Oman’s Asyad Group have signed a framework agreement for a USD 400 mn logistics terminal at Sohar, which has become an alternative route for Gulf trade during the war.

The economics: a longer road that still pays

Rerouting through the east coast is not cheap, but it is cheaper than the current alternative. Every box landed at Khorfakkan or Fujairah has to cross the Hajar mountains by truck, or eventually by rail, to reach Dubai, Abu Dhabi, and the UAE’s industrial centers. A Hormuz port call avoids that leg entirely, but a rise in breach-of-warranty premiums and war-risk surcharges beat the additional costs of overland rerouting — which, according to a study, reached 2.4- to 4.2-fold per ton-km.

Hooper says premiums are not even the main deterrent. “The majority of shipowners cannot risk their vessels getting stuck behind the strait, even if they could afford the war risk premiums being applied for both the hull and cargo,” he says. Until there is a resolution that the insurance market believes in and shipowners trust, Khorfakkan, Fujairah and Sohar will remain the primary maritime gateways for the UAE and northern Oman. That resolution looks distant, with Iran intensifying attacks on ships in recent days.

Hooper says rapid normalization and the removal of Hormuz from war-risk classifications would delay phases 2 and 3 of Khorfakkan’s terminal expansion; “otherwise, the masterplan is likely to proceed quickly to meet demand.”

Drewry’s verdict is that the east coast terminals and inland hubs “can be made to work” as the gateway for UAE and northern Oman consumption. They can also serve as a corridor transshipment platform for some Upper Gulf needs, “though certainly not all,” but only at a higher cost base and with some stress on existing rail and road infrastructure. Ports inside the strait will keep serving Upper Gulf trades, where Hooper expects them to stay cost-competitive against routings via Red Sea ports, which carry much longer overland legs.

Why Jebel Ali keeps its crown

Regional transshipment “won’t return to the Gulf in its pre-2026 form,” Hooper concludes. Jebel Ali “will be relegated to Gulf transhipment plus re-export, a materially smaller, though still substantial, market,” he says.

But the east coast cannot dethrone Jebel Ali: DP World’s Jebel Ali is a completely different weight class for container volume — handling roughly 14-15 mn TEUs annually, backed by a capacity exceeding 19 mn TEUs — tied directly into Jafza, which hosts over 10k businesses and accounts for nearly 36% of Dubai’s GDP. Jebel Ali “will still retain its preeminence in the region largely due to Jafza, the freezone, warehousing, industrial cluster, and cargo airport around Jebel Ali, which took four decades to build and cannot be easily replicated or relocated,” Hooper says.

That is the crux of the economics. A port earns a handling fee once per box. A freezone cluster earns rent, services and re-export margins from the businesses that own the cargo, year after year. The war can move the ships, but it cannot easily move 10k companies. Gulftainer’s answer to Jafza is Al Dhaid, but at 150 hectares, it is starting four decades behind. The more immediate trend is east coast ports plugging into the freezones that already exist. The inland logistics investments by Gulftainer, DP World, AD Ports, and CMA CGM “are geared toward moving cargo as efficiently as possible between the east coast ports and the existing logistics hubs at Jebel Ali and Khalifa,” he adds.

Turning three emirates’ worth of competing operators into one network will not happen by decree. “There is no substitute for competitive pressure and time to develop a cohesive logistics system among separate commercial organizations each working toward its own goals,” Hooper says. When it does take shape, he expects it to bend toward Dubai. “The Jafza logistics cluster should remain the preeminent force in the UAE, and I expect the network will be incentivized to arrange itself to prioritize Jafza’s customers’ needs.”

ADX-listed Agility sells its stake in Dubai’s Tristar to India’s Aegis

Agility Global is selling its entire 65.12% stake in Dubai-based energy logistics player Tristar to India’s Aegis Logistics — 23 years after buying it for about USD 7 mn. The transaction values Tristar at USD 1.5 bn including debt and puts its equity value at USD 882 mn. Abu Dhabi-listed Agility will get up to USD 581 mn for its full 65.12% stake, according to disclosure (pdf).

The money comes in three installments — Agility gets USD 425 mn at closing and USD 110 mn a year later, plus USD 46 mn more if agreed conditions are met. Aegis is also buying smaller stakes from Gulf Investment Corporation and Diamond Holdings, which takes its total to 89.8% of Tristar for USD 809 mn.

Why it matters: The agreement gives Aegis, which runs LPG and bulk liquid terminals in India, an international fuel network based in the Gulf. Tristar stores and moves petroleum, chemicals, aviation fuel, and LNG in more than 30 countries. It runs more than 1k trucks, 26 ocean-going and coastal vessels, and 14 tank farms, and it owns a majority stake in Aquarius Energy, a fuel storage JV with Glencore.

Agility expects more than USD 1 bn from a 23-year hold: Tristar was earning USD 13.5 mn in revenue when Agility bought it. Agility invested another USD 123 mn over the first seven years, including in strategic fuel storage. Last year, Tristar booked USD 1.4 bn in revenue and held USD 1.7 bn in assets. At the end of 1H 2026, it made up 27% of Agility’s revenue and 13% of its assets.

Agility expects the sale to cap a return of more than USD 1 bn on its fuel logistics investment, an internal rate of return of 16% over the holding period.

Some interests are excluded: Agility is retaining directly held interests in a strategic fuel storage asset consolidated within Tristar’s financial statements. It estimates their equity value at some USD 145 mn and plans a separate sale process, while expecting its broader fuel logistics investment to generate a return exceeding USD 1 bn and an internal rate of return of 16% over the 23-year holding period.

The exit has been in the making: Agility confirmed in August this year that it was discussing a potential Tristar sale with interested parties, according to a disclosure (pdf). The agreement with Aegis marks what Agility describes as its second major strategic exit, following the 2021 sale of its Global Integrated Logistics business to DSV.

REMEMBER- Tristar scrapped its planned Dubai IPO in April 2021, having offered up to 24% of its shares at an implied valuation of USD 719-882 mn. The company said shareholders’ expectations had not been met, while sources told Reuters investor demand was weak.

What’s next: The agreement is expected to close in March, and Agility will run a separate sale process for the fuel storage interests it is keeping.

Tokenizing water, wrapping up CEPA talks with Thailand, powering up Constanța

Tokenizing… water

Dubai is getting a tokenized water market: Water management firm AquaIndex is partnering with the Dubai Multi Commodities Center (DMCC) to launch a platform for trading tokenized water, with a go-live targeted for 4Q 2026. The initial pool will include up to 11 bn barrels drawn from a regulated US aquifer and valued at c. USD 5 bn, or about USD 0.45 a barrel.

How it works: Each token is a blockchain-recorded receipt for a set volume of water held at a certified reservoir. Holders can sell on the platform or swap the token for physical water at designated stations, AquaIndex explains.

Add it to the list: The UAE has become a testing ground for putting real-world assets on the blockchain, with tokenization already reaching into real estate, shipping, film, and a growing roster of other assets. Water is a newer frontier and one that plays to DMCC’s pitch as a hub for commodities trading.

Thailand, UAE wrap CEPA talks

The UAE and Thailand wrapped talks on a Comprehensive Economic Partnership Agreement (CEPA), according to a statement carried by state news agency Wam. The agreement — which is not yet ratified — will prioritize advanced manufacturing, logistics, food security, digital trade, renewable energy, and precious metals.

Trade is already moving fast: Non-oil trade between the two countries hit USD 12.3 bn in 2025, up 65.2% y-o-y, and reached USD 10.2 bn in 1H 2026 alone, up 75.4% y-o-y. That puts this year on track to comfortably beat last year’s total. UAE non-oil exports to Thailand climbed to USD 4.5 bn last year on the back of gold, aluminum, and other industrial goods, while imports from Thailand came in at USD 7.2 bn.

Where it’s been: The two sides inked a preliminary agreement to launch CEPA talks back in May 2023, with the first round held in the UAE that same month.

Powering up Constanța

DP World launched a EUR 53.8 mn (c. USD 60.2 mn) project to electrify its Constanța South Container Terminal in Romania, with completion scheduled for August 2028, according to a press release. The project will wire 29 container-yard blocks for electric gantry cranes, add a charging hub with 10 charging points and 10 electric terminal tractors, and install two shore-power systems enabling docked vessels to draw renewable electricity instead of running their auxiliary engines.

REMEMBER- The project is part of a EUR 100 mn electrification program that DP World secured financing for in July. The newly launched infrastructure component is backed by an EU grant of up to EUR 19.7 mn and an EBRD loan of up to EUR 25 mn, with DP World covering the rest. A further EUR 46.2 mn is earmarked for electric cargo-handling equipment. DP World also inaugurated EUR 130 mn in Romanian port and logistics investments in 2024.

IMF flags AI leverage, bond yields, and cyber attacks as threats to market calm

Strong earnings and heavy AI spending have kept markets buoyant, but the IMF says the calm could break. Three shocks — an AI-driven correction, a spike in bond yields, or a cyberattack — could sharply tighten global financial conditions, the fund warns in its Global Financial Stability Report (pdf). Inflation from the Middle East energy shock has already pushed 14 of 33 major central banks to raise rates since 2Q, up from two in 1Q, though the moves were modest.

AI is the fund’s primary concern, and leverage is what makes it dangerous. Hyperscalers now account for 10% of global investment-grade bond issuance, up from less than 1% in 2024.

The share of single stocks in leveraged ETFs has risen to 28% from 16% since 2024. Fourteen circular deals have channeled around USD 300 bn of equity and USD 650 bn of debt into weaker AI firms in exchange for USD 1.4 tn in future revenue commitments. If a firm on the receiving end runs into trouble, both sides are exposed at once — a bind the fund calls “wrong-way risk.” Advanced Asian equity markets are the most sensitive to global AI returns, while Europe, the UK, and most emerging markets look better insulated. That insulation is only partial, however, as many have loaded up on US equities since 2022, mainly hyperscalers and other AI names.

Bond yields are climbing on both higher expected rates and fatter term premiums, with the surge in AI-related debt issuance blamed for crowding out government paper. Hedge funds have partly unwound their sovereign bond basis trades without setting off market turmoil, though enough leverage remains for a messy exit. Liquidity is holding up in the US, Europe and the UK, and continues to thin in Japan.

Cyber is the third threat, and AI is on both sides of it. Advanced models can run simulated network attacks, and they are also a key line of defense. In more than 70% of cases in 2026, vendors had almost no time to issue fixes before flaws were exploited, up 20 percentage points on a year earlier. The IMF wants regulators to put the continuity of critical services first, alongside incident reporting and oversight of providers.

Pension funds and insurers are among the financial system’s softer points. Their illiquid holdings have nearly doubled as a share of their portfolios over the past decade, even as the two groups hold over a quarter of corporate bonds in the US and Europe. Private credit is another spot where the fund sees the system thinning, with direct lending growing to nearly USD 2 tn as borrowers take on more debt. Of 10 large business development companies, four, with around USD 90 bn in assets, have lending commitments that run past their liquidity buffers.

Emerging markets are drawing down their foreign exchange reserves, which have fallen most sharply among lower-rated sovereigns. Risk premiums have slid back to low levels, while frontier economies have expanded their access to international markets. The fund sees that mix as a warning sign: Tight risk premiums alongside 10-year US Treasury yields above 4.5% was last seen in 2007. Opaque funding tools such as sovereign total return swaps could also set off margin calls when markets come under stress.

The IMF’s prescription is to build resilience while there’s still room to. It wants limits on margin lending, leveraged ETFs and short-dated options, capital charges on AI-related exposures, credible plans to shrink budget deficits, and wider central clearing of bonds and repos. Regulators should finish putting Basel III in place and keep watch on the ties between banks and non-banks. Emerging markets, meanwhile, need to rebuild their buffers and disclose hidden borrowing.

MARKETS THIS MORNING-

Asian markets were in the red earlier today. Japan’s Nikkei was down 3.9% and South Korea’s Kospi was down around 7%. The performance tracked overnight losses across Wall Street.

ADX	9.834	+0.4% (YTD: -1.6%)
DFM	5,893	+0.6% (YTD: -2.6%)
Nasdaq Dubai UAE20	4,838	+1.0% (YTD: +1.0%)
USD : AED CBUAE	Buy 3.67	Sell 3.67
EIBOR	3.5% o/n	4.9% 1 yr
TASI	10,139	-1.7% (YTD: -3.4%)
EGX30	51,493	+0.4% (YTD: +23.1%)
S&P 500	7,719	-1.1% (YTD: +12.8%)
FTSE 100	10,725	+0.7% (YTD: +8.0%)
Euro Stoxx 50	6,190	+0.4% (YTD: +6.8%)
Brent crude	USD 105.79	-0.3%
Natural gas (Nymex)	USD 3.29	+2.9%
Gold	USD 4,134	+0.6%
BTC	USD 81,563	-1.9% (YTD: -6.9%)
Lunate JP Morgan UAE Bond UCITS ETF	AED 3.55	+1.4% (YTD: -2.0%)
S&P MENA Bond & Sukuk	147.35	+0.1% (YTD: -3.0%)
VIX (Volatility Index)	16.87	+10.5% (YTD: +12.8%)

THE CLOSING BELL-

The ADX rose 0.4% yesterday on turnover of AED 1 bn. The index is down 1.6% YTD.

In the green: Abu Dhabi National Hotels Co. (+3.2%), Abu Dhabi Islamic Bank (+2.5%), and Americana Restaurants International (+2.1%).

In the red: Hayah Ins. Company (-4.9%), Gulf Cement Co. (-3.6%), and Invest Bank (-3.6%).

Over on the DFM, the index rose 0.6% on turnover of AED 491.1 mn. Meanwhile, Nasdaq Dubai was up 1.0%.

CORPORATE ACTIONS

Dubai-based construction firm Alec Holdings’ board approved distributing AED 100 mn in dividends for 1H 2026, according to a disclosure (pdf). The board set the last entitlement date as 22 October, with payments due on 29 October.

CALENDAR

OCTOBER

14-15 October (Wednesday-Thursday): Sharjah Investment Forum, Jawaher Reception and Convention Center, Sharjah.

13-15 October (Tuesday-Thursday): Annual Meeting of Global Future Leaders, Dubai.

20-22 October (Tuesday-Thursday): Future Health Summit, Adnec Center Abu Dhabi.

27-28 October (Tuesday-Wednesday): Arab Competition Forum, Dubai.

27-28 October (Tuesday-Wednesday): Federal Open Market Committee (FOMC) meeting.

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

2-5 November (Monday-Thursday): Adipec, Adnec Center, Abu Dhabi.

2-6 November (Monday-Friday): Dubai Future Finance Week, Dubai.

4 November (Wednesday): Digital Transformation Summit, Sofitel, Abu Dhabi.

4-16 November (Wednesday-Monday): ADIB rights trading period.

9-10 November (Monday-Tuesday): Annual government meetings, Abu Dhabi.

9-12 November (Monday-Thursday): EMEA Council on Hotel, Restaurant and Institutional Education Conference, Dubai College of Tourism, Dubai.

9-13 November (Monday-Friday): World Congress of Military Med, Adnec Center, Abu Dhabi.

10-12 November (Tuesday-Thursday): Dubai International Electric Vehicle Exhibition & Conference, Dubai World Trade Center.

10-24 November (Tuesday-Tuesday): ADIB rights issue subscription period.

16-18 November (Monday-Wednesday): World Police Summit, Dubai World Trade Center, Dubai.

18-19 November (Wednesday-Thursday): Touchdown Middle East 2026, Conrad Abu Dhabi Etihad Towers, Abu Dhabi.

25-26 November (Saturday-Sunday): Doers Summit, Dubai Silicon Oasis, 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.

8-9 December (Tuesday-Wednesday): Federal Open Market Committee (FOMC) meeting.

7-10 December (Monday-Thursday): Abu Dhabi Finance Week, Al Maryah Island, Abu Dhabi.

8-10 December (Tuesday-Thursday): Abu Dhabi Water & Power Week, Adnec Center, Abu Dhabi.

8-10 December (Tuesday-Thursday): Middle East & North Africa Business Aviation Association Show, DWC, Dubai Airshow Site.

Signposted to happen sometime in 2027:

1 January: Deadline for large businesses to implement e-invoicing;
14-17 January (Thursday-Sunday): MOC27 Motor, Outdoor & Camping Festival, Dubai Sevens Stadium, Dubai.
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;
31 May-2 June (Monday-Wednesday): RailX Dubai, Dubai World Trade Center, Dubai.
1 July: Deadline for small businesses to implement e-invoicing;
1 October: Deadline for governments to implement e-invoicing;
November: HR Tech, Abu Dhabi.
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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