Adia makes a play for Malaysia Airports, while Mubadala closes Fortress acquisition

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Adnoc Drilling plans three acquisitions before 3Q 2024 + what’s happening to oil demand in 2024?

Good morning, lovely people, and welcome to the busiest issue we’ve had in a long time.

We have major updates on several M&A stories, including the closing of Mubadala’s acquisition of a 58% stake of US asset manager Fortress, following a year-long probe, and Abu Dhabi Investment Authority’s play for a stake in Malaysia Airports, which it is helping Malaysian investors privatize.

It’s also a busy day for investment news, with Tecom approving an AED 1.7 bn acquisition and development plan to boost office and industrial space in Dubai, Shorooq Partners launching its second venture debt fund, and DP World inaugurating USD 130 mn in investments in Romania.

WATCH THIS SPACE-

#1- The three acquisitions Adnoc Drilling is working on could be completed in 2Q 2024 or early 3Q, Adnoc Drilling CFO Youssef Salem confirmed to EnterpriseAM UAE. The company is focusing its expansion efforts on Europe and the US, he said, adding that some USD 750 mn of the USD 1.5 bn allocated towards its JV with Alpha Dhabi will be used for the acquisitions.

REMEMBER- We reported earlier that the company plans to acquire three tech firms through its tech venture with Alpha Dhabi this year. It’s also eyeing acquisitions of drilling firms to expand its foothold in neighboring countries such as Kuwait and Oman, Salem revealed.

ICYMI- Adnoc Drilling has already formed a USD 1.5 bn JV with Alpha Dhabi in January for global investments in energy technology and the enhancement of tech-enabled energy services. Adnoc Drilling holds a 51% majority share in the JV, with Alpha Dhabi owning the remaining 49%.

#2- Masdar makes progress on USD 11 bn wind project in Egypt: The Egyptian government inked a land access agreement with Masdar, Infinity Power, and Hassan Allam Utilities for their USD 11 bn 10 GW wind farm project in Sohag, according to a joint statement (pdf) released yesterday. The windfarm is expected to produce 47.7k GWh of clean energy every year, reducing natural gas consumption in Egypt. The plant is estimated to offset nearly 24 mn tons of CO2 emissions each year.

What’s next: The consortium in charge of the project will now be able conduct surveys and studies needed before beginning construction.

#3- China-Gulf trade agreement in jeopardy? Trade talks between the Gulf Cooperation Council (GCC) and China are hitting a wall as Saudi Arabia remains concerned that low-cost Chinese products could hinder its efforts to boost domestic manufacturing and become an industrial powerhouse, Reuters reports, citing sources it says are in the know. The agreement is not yet entirely off the table, but will require compromises from both sides of the table to move forward, the sources said.

The last stretch is proving the hardest: Chinese officials said earlier this year that while talks were “90%” of the way there, a number of difficult issues were still on the table. Trade talks first began 20 years ago but lapsed without a conclusion.

HAPPENING TODAY-

#1- The Airport Show is on its final day todayat the Dubai World Trade Center. The event brings together airport suppliers, airport service providers, aviation executives, and regional decision makers to explore current innovations and new technologies.

#2- Seamless Middle East is also on its final day at theDubai World Trade Center. The three-day event includes a conference welcoming over 500 speakers to cover the latest trends, market disruptors, and technologies in digital commerce, and a multi-brand exhibition hosting over 700 exhibitors in the digital commerce industry.

#3- The Gulf Petrochemicals and Chemicals Association Supply ChainConference wraps today at the Address Sky View Hotel in Dubai. The conference will bring together industry players under the theme Harnessing Connectivity for a Sustainable Tomorrow, discussing supply chain connectivity and AI integration in the industry.

#4- Critical Communications World 2024 is on its final day todayat the Dubai World Trade Center. The three-day event welcomed 150 guests and representatives from leading companies under the theme Securing Society and Industry — Connection is the Lifeline, discussing emerging technologies in telecommunications, public safety, and city services.

THE BIG STORY ABROAD-

Driving the conversation in the global business press this morning: Major Wall Street benchmarks hit a fresh high yesterday as traders welcomed promising US inflation data. We have the story in this morning’s Planet Finance, below.

MEANWHILE, IN GAZA- Israel has started sending troops into Rafah in what Bloomberg believes is the beginning of a “full-blow invasion.” The Israeli military has given advance warnings to Rafah citizens as tanks and infantry make their way into the eastern part of the city bordering Egypt. The move is visibly ramping up tensions with Egypt, the European Union, and the United States.

AN ARAB ROLE IN POST-WAR GAZA? The Biden administration is in talks with Egypt, the UAE, and Morocco about their potential participation in a “peacekeeping force” that would deploy in Gaza following the war, the Financial Times writes. The three Arab nations are considering the initiative but “they would want the US to recognise a Palestinian state first,” a western official told the salmon-colored paper. Saudi Arabia has straight up rejected the idea all together.

ELSEWHERE IN GLOBAL POLITICS- You’re going to be hearing a lot about Russia-China ties in the next couple of days. Vladimir Putin is in Beijing today and tomorrow to meet Xi Jinping. The Financial Times worries in its Big Read that Moscow and Beijing represent “an economic ‘friendship’ that could rattle the world.”

PLUS- A handful of stories in global politics about which you should know:

US presidential debate: Donald Trump and Joe Biden will debate in June and September ;
Slovak PM shot: An assassin shot the Russia-friendly prime minister of Slovakia, who is now “fighting for his life” after a three-hour surgery;
Another top OpenAI official has quit.

OIL WATCH- The International Energy Agency lowered its forecast for oil demand. It now sees global demand rising by 1.1 mn bpd in 2024 — 140k bpd less than last month’s projections — pointing to weaker demand particularly in Europe. This stands in stark contrast to OPEC’s forecast (pdf) that oil demand will rise by 2.25 mn bpd in 2024.

SPEAKING OF OIL- Opec’s forecast for strong global oil demand in 2024 remain “broadly unchanged,” it said in its monthly report (pdf), saying it expects oil demand to grow by 2.25 mn barrels per day (bbl / d) this year and 1.85 mn bbl / d next year. This is the last report to be released by the Vienna-based group before OPEC+ meets on 1 June to decide on whether to extend voluntary oil cuts into the second half of the year.

The calculus for forecasting world demand on crude is changing a little: Opec said it will scrap a previous approach to calculating the world’s demand of its own crude, and will instead use forecasts on “demand for DoC crude” in reference to the OPEC+ framework. The move “not only demonstrates solidarity and unity…but also helps eliminate the potential for misunderstanding and/or misinterpretations.” An OPEC+ source told Reuters last week that OPEC+ demand was more relevant since its framework was the main forum for cooperation on the oil market.

AND- The UAE is among several countries hoping to get the Opec+ coalition to revise its supply cuts strategy it meets on 1 June, Bloomberg reports, citing people familiar with the matter. “The UAE is very keen to raise production sooner and is arguably much better prepared to live with lower oil prices,” James Swanston, Middle East and North Africa economist at Capital Economics, said. The country is angling to raise output in 2025, alongside Iraq, Kazakhstan, Kuwait, and Algeria.

Pundits are concerned that the difference in opinion among Opec members could potentially result in a rift reminiscent of last year’s, which culminated in Angola’s exit.

ICYMI- The Abu Dhabi National Oil Company (Adnoc) raised its crude oil production capacity to 4.85 mn barrels per day (bbl / d) from 4.65 mn bbl/d earlier this month. The hike brings Adnoc closer to its target to boost its crude oil production capacity to reach 5 mn bbl/d by 2027.

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Adia eyes a piece of Malaysian airport operator as Malaysian investors look to take it private

The Abu Dhabi Investment Authority (ADIA) has offered to buy out 67% of MalaysiaAirports Holdings Berhad as part of a consortium with Malaysian sovereign wealth fund Khazanah Nasional Berhad, Malaysian pension fund Employees Provident Fund, and Global Infrastructure Partners, according to a GIP statement. Malaysia Airports manages most of the airports in Malaysia.

The details: The offer on the table includes paying MYR 11 (USD 2.34) per share, representing a 15% premium over Malaysia Airports’ three-month volume-weighted average price and valuing it at USD 3.9 bn, according to the statement.

Who owns what now…? The consortium collectively owns 41.1% of the operator at present, with Khazanah being its biggest shareholder, with a stake of about 33%, while EPF holds an almost 8% stake, according to data compiled by Bloomberg.

…and who will own what later? Upon the transaction’s completion, the two Malaysian investors will collectively own 70% of MAHB, with Adia and GIP holding the remaining 30%.

Why take Malaysia Airports private? The consortium aims to pursue “sustainable, long-term growth” for the company, which the consortium says will be best achieved when the company goes private. The Khazana-led consortium aims to boost Malaysia Airports’ profitability, upgrade airport infrastructure, enhance passenger service levels and improve airline connectivity, the statement said.

The timeline: If Malaysia Airports accepts the offer, the transaction will be completed in 4Q 2024, according to the statement.

OTHER ADIA NEWS-

Adia backs India’s Go Digit ahead of IPO: The Abu Dhabi Investment Authority (ADIA) signed on as an anchor backer in Indian ins. startup Go Digit’s IPO, which debuted on India’s local bourse yesterday, TechCrunch reports. The startup raised USD 141 mn from its IPO, with Fidelity, Goldman Sachs, Morgan Stanley, and HSBC also acting as anchor investors.

About Go Digit: Founded by former KPMG executive Kamesh Goyal, Go Digit offers auto, health, travel, and accidental ins. to some 43 mn customers, and aims to streamline ins. processes through mobile self-inspection, claims submission, and service requests. The firm seeks to raise USD 313 mn from its public debut, targeting a valuation of approximately USD 3 bn, 25% lower than its last private valuation of USD 4 bn.

ADIA ❤️ India investments: The Abu Dhabi sovereign wealth fund earlier this week reportedly submitted a non-binding bid for a 75% majority stake in Indian restaurant company Haldiram ’s snacks business, with the potential agreement valuing the company at up to USD 8.5 bn. The bid was made via a consortium led by US alternative investment management firm Blackstone that also includes Singaporean sovereign wealth fund GIC.

Mubadala now owns 68% of US asset manager Fortress

Mubadala now owns a majority stake in US asset manager Fortress Management: Mubadala Capital and Fortress Investment Group have completed the acquisition of 90.01% of Fortress Management’s’ shares previously held by Japanese SoftBank Group, according to a statement.

Remember: The Committee on Foreign Investment in the United States (Cfius) granted approval for Mubadala Capital to acquire a 70% majority stake in US asset manager Fortress earlier this week, after the investor agreed to concessions regarding data security and operational control.

Concessions? The Financial Times had previously reported that Cfius was scrutinizing the transaction last July, amid concerns over the UAE’s ties to China. The concessions involved ensuring that Fortress’ data and technology will remain inside the US, and that day-to-day management will be in the hands of Fortress management. This means Fortress retains “full autonomy over investment processes and decision making, personnel and operations,” it said in the statement.

It’s not just Mubadala: State AI group G42 had offloaded all its stakes in Chinese businesses in a bid to appease US partners, including a USD 100 mn stake in TikTok parent company ByteDance. The company was also prepared to give up use of Huawei equipment. These moves made way for a USD 1.5 bn investment from Microsoft in April.

Ownership breakdown: Fortress management now controls 32% of the company's equity, allowing them to appoint a majority of board seats. Mubadala Capital leads the consortium owning the remaining 68%, with Hani Barhoush, CEO of Mubadala Capital, retaining his board position.

The acquisition has been a long time coming: Mubadala and Fortress’ management had agreed to buy a 90% stake from Fortress’ parent company, Japanese tech conglomerate SoftBank, in May 2023.

ADVISORS- Ardea Partners acted as Mubadala’s financial advisor and Shearman & Sterling (now A&O Shearman) served as legal counsel. Goldman Sachs served as financial advisor and Kirkland & Ellis served as legal counsel to Fortress senior management. Skadden, Arps, Slate, Meagher & Flom represented Fortress in the transaction. The Raine Group was SoftBank’s financial advisor while Morrison Foerster provided legal counsel.

Tecom earmarks AED 1.7 bn to expand office and industrial space

Tecom Group greenlights AED 1.7 bn investment plan: Business district developer Tecom Group approved yesterday an AED 1.7 bn strategic acquisition and development plan, it said in a DFM disclosure (pdf). The plan will see Tecom invest AED 966 mn to acquire commercial and industrial assets from Dubai Holding Asset Management, and earmark AED 689 mn to develop Grade A offices in Dubai Design District (d3), slated for handover in 2028.

The breakdown of office space and industrial land acquired from Dubai Holding Asset Management:

The AED 420 mn acquisition of two Grade A office buildings in Dubai Internet City;
The AED 410 mn purchase of 13.9 mn sqft of “strategically located, well-connected” industrial land plots via Tecom subsidiary Dubai Industrial City;
The AED 136 mn acquisition of 629k sqft gross floor area (GFA) within d3’s Design Quarter — a mixed-use development located in phase 2 of the creative district — via its subsidiary Dubai Design District.

The rationale: The move comes on the back of robust demand for office spaces and industrial assets in Dubai, with occupancy levels at 93% in 4Q 2023 (We have more on demand in both sectors of the property market in our Real Estate section, below). Tecom’s business districts saw an average occupancy rate of 91% in 1Q 2024, with d3 at 98%.

Tecom plans to leverage its “healthy cash profile” to fund its strategy, after posting a 15% y-o-y rise in net income to AED 293 mn in 1Q 2024, and a 10% y-o-y top-line improvement to AED 564 mn. The group also has the option to draw up to AED 3.2 bn from an existing revolving credit facility refinanced in 2023, it said in the disclosure.

Expected financial impact: Tecom forecasts immediate improved earnings from the two fully leased operating office assets in Dubai Internet City. The remaining acquisitions are also expected to improve revenue by attracting new customers.

OTHER INVESTMENT NEWS-

DP World has inaugurated EUR 130 mn in investments at three sites in Romania, according to a press release. The upgrades are expected to boost cargo volumes by some 2 mn tonnes a year, strengthening trade links between the Black, North, and Adriatic seas, and mainland Europe. The move will also exploit synergies with DP World’s in-place network of maritime, rail, barge, and trucking services, the statement said.

The breakdown:

EUR 65 mn went towards two new facilities at Romania’s Constanta port — the largest container port on the Black Sea — including a 5-hectare cargo terminal catering to heavy, large, and complex cargo, and a roll on/roll (RoRo) off terminal;
Another EUR 50 mn investment went towards a new multi-transport platform at Constanta that is slated to open next year;
Some EUR 21 mn is allocated to an 8-hectare intermodal logistics hub in Aiud, providing links between road and rail routes that are in close proximity to Romania’s industrial hub.

Prices are still on the rise in the real estate sector amid heightened demand

The property boom has yet to cool off: Sales and rental prices in Dubai continued to rise in 1Q 2024, while seeing slower growth in Abu Dhabi, according to JLL’s latest UAE real estate market overview report (pdf).

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THE RESIDENTIAL MARKET-

Units got more expensive: Sale prices and rentals in Dubai each increased 21% y-o-y during the quarter. Abu Dhabi experienced less inflated price hikes, with sales prices increasing by 7% y-o-y, and rental rates by 4% y-o-y. Apartment rentals and sales prices for villas both surged 22% y-o-y, indicating robust demand for both types of properties.

Both emirates rolled out new units in 1Q 2024: Dubai saw 10k new units introduced in 1Q 2024, bringing its total stock to 729k units, while Abu Dhabi raised its stock count to 286k units on the back of 1.6k new units completed during the quarter. Another 25k are slated for handover in Dubai, while 6k units will be handed over in Abu Dhabi, by the end of the year, with rising land prices and construction costs edging developers towards secondary locations, the report adds.

We’re going to see more houses in the AED 2 mn range: Developers will begin to target properties within the AED 2 mn range in a bid to enable buyers to meet the threshold for eligibility for golden visa requirements in the UAE.

The two emirates saw transaction volumes increase, with Dubai seeing transactions rise 20% y-o-y and Abu Dhabi seeing a 17% y-o-y increase. Dubai also saw a 16% y-o-y rise in transaction value, while Abu Dhabi saw a 1% y-o-y drop, as apartment transactions outpaced those of villas and townhouses.

THE OFFICE MARKET-

Dubai upped workplace offerings in 1Q 2024, with some 17k sqm of new office space added, raising its stock to over 9.2 mn sqm. The emirate expects to see an additional 38k sqm of space go online in 2024 on the back of continued demand, with office vacancies in Dubai’s Central Business District (CBD) falling three percentage points to 8% during the period.

Rentals were also on the rise: Grade A rents in Dubai’s central business district increased by 22% y-o-y to AED 2.6k per sqm.

Abu Dhabi’s office supply remained stable at 3.94 mn sqm, though it has some 79k sqm scheduled for delivery by the end of the year. City-wide office vacancy rates stood at 22% during the quarter, while Grade A rents inflated by 14% y-o-y to a little over AED 2.k per sqm per year.

RETAIL AND HOSPITALITY-

Dubai’s retail sector also expanded: The emirate completed 12k sqm of retail gross leasable area (GLA) during the quarter — keeping total stock at 4.8 mn sqm — and expects to deliver 104k sqm of new retail space by the end of the year, focusing on smaller community malls as local brands look for alternatives amid limited space in prime super-regional malls. Abu Dhabi held retail stock still at some 3.2 mn sqm, but has 17k sqm of retail GLA in its pipeline within the year. City-wide vacancy dropped to 12% in Dubai and 21% in neighboring Abu Dhabi.

Dubai added nearly 2k new keys to its hospitality segment in 1Q 2024, bringing its total key count to 155k, while Abu Dhabi maintained supply at 32.5k keys. New hotel openings in Dubai primarily consisted of five-star launches in Business Bay, Za’abeel, and Port Saeed, and were driven by heightened tourism, with the emirate welcoming 3.67 mn visitors in 1Q, up 18% y-o-y. Dubai plans to introduce an additional 5k keys in 2024, while Abu Dhabi will roll out 500 keys during the same period.

Hospitality became slightly more profitable: Revenue per available room (RevPAR) in Dubai increased by 5% y-o-y to USD 185, on the back of a similar 5% y-o-y increase in average daily rates. In Abu Dhabi, RevPAR jumped by 17% y-o-y to USD 130, with daily rates increasing by 8% y-o-y. City-wide occupancy was down one percentage point from the same period last year at 82% in Dubai at the end of March, and stood at 81% in Abu Dhabi.

THE INDUSTRIAL MARKET-

Demand > supply in Dubai: Dubai saw robust demand against available supply, which spiked rental rates by 26% y-o-y in Jebel Ali Freezone (Jafza) to AED 365 per sqm annually, and by 5-7% y-o-y in older areas, such as Umm Ramool, Ras al Khor, and Al Qusais. JAFZA saw a notable 28% y-o-y increase in new Indian businesses during the quarter — a knock on effect of the trade agreement inked between India and the UAE in 2022.

Abu Dhabi also saw heightened demand for office space, partially owing to a spillover demand from Dubai due to the limited availability of vacant Grade A spaces. Musaffah posted the highest rent growth during 1Q, up 25% y-o-y, followed by a 6% y-o-y increase in the Industrial City of Abu Dhabi, and a 5% y-o-y increase in Kezad.

Plans to add more space: Jafza plans to welcome a 100k+ sqm Bharat Mart warehouse in 2026 to promote Indian exports, and open a digital marketplace to enable global purchases. Dubai South and Aldar also kick-started a joint venture to develop a 24k sqm GFA Grade A logistics facility in Dubai South’s Logistics District, targeted for completion by the year’s end. Over in Abu Dhabi, Kezad plans to invest AED 621 mn to expand warehousing capacity by over 250k sqm by 4Q 2025.

Shorooq Partners launches USD 100 mn venture debt fund

Tech investor Shorooq Partners has launched its second USD 100 mn venture debt fund, Nahda Fund II, Shorooq Partners Founding Partner Mahmoud Adi told Asharq Business (watch, runtime, 6:31). The firm launched the second venture debt fund as a follow-up to Nahda Fund, which debuted in 2021, to address growing demand for financing for tech firms.

SOUNT SMART- What’s venture debt? Firms offering venture debt are effectively competing with banks. Why work with one, then? Venture debt providers have — by definition — higher risk appetite. They may charge more, but they’re also a lot more likely to understand and extend finance to a startup than many traditional lenders.

About Nahda II: With the first funding round for Nahda II already closed, the fund aims to deploy the USD 100 mn raised capital in early-stage, high-growth startups and enterprises in the Saudi and UAE markets. Nahda will focus on tech firms with top line profitability and fast growth, which demonstrate the ability to pay back the venture debt.

Shorooq Partners is currently in talks to invest in two fintech startups through the fund, Adi said, adding that fintech is best suited for venture debt, due to the nature of their business model — which ensures quarterly dividends between 12-15% for the fund’s investors — and opportunities for investors to acquire stakes in the companies through warrants.

Nahda I’s portfolio: Since its launch, the fund has invested in two startups in the region, Adi said. The fund participated in a funding round for Pure Harvest Smart Farms through a USD 50 mn green sukuk issuance. Nahda I also provided USD 50 mn in mezzanine finance to Saudi BNPL platform Tamara in November 2023. The Shorooq fund was joined at the time by Goldman Sachs, which arranged USD 200 mn in senior debt for Tamara.

About 45% of the venture debt has been repaid to the fund’s investors over 12 quarters since the fund’s launch. Investors have also received dividend payouts ranging between 12-14%. As a shareholder in some of the companies it funded, Nahda anticipates returns double the initially invested capital in the coming years.

Tabreed is set to issue USD 1.2 bn green bonds next year

Tabreed to issue USD 1.2 bn in green sukuk next year: District cooling firm Tabreed is set to issue green bonds or sukuk to refinance USD 1.2 bn in debt in 2025, Tabreed CFO Adel Salem Al Wahedi told Asharq Business (watch, runtime: 6:40).

The details: The funds collected from the planned green sukuk issuance will be used to pay off USD 500 mn in bonds issued in 2018, due to mature in October 2025, Al Wahedi said. They will also be used to pay back a USD 700 mn loan obtained in September 2020, scheduled to be settled in March 2025, to finance the purchase of a 80% stake in Emaar Properties’ Downtown Dubai district cooling business back in March 2020.

The company is looking to expand in existing markets, and enter new ones: Tabreed is considering expanding into the Indian market in partnership with India’s real estate giant Tata Realty — a wholly-owned subsidiary of Tata Sons, Al Wahedi said. Tabreed is currently working on hedging against India’s rising inflation and the fluctuation of its currency in preparation for entering the market. The firm is also looking to expand in other countries where it operates, including Saudi Arabia, the UAE, Bahrain, and Oman, and is studying new markets such as Jordan, Indonesia, Thailand, and Vietnam.

Egypt remains a promising market for the company “if the local currency continues to stabilize,” according to the CFO, who added that the firm’s exit from the CapitalMed project in Egypt did not affect the company’s financial results. The exit came due to a lack of a “business case” amid FX instability in the country, with CapitalMed’s investments planned in USD and the returns from the project expected to come in EGP.

Taqa, Deyaar, and more companies post 1Q earnings

TAQA-

Abu Dhabi National Energy Company’s (Taqa) net income fell 81.5% y-o-y to AED 2.14 bn in 1Q 2024, on the back of “one-off items recognised in 2023,” according to the company’s consolidated financial statements (pdf) and a separate earnings release (pdf). Excluding the one-offs, net income rose 6.9% y-o-y. Revenues stood at AED 13.68 bn, up 5.3% y-o-y on the back of contributions from the Sustainable Water Solutions Holding Company (SWS Holding), which it acquired in June 2023.

Taqa worked to expand its global footprint during 1Q: “We joined forces with industry leaders Jera, Satorp (a joint venture company owned by Saudi Aramco and TotalEnergies), committing to the development of a state-of-the-art power and steam cogeneration plant in Jubail, Saudi Arabia as well as being part of the consortium that won the Juranah project, to support water security in Makkah,” said Taqa CEO Jasim Husain Thabet.

DEYAAR DEVELOPMENT-

Dubai’s Deyaar Development recorded a 29.5% y-o-y increase in net income after tax to AED 73 mn in 1Q 2024, according to its unaudited financial statements (pdf). Without the impact of the corporate tax, net income reached AED 77.5 mn. The real estate developer and service provider’s total revenue reached AED 327.8 mn, up 4.9% y-o-y.

The rise in earnings can be credited to a surge in “new projects launched in key locations and significant progress on existing projects,” according to a separate earnings release (pdf). The company documented two new developments during the quarter — including Rosalia Residences, its third development in Dubai’s Al Furjan community out of a total project portfolio worth AED 300 mn — and announced a new passenger terminal at Al Maktoum International Airport.

REMEMBER- In real estate, sales ≠ revenues. Real estate companies rely heavily on off-plan sales, recording sales upon contract signing but recognizing unit value only upon delivery or project completion. This practice results in revenues primarily comprising past sales, with current quarter sales reflected as future revenues upon unit handover.

Dividends: The company approved distributing AED 175 mn in dividends, equivalent to 4 fils per share, marking its first ever dividend payout.

AGTHIA-

ADQ-owned F&B firm Agthia Group’s net income rose 32% y-o-y to AED 127.6 mn in 1Q 2024, according to its earnings release (pdf). The company booked AED 1.45 bn in revenues, up 22.6% y-o-y.

Agthia’s growth came from various business segments, including 17.7% y-o-y growth in the company’s snacking portfolio, 3.5% growth in water and food, as well as 50.6% growth in agri-business, according to the statement.

UNION PROPERTIES-

Dubai-based Union Properties’ net income rose 25% y-o-y in 1Q 2024 to AED 16.5 mn, according to the developer’s financial statements (pdf).The developer logged AED 138.1 mn in revenues from customer contracts during the period, marking a 13% y-o-y increase compared to the previous year.

ICYMI- The Motor City developer settled its debt in February with Dubailand and Emirates NBD, securing a no-objection certificate from Dubailand to repurpose Motor City land for new projects and reaching a debt settlement of AED 850 mn with Emirates NBD. This move comes as part of Union Properties' efforts to revitalize its projects and manage its debt following the 2009 property market correction in Dubai.

SALAMA INS.-

Ins. provider Salama’s net income more than doubled to AED 17.6 mn in 1Q 2024, surging 118% y-o-y, according to its earnings release (pdf). The company booked AED 271.5 mn in Takaful revenues, inching up 2% y-o-y during the quarter.

NATIONAL GENERAL INS.-

National General Ins. saw its net income rise 598% y-o-y to AED 30.3 mn in 1Q 2024,according to the ins. firm’s financial statements (pdf). The firm’s ins. revenues increased 24% y-o-y to AED 217.6 mn during the quarter.

JULPHAR-

Gulf Pharma Industries (Julphar) turned profitable in 1Q 2024, recording AED 1.6 mn in net income, compared to a net loss of AED 3.9 mn in 1Q 2023, according to its financial statements (pdf). Julphar’s revenues dipped 3.3% y-o-y during the quarter to AED 439 mn. The revenue growth was impacted by currency devaluation in Egypt and regional geopolitical unrest, though the decline was offset by the company’s expansion across the GCC, according to a separate disclosure (pdf).

FUJAIRAH CEMENT INDUSTRIES-

Fujairah Cement Industries’ net losses deepened 45% y-o-y to AED 38.3 mn in 1Q 2024,compared to a net loss of AED 26.3 mn during the same period last year, according to the company’s financial statements (pdf). The company saw its revenues fall 99% y-o-y to AED 278k in 1Q 2024.

UNITED FOODS-

Dubai-based food and beverage company United Foods saw its net income increase 26.4% y-o-y to AED 14.3 mn in 1Q 2024, according to its quarterly financials (pdf). Revenues from contracts fell 11.5% y-o-y to AED 157 mn.

DUBAI INS.-

Dubai Ins. saw its net income more than double to AED 44 mn in 1Q 2024, up 122.5% y-o-y, according to its quarterly financials (pdf). Ins. revenues also rose 71% y-o-y to AED 697.2 mn.

ABU DHABI AVIATION-

Abu Dhabi Aviation’s net income more than doubled to AED 223.2 mn in 1Q 2024, up 119% y-o-y, according to its quarterly financials (pdf). Revenues from its contracts fell 34.4% y-o-y to AED 407.8 mn.

AGILITY GLOBAL-

Kuwaiti logistics outfit Agility Global’s bottom line rose 320.8% y-o-y to USD 44.7 mn during 1Q 2024, according to its first quarterly financials (pdf) following its technical listing on the ADX earlier this month. The company’s topline inched up 5.5% during the quarter to USD 979.4 mn.

GULF NAVIGATION-

GulfNav earnings drop in 1Q 2024: Gulf Navigation (Gulf Nav)’s net income fell 14% y-o-y to AED 11.5 mn during 1Q 2024, according to its financial statements (pdf). The company’s revenues fell 38% y-o-y to AED 23.8 mn during the quarter, the disclosure noted.

ESHRAQ-

Real estate investment company Eshraq Investments reported AED 306.1 mn in net losses in 1Q 2024, on the back of a “change in the value of the Goldilocks Fund,” which it exited to reduce its debt, the company said in its earnings release (pdf). Eshraq’s revenues from commercial operations fell 65% y-o-y to AED 4.1 mn during the quarter, due to a drop in the company’s rental income after Eshraq offloaded its Dubai assets in 2023.

Dubai cabinet approves Blue Residency visa for environmental professionals

POLICY-

Introducing the Blue Residency: Dubai Ruler Sheikh Mohammed bin Rashid Al Maktoum approved a new ten-year Blue Residency for professionals working in the field of environmental sustainability, Wam reports. The residency will be granted to anyone who has made “extraordinary contributions” to “environment protection, whether in marine life, land-based ecosystems, or air quality, sustainability technologies, the circular economy, or related fields,” Sheikh Mohammed said.

The cabinet also approved other key agenda items, including the National Youth Agenda 2031, giving priority in federal government jobs to Emiratis who have worked in the private sector for at least three years, and the creation of chief AI officer positions for all federal entities.

THE CABINET ALSO APPROVED-

The formation of a National Statistics Committee to verify national data;
The formation of a Higher Committee for Combating Commercial Fraud to update anti-fraud policies;
A regulatory framework for marketing calls;
A guide for the use of AI in government.

CAPITAL MARKETS-

#1- Standard Chartered adds UAE funds to Clearstream’s Vestima: Securities depository Clearstream has partnered with Standard Chartered to include UAE-based funds on its Vestima platform, according to a press release. The partnership will allow Standard Chartered to offer its retail investors access to invest in locally-domiciled funds, in compliance with the latest regulatory rules.

Background: The UAE’s financial services watchdog the Securities and Commodities Authority (SCA) issued a decision prohibiting funds and asset managers outside of the UAE from being publicly offered for retail subscription in the UAE, a rule that came into effect in April.

#2- Dubai Taxi and Phoenix are the latest Emirati firms to join MSCI’s Small Cap Index, following the quarterly review (pdf) of the MSCI Global Standard Indexes. The two Emirati companies — along with 19 other Mena-based listed stocks added to the index in the rebalance — will be included in the MSCI sections at the closing of trading on 31 May.

ENERGY-

Adnoc delivers low-carbon ammonia to Japan: The Abu Dhabi National Oil Company (Adnoc) has delivered the world’s first certified bulk commercial shipment of low-carbon ammonia produced using carbon capture and storage to Japan’s Mitsui, according to a press release. The low-carbon shipment was certified by global certification agency TUV SUD.

The details: The ammonia was produced at Fertiglobe’s Ruwais facility near Abu Dhabi and “will see the CO2 captured and permanently stored in the world’s first fully sequestered CO2 injection well in a carbonate saline aquifer,” the press release notes. This comes as part of the oil giant’s USD 23 bn investment in decarbonization, low-carbon solutions and climate technologies.

We knew this was coming: Adnoc launched the world’s first project to sequester CO2 into a carbonate saline aquifer and started capturing and storing the CO2 in 2Q last year. The project was earmarked to contribute to Fertiglobe’s production of low-carbon ammonia.

BANKING-

#1- Emirates NBD’s merchant clients will now be able to use Pine Labs’ omnichannel platform to upgrade their digital payment systems, according to a press release. Emirates NBD will first roll out the solution for clients in the UAE, and later to Saudi Arabia and Egypt.

#2- The Ras Al Khaimah Economic Zone (Rakez) and Rakbank signed an MoU to streamline banking services for Rakez clients, aiming to expedite account openings and enhance security, Wam writes.

MANUFACTURING-

Industrials giant Emirates Global Aluminium (EGA) has launched a new digital manufacturing platform in collaboration with Microsoft to expand the use of AI across its industrial operations, Wam reports. The platform will be used in EGA’s operations in Jebel Ali and Al Taweelah to expedite operational efficiencies.

HEALTHCARE-

#1- M42 launches new AI clinical model: Abu Dhabi-based G42 healthcare arm M42 rolled out the latest generation of its generative AI clinical large language model, Med42, on the sidelines of Abu Dhabi Global Healthcare Week, Wam reports. The new 70 bn parameter model version is based on Meta's Llama-3, and matched the performance of OpenAI's GPT-4 and Google's Med-Gemini on the United States Medical Licensing Examination sample exam questions. It seeks to integrate expert models across multiple health data modalities, including text, genomics, health records, and imaging.

What will the model be used for? Med42 facilitates the retrieval of relevant insights, searches patient histories, and summarizes records. Interdisciplinary research teams are also evaluating it for crafting tailored treatment strategies, clinical decision support, dosage decisions, and reviewing treatment literature. Experts worldwide can access the model on the HuggingFace platform for global testing, contribution, and assessment.

#2- DoH + Awqaf roll out AED 1 bn healthcare fund: Abu Dhabi’s Department of Health (DoH) and the Endowments and Minors Funds Management Authority (Awqaf Abu Dhabi) have launched a five-year AED 1 bn endowment fund aimed at providing funding for the healthcare sector to ensure sustainable and accessible healthcare services in the emirate, according to a statement. Awqaf has supported the endowment with a AED 50 mn donation.

#3- TII + BMC to offer cancer immunotherapy: The Technology Innovation Institute and Burjeel Medical City are teaming up to offer new immunotherapy solutions for cancer treatment, focusing on engineering T-cell based therapies like CAR-T cell therapy and TIL therapy Wam reports. The project involves two phases: first, creating a platform to identify cancer-specific antigens, and second, testing it to ensure it effectively targets these antigens. The partnership is expected to last for two years, according to the statement.

SUSTAINABILITY

Emirates receives SAF from Shell Aviation at London Heathrow: Emirates Airlines has received over 3k tons of sustainable aviation fuel (SAF) from Shell Aviation at the London Heathrow Airport to fuel some of its flights, according to a statement. The SAF is blended with standard jet fuel and will be incorporated into the airport’s fuelling infrastructure and jet engines until the end of the summer.

DEFENSE-

Edge + Indonesia sign AED 99 mn ammunition agreement: Defense contractor Edge Group inked an AED 99 mn agreement with Indonesian state-owned defense manufacturer PT Pindad to supply it with an ammunition production line, Wam reports. The ammunition facility is expected to go live in 2026.

IMPORTS-

SEC sets new standards for importing petroleum: The Sharjah Executive Council (SEC) approved on Tuesday a guide for importing, transporting, and storing petroleum hazardous materials, in a bid to regulate the circulation and operations of petroleum products in the emirate, Wam reports. The guide includes lists of petroleum products, permit requirements, and transportation and storage conditions.

INVESTMENT-

#1- Dubai to upgrade commercial activities in the Maldives: Dubai's dynamic freezone community IFZA and the Maldives’ Ministry of Economic Development and Trade inked an MoU yesterday to develop a special economic and financial services zone at Funadhoo Island and the Maldives Economic Gateway at Ihavandhippolhu Atoll, Wam reports. The agreement seeks to expand Maldivian commercial and economic activities, in a bid to enable future business, trade, and investment.

#2- The Sharjah Chamber of Commerce and Industry and the Economic Development Board of Mauritius inked an MoU to boost trade ties and collaboration during the Sharjah-Mauritius Business and Investment Forum, Wam reports. The pact enables visits, trade delegation exchanges, and joint participation in exhibitions and conferences.

Traders send US stocks to record high after promising inflation data

One story is driving the conversation in the global business press this morning: US stocks are at an all-time high. Wall Street’s benchmark indexes — the S&P 500, Nasdaq, and Dow — all hit record highs last night as traders cheered data showing US consumer prices rising at a slower rate in April.

The numbers: US inflation cooled to 3.4% in April, coming in below analyst expectations and 0.1 percentage points below the 3.5% recorded in March, according to Bureau of Labor Statistics figures released yesterday.

Traders react: The figure reignited trader optimism that the Federal Reserve could start cutting interest rates this year. Fed chair Jay Powell has said time and time again that the central bank will not cut rates before it ensures that the country is on a sustainable path to 2% inflation — its core target. “The news on core inflation was better than expected. Retail sales also showed some deceleration from the previously hot consumer sector. Taken together, this supports a Fed rate-cut in the fall,” one analyst told CNBC.

Where the markets settled: The S&P 500was up 1.2%, hitting a record 5,308. Dow Jones was up 0.9% and the tech-heavy Nasdaq jumped 1.4%.

Stocks rise, treasuries fall. Yields on two-year US treasuries fell to their lowest level since early April.

MARKETS THIS MORNING-

Major Asian benchmarks are all comfortably in the green this morning, following Wall Street’s lead. Futures suggest both European and US markets are on track to open in positive territory at the opening bell today.

ADX	9,021	-0.4% (YTD: -5.8%)
DFM	4,093	-1.1% (YTD: +0.8%)
Nasdaq Dubai UAE20	3,513	-0.9% (YTD: -8.6%)
USD : AED CBUAE	Buy 3.67	Sell 3.67
EIBOR	4.9% o/n	5.5% 1 yr
TASI	12,103	-0.2% (YTD: +1.1%)
EGX30	25,316	-0.1% (YTD: +1.7%)
S&P 500	5,308	+1.2% (YTD: +11.3%)
FTSE 100	8,446	+0.2% (YTD: +9.2%)
Euro Stoxx 50	5,101	+0.4% (YTD: +12.8%)
Brent crude	USD 82.94	+0.7%
Natural gas (Nymex)	USD 2.42	+3.1%
Gold	USD 2,395	+1.5%
BTC	USD 65,831	+6.9% (YTD: +55.7%)

THE CLOSING BELL-

The DFM fell 1.1% yesterday on turnover of AED 375.9 mn. The index is up 0.8% YTD.

In the green: National Industries Group Holding (+15.0%), Al Salam Bank (+2.0%) and Commercial Bank of Dubai (+2.0%).

In the red: National General Ins. Company (-10.0%), National International Holding Company (-10.0%) and Al Ramz Corporation Investment and Development (-9.1%).

Over on the ADX, the index is down 0.4% on turnover of AED 1.1 bn. Meanwhile Nasdaq Dubai closed down 0.9%.

CORPORATE ACTIONS-

AD Ports has tapped Al Ramz Capital as a liquidity provider for its listed shares on the ADX, the company stated in an ADX disclosure (pdf).

CALENDAR

MAY

12-16 May (Sunday-Thursday): European Film Festival, Cultural Foundation, Abu Dhabi.

14-16 May (Tuesday-Thursday): The Airport Show, Dubai World Trade Centre.

14-16 May (Tuesday-Thursday): Seamless Middle East, Dubai World Trade Centre.

14-16 May (Tuesday-Thursday): Critical Communications World 2024, Dubai World Trade Centre.

16-19 May (Thursday-Sunday): Acres Real Estate Exhibition, Dubai World Trade Centre.

18 May (Saturday): Expo 2020 Dubai Museum opening, Expo City Dubai.

18-26 May (Saturday-Sunday): Abu Dhabi Comedy Week, Abu Dhabi.

19 May (Sunday): InvestopiaEurope, Milan.

19 May (Sunday): RTA’s Deadline for bids to design and build Dubai Metro's Blue Line.

20-22 May (Monday-Wednesday): Middle East Petroleum & Gas Conference, Dubai.

21-23 May (Tuesday-Thursday):International Exhibition for National Security & Resilience, ADNEC Centre Abu Dhabi.

24-25 May (Friday-Saturday): Baby Expo, Dubai World Trade Centre.

27-29 May (Monday-Wednesday): Arab Media Forum, Dubai.

30 May (Thursday):Abu Dhabi Family Office Summit, Saadiyat Rotana Resort, Abu Dhabi.

JUNE

1 June (Saturday): Deadline for TiE Women MENA Programme 2024 applications.

2-4 June (Sunday-Tuesday): The World Air Transport Summit and International Air Transport Association (IATA)’s annual general meeting, Dubai.

4-6 June (Tuesday-Thursday): The Hotel Show, Dubai World Trade Centre.

4-6 June (Tuesday-Thursday): INDEX, Dubai World Trade Centre.

4-6 June (Tuesday-Thursday): WORKSPACE, Dubai World Trade Centre.

4-6 June (Tuesday-Thursday): Leisure Show, Dubai World Trade Centre.

5 June (Wednesday): Deadline for Sidara to resubmit or withdraw its takeover bid to John Wood Group.

5 June (Wednesday): The Optimism Forum, Cairo, Egypt.

15 June (Saturday): Arafat day, national holiday.

16-18 June (Sunday-Tuesday): Eid Al-Adha, national holiday.

Signposted to happen sometime in 1H 2024:

Spinneys inaugurates its first store in KSA

JULY

7 July (Sunday): Islamic new year, national holiday.

AUGUST

21-22 August (Wednesday-Thursday): Dubai Business Forum in Beijing, China.

SEPTEMBER

9-11 September (Monday-Wednesday): World Utilities Congress, Abu Dhabi.

28-30 September (Saturday-Monday): World Association of Nuclear Operators (WANO) Biennial General Meeting, Abu Dhabi.

OCTOBER

30-1 November (Wednesday-Friday): World Cities Cultural Summit, Dubai.

NOVEMBER

11-14 November (Monday-Thursday): ADIPEC, Abu Dhabi.

11-14 November (Monday-Thursday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi.

11-14 November (Monday-Thursday): ADIPEC Decarbonisation Accelerator, Abu Dhabi.

27-28 November (Wednesday-Thursday): RAK Energy Summit, Al Hamra International Exhibition and Conference Centre, Ras Al Khaimah.

DECEMBER

2-3 December (Monday-Tuesday): National Day, public holiday.

5-8 December (Thursday-Sunday): Formula 1 Etihad Airways Abu Dhabi Grand Prix, Yas Marina Circuit.

9-10 December (Saturday-Sunday): The Bitcoin Mena Conference, Adnec Centre Abu Dhabi.

10-12 December (Tuesday-Thursday): Middle East Business Aviation, Dubai World Central.

Signposted to happen sometime before the end of the year:

Spinneys inaugurates three more stores in KSA

Signposted to happen in 2025:

6-11 April (Sunday-Friday): Geo-Spatial Week 2025, Dubai.
3-4 June (Tuesday-Wedneday): Make-A-Wish International’s Global Wish summit, Abu Dhabi.

Signposted to happen sometime in 2028:

Abu Dhabi to host the 47th Chess Olympiad

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