Adnoc drops Braskem stake acquisition bid

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Plenty of news from day one of the Arabian Travel Market + DIFC sees 2024 being its “busiest year” yet

Good morning, friends. We have another packed issue for you this morning, with plenty of news from the Arabian Travel Market to dig your teeth into, as well as updates on Adnoc’s bid for a Braskem stake and plenty of earnings.

THE BIG STORY is Adnoc’s decision to halt talks over a USD 2.1 bn acquisition of a stake in Brazilian petrochems firm Braskem, which leads our news well today. Also worth your attention: IHC has announced an AED 5 bn share buyback program on the heels of a strong 1Q 2024 earnings report.

PUBLIC SERVICE ANNOUNCEMENTS-

#1- WEATHER- The hot weather continues today, with Dubai seeing the mercury rise to 37°C, before cooling to an overnight low of 30°C, while Abu Dhabi will see temperatures hit 38°C.

#2- Abu Dhabi now has a dedicated committee in place to handle housing grant transfer requests predating 2 October, 2018, courtesy of the Abu Dhabi Housing Authority, according to the Abu Dhabi Media Office. Citizens can present their housing transition cases to the newly formed committee at the Iskan Abu Dhabi Center until 31 July.

Certain conditions apply, including ownership of residential land or suitable housing, registration in the Real Estate Register as a housing grant recipient, absence of concurrent claims for other residential or housing grants or loans, and obtaining written consent from one’s wife. Decisions made by the committee are considered final.

#3- Call ADPHC for pest control services: Public health pest control services have been transferred over to the Abu Dhabi Public Health Centre (ADPHC) from the Abu Dhabi Waste Management Company — more commonly known as Tadweer Group — according to the Abu Dhabi Media Office. ADPHC will now handle reports of pest proliferation in open areas and homes, manage permitting processes, and regulate the distribution of pesticides. Requests can be made via the Government Contact Centre at 800555 or the Tamm platform.

#4- The Dubai International Financial Center (DIFC) has launched consultations on amendments that would provide statutory certainty to DIFC law extending beyond the English Common Law — which governs the jurisdiction — as it looks to provide a reference for interpretations that are not accounted for by the body of law, it said in a statement. Any gaps not provided by DIFC statute will then be backstopped by English common law, the statement added. You can send in your responses to the consultation (pdf) before 1 June 2024.

FROM THE ARABIAN TRAVEL MARKET-

The Arabian Travel Market kicked off yesterday with a slew of fresh data from officials, updates on tourism initiatives in the region, and agreements. The highlights from day one:

#1- Dubai hosted some 5.2 mn tourists in 1Q 2024, up 11% y-o-y, Dubai Crown Prince Hamdan bin Mohammed said on X. Occupancy rates for the period stood at 83%, “ranking among the highest globally.”

#2- Abu Dhabi’s Yas Island welcomed over 35 mn visitors in 2023, marking a 38% y-o-y increase, Abu Dhabi-based destination management company Miral said in a press release. Saadiyat Island also saw a 44% y-o-y increase in visits during the year.

#3- The unified GCC visa could be in place by the end of the year, Khaleej Times quoted Chairman of the Sharjah Commerce and Tourism Authority (SCTDA) Khalid Jasim Al Midfa as saying at the event.

#4- Flydubai is set to complete its USD multi-mn retrofit project before year-end, aiming to upgrade the interior of its next-generation Boeing fleet, flydubai CEO Ghaith Al Ghaith said, according to Wam. The ongoing project — launched in January — will see an upgrade in interiors and overall experience. Flydubai has carried over 5 mn passengers between January and April, marking a 13% y-o-y jump.

#5- Saudi low-cost airline Flynas is adding Abu Dhabi, Sharjah, and the soon-to-be expanded Al Maktoum International Airport to its network as of September, from its bases in Riyadh, Dammam, Jeddah, and Al Madinah, Khaleej Times reports. The expansion will take the number of routes between the countries to nine, up from four currently.

WATCH THIS SPACE-

#1- Presight eyes more acquisitions: ADX-listed data analytics firm Presight AI Holding is considering partnering with an Abu Dhabi fund for acquisitions that will expand its international footprint, Presight CEO Thomas Pramotedham tells Reuters. “With the rising trend in AI, there are many companies available, but the key thing is how much it will add to Presight's existing growth strategy,” Pramotedham said, without disclosing when these transactions would materialize.

ICYMI- The company snagged a 51% majority stake in AIQ, Adnoc’s AI joint venture with G42, last week. Presight acquired the entirety of G42’s 40% stake in AIQ, in addition to 11% of Adnoc’s 60% stake in the JV.

#2- 2024 is set to be Dubai International Financial Center’s (DIFC) “busiest year ever,” Dubai Financial Services Authority (DFSA) CEO Ian Johnston tells Bloomberg, expecting that the financial center will see a “record number of firms” registering in 2024. With the financial hub “already about 50% ahead” of its record registrations last year, which saw the DFSA issue over 112 financial services licenses, the DIFC is on track to meet its target.

Another Chinese lender will soon set up shop in DIFC, Johnston also said, without disclosing the name of the Chinese bank, marking the fifth to establish a presence in the business center. “Of the 29 globally systemically important banks in the world, we have 27 doing business in DIFC,” Johnston said.

REFRESHER- DFSA saw a 125% y-o-y uptick in registrations by hedge fund managers in 2023 and expects continued strong interest from global hedge funds looking to set up shop in DIFC, Johnston said in February. DIFC’s company registrations jumped 34% y-o-y, with 1.4k companies registering to set up shop in the freezone. The record growth in registrations was “supported by both financial and innovation companies and non-financial companies.”

HAPPENING TODAY-

#1- The Dubai Fintech Summit 2024 is on its second and final day at Madinat Jumeirah. The summit will host over 300 thought leaders on five stages and present tech from 200+ exhibitors.

#2- Sharjah + Dubai trade missions in Asia: A trade delegation from the Sharjah Chamber of Commerce and Industry led by Chairman Abdullah Sultan Al Owais landed in India earlier this week and will be there until Friday, 10 May, Wam reports. The mission will be looking to strengthen economic ties and explore potential investments.

A Dubai International Chamber trade mission is also making the rounds in Indonesia and Vietnam to help local companies grow in these markets, Wam reports.

#3- The Arab Tourism Media Awards also kicked off yesterday and runs through to Thursday, 9 May, at the Dubai International Convention and Exhibition Centre, state news agency Wam reports. The Arab Union of Tourist Media will present awards to 34 Arab personalities, tourism institutions, and cities that have contributed to the tourism industry in the Arab region.

#4- TheAnnual Investment Meeting (AIM) Congress begins today and will run until Thursday, 9 May at the Abu Dhabi National Exhibition Center. Gathering senior government officials and industry experts, the summit will focus on exploring means of strengthening the economy under the theme Resilient, Sustainable Economic Growth – Creating a Healthy and Prospective Investment through FDI and FPI.

#5- The Innovative Finance Expo is set to be held tomorrow and Thursday at the Jumeirah Emirates Towers in Dubai. The event will bring together fintech and blockchain companies and experts to serve as a knowledge exchange platform, showcasing the latest developments in the financial sector, including DeFi crypto, foreign exchanges, payment, and finance technologies.

ALSO- For our fellow iSheep: Apple is expected to unveil new iPads this afternoon at 6pm UAE time (7am Pacific). The expectation: a revamp of the line that restores some coherence to the offering (and for the Pro to get a FaceTime camera on the long edge). You can stream the announcement from Apple’s website or its Youtube channel.

THE BIG STORY ABROAD-

Hamas has accepted a ceasefire proposal — Israel says it’s not enough and is hammering Rafah. Here’s what you need to know this morning:

Hamas accepted a proposal from Egyptian and Qatari mediators;
Israel says it doesn’t go far enough and plans to take over the Rafah border crossing;
Israeli forces are attacking Rafah by air and on the ground. More than 1 mn people have sought refuge in city on Egypt’s border, and the Israeli army is now telling at least 100k of them in east Rafah to move into a so-called “humanitarian zone;
Shuttle diplomacy continues today in Cairo after both sides said they’d continue indirect talks.

UAE Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan spoke to his Qatari and Egyptian counterparts yesterday to discuss the agreement, commending the two countries’ efforts, Wam reports.

There’s more foreign policy ugliness in the headlines: Russia has rattled Western capitals with an announcement that it’s running drills on the use of tactical nuclear weapons. Pundits say the Kremlin is putting on pressure in response to French and British statements on Ukraine.

SOUND SMART- Tactical nukes are smaller, less-powerful weapons designed for use on the battlefield. Strategic nuclear weapons are the things designed to take-out cities.

IN THE BUSINESS PAGES- Reuters won a Pulitzer Prize for its long-term investigation into Elon Musk’s business empire, including Tesla and SpaceX. The newswire also won for its photography of the war between Hamas and Israel. You can read the full series here, read the Pulitzer announcement, or check out the long list (pdf).

OUR NEXT CONFERENCE IN CAIRO-

Foreign investors are falling in love with Egypt again… Foreign investors we speak with (debt, equity, and strategic alike) have growing appetite for Egypt. They’re buying into local debt, eyeing promising shares, and committing bns of USD to both new ventures here and the growth of their existing businesses. They like the Egypt story that’s taking shape after the float of the EGP, and its competitive advantages are clear to many of them: It’s a massive consumer opportunity and a regional export hub of tomorrow.

The Enterprise Optimism Forum 2024 will do exactly what it says on the tin: Spark conversations about a future that sees Saudi Arabia, Egypt, and the the UAE at the heart of a more vital Middle East economy — and provide an early, actionable roadmap for those who are “long Egypt.”

We’ll be talking with you about the agenda over the coming couple of weeks.It features speakers from Egypt and abroad who are future-proofing their businesses and angling to capture tomorrow’s opportunities — and who aren’t afraid to answer some tough questions.

*** Interested in attending? Tap or click here to let us know. Seating is limited.

CIRCLE YOUR CALENDAR-

The Abu Dhabi Global Healthcare Week is set to take place between 13-15 May at the Abu Dhabi National Exhibition Centre. Hosted by Abu Dhabi’s Department of Health, the event will bring together around 5k attendees, 100 exhibitors, and 1k delegates specialized in healthcare. Featured topics include AI, biotech, and genomics. You can find the event brochure here (pdf).

The Acres Real Estate Exhibition is set to take place between 16-19 May at the Dubai World Trade Center. The event will gather leading property developers, investors, brokers, and experts, to showcase the latest projects and technologies in the real estate industry.

The Middle East Petroleum and Gas Conference is set to take place from 20-22 May in Dubai, hosted by the Emirates National Oil Company and under the organization of S&P Global Commodity Insights. The theme of the conference is “Evolving Core Energy Markets within a Sustainable Landscape.”

The Dubai Business Forum in Beijing, China is set to take place between 21-22 August, Wam reports. Hosted by Dubai Chambers, the event aims to attract foreign direct investments by presenting investment prospects.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

Adnoc drops Braskem bid + DP World completes Savan Logistics acquisition

Adnoc backs out of Braskem acquisition bid: Abu Dhabi National Oil Company (Adnoc) has withdrawn its offer to acquire a USD 2.1 bn stake in Brazilian petrochemicals company Braskem, the selling shareholder, Novoner, said in a statement (pdf). Novonor remains “fully engaged in the process,” it said.

Why the sudden change of heart? The reason behind Adnoc’s withdrawal remains unclear, with Novoner saying it received notice from Adnoc that the group has “no interest in continuing” with negotiations. Citigroup analysts say that “it’s too early” to ascertain Adnoc’s reasoning, Bloomberg reports.

Background: Adnoc had submitted a USD 2.1 bn non-binding offer in November to acquire Brazilian conglomerate Novoner’s 38.3% stake in Braskem. Its bid represented a premium of more than 100% over Braskem’s closing share price at the time the bid was made, Reuters reported at the time. Braskem had also reportedly received a joint USD 7.6 bn offer earlier from Adnoc and Apollo for a stake. In March, an unnamed new bidder also entered the race for the shares.

Braskem still has options: Brazilian state-owned oil producer and owner of a 36.1% stake in Braskem has preferential rights to buy the stake, which it is “ready” to exercise after completing due diligence if it has to, CEO Jean Paul Prates told Bloomberg separately. “Other companies” are also conducting due diligence, Prates said, without disclosing any names.

Market reax:The Brazilian company’s stock closed down 14.5%, after falling as much as 16% in intraday trading on the news, according to Bloomberg.

The acquisition was one of several Adnoc is looking at as part of a push into the chemicals sector and away from oil, including a multi-bn USD acquisition of German chemicals group Covestro, which has also stalled and could see the company submit a bid higher than EUR 11.3 bn (AED 44.9 bn). Adnoc is also working on merging its two plastic units, Borealis and Borouge, but the transaction is also facing delays due to changes in management, elections in Austria, and sticking points over technicalities of the merger.

OTHER M&A NEWS-

DP World has finalized its acquisition of Laos-based Savan Logistics, which operates the Savannakhet dry port in Laos' Savannakhet Special Economic Zone, according to a statement. No details were provided on the value of the transaction.

The move sees DP World assuming management of the dry port, a logistics hub linking supply chains along a multinational corridor connecting Laos with Cambodia, Myanmar, Thailand, and Vietnam. Aside from managing the dry port and its warehouses, DP World will also coordinate cross-border transport, freight forwarding, and integrated logistics solutions at the site, the statement said.

Coffee with: Karim El Solh, CEO of Gulf Capital

While the rest of the world is seeing a lull in dealmaking, the Gulf is emerging as a bright spot, UAE-based private equity firm Gulf Capital CEO Karim El Solh (LinkedIn) tells EnterpriseAM UAE. Plenty of sectors are ripe for growth and investment, from AI to healthcare and renewables, and private equity firms here in the UAE and the wider region are capitalizing on the momentum.

Whether it’s the IPO boom that has sustained itself despite global headwinds, new forms of capital — like private capital — gaining a foothold in the region, or the focus on growth capital as opposed to leverage buyouts, the region is fast becoming a hotspot for investors looking to make substantial returns.

When it comes to exciting industries in the region, Gulf Capital is all in on five: Fintech, healthcare, business services, consumer, and sustainability — which it defines as water and food security, renewables, and the energy transition.

As the firm prepares to reach first close on its fourth fund, which El Solh hopes will help it cross the USD 3 bn mark in assets under management, we sat down with El Solh for coffee in Dubai to discuss what the firm has in store over the coming year, which markets he’s bullish on, and why dealmaking in the Gulf is booming.

KEY TAKEAWAYS:

Gulf Capital plans to achieve first close on its fourth fund in 2H 2024, with an eye to raise more than USD 800 mn;
Asia and the Middle East are bright spots for investors for the next few decades;
The momentum in the regional stock market scene is fueling more exits in the region;
The firm will be doing most of its fundraising from LPs in Asia and the Gulf.

Enterprise: How has the Gulf managed to sustain its dealmaking momentum despite a global liquidity crunch and economic headwinds?

Karim El Solh: It’s a story of sharp contrast. When the US and Europe are slowing down, we’re having our best year ever here. The region is growing very fast, and Europe is entering recession. Diversification of the economy and the expansion of non-oil sectors is working very nicely. Countries in the region are launching a number of new industries that are really paying off, from tourism, to healthcare, to banking, to technology.

Even though there’s a lot of clouds on the horizon globally, the only bright spot today is in the Gulf region. Another one is India. Those two markets are very promising both from a growth and exit perspective.

We're working on four exits this year — probably the most we’ve ever done in a year. This is at a time when exits in Europe are slowing down, and it’s very difficult to sell companies. We started the year in January with the strategic sale of Amcan, a leading sports and nutritional supplements distribution company, and we have three exits in the pipeline. That’s refreshing for global LPs.

The average growth in profitability for all of our portfolio companies in 4Q 2023 was 46% on the previous year. For the full year, we grew 33% on the previous year. That kind of growth excites global investors because they’re not seeing it anywhere else.

Part of it is the growth of the economy, but the other part is us working with our operating partners to grow our companies. We don’t rely on leverage. The way we make our money is by doubling and tripling profitability.

On all of our exits, we increase profit by 224%. That’s how we generate our returns. When people ask if we’re impacted by the high interest rates, I say not really, because I never put leverage on companies. This is in sharp contrast to your typical US leverage buyout and European leveraged buyouts; they put a ton of leverage, and when Libor — the London interbank offered rate — was close to zero, it was very easy to make money on cheap financing. But now Libor is over 5%, and the cost of borrowing is over 11%. It becomes very onerous, and their companies are very stressed because of it.

E: How do you make sure your companies are making returns?

KS: We’re a control buyout fund. 80% of our acquisitions have been control buyouts, and I think looking ahead, it will be 100%. We insist on control because we bring a deep bench of operating partners. We clean, fix, and grow our companies — we’re an active owner. We cannot transform a company with a small minority stake.

E: Looking ahead, what’s your preferred exit strategy? Are you looking at IPOs or strategic sales?

KS: Historically, we were very focused on selling to strategic buyers because we have controlling stakes and market leaders. The sectors we focus on are growing fast. They attract a lot of global investors and strategic buyers. With Chef Middle East, we held an auction and got a bid from Thailand and Germany, but it was eventually sold to a US company — the Chef’s Warehouse, which is listed on Nasdaq. We got a 2.5x return on that investment.

But now I’m seeing a lot of global investors coming here, and they're approaching us. We’re speaking to three or four of them, so that’s a new exit avenue which we didn’t have before. They’re investing out of big funds, USD 20 bn funds. They need a minimum equity check of USD 300 mn. For me, that’s great, because we write checks of USD 50-100 mn. We double, triple the size of these companies, and we can sell to them.

The other thing that is new is how vibrant and exciting the regional stock markets have become. Historically, we had to go to London to do IPOs of companies like Gulf Marine Services, because the markets here were not open. Now, it's much more exciting to do IPOs here than internationally. I think the IPO route for the next two years could be an exciting one.

E: Global investors coming here is an interesting opportunity for you. But is there concern over competition?

KS: We are in the midmarket space, while most of the ones coming here are in the big check space, so we are not overlapping. They will never spend time like we do on a USD 40-60 mn transaction when they are a USD 20 bn fund. It doesn’t move the needle for them. They need bigger tickets.

E: What do you have in line this year in terms of investments and funds?

KS: We became more and more sector-focused after 2016. After 2015, there was an oil crash. Oil prices dropped by 70%. It was then — as we launched our third fund — that we shifted from being a generalist and investing a lot in oil and gas to looking into the future.We mapped out 45 sectors and we picked the five fastest growing sectors. We’re now building a pipeline from these sectors for our fourth fund.

We hope to achieve the first close on our fourth fund in the second half of the year. Fund III is 90% deployed, so we have 10% left.

E: Do you have a certain goal for the size of the fourth fund?

KS: We’ve been growing steadily. Our first fund was USD 160 mn, the second was USD 533 mn, and the third fund was USD 750 mn. Hopefully, our fourth fund cover is USD 800 mn or more. We’ll typically invest in 12 companies per fund, and the average ticket is USD 50-100 mn.

E: What does your LP mix look like right now?

KS: Historically, we’re backed by a number of sovereign wealth funds, pension funds, funds of funds and family offices, around half from the Gulf and the other half from outside the region — a lot from Asia, and some from Europe.

I think for this upcoming fund, the most fertile grounds for fundraising would be the Gulf and Asia. The economies are doing well; they’re liquid, they like the Gulf, and they’re keen to put money here. I see much less appetite from Europe because Europe is going through a lot of issues, from economic recession to lack of liquidity. With that context in mind, I see European investors pulling back, maybe going back to looking at their countries, while the Asian sovereigns are coming here en masse. We’re much more excited to look east rather than west when it comes not only to investments, but fundraising as well.

E: And speaking of Asia, you were recently on a roadshow there. What’s exciting to you about Asia right now and which countries and sectors specifically are you looking at?

KS: I think the pleasant surprise I found was Japan. It was very nice to see the strong revival Japan’s going through. Local players are very excited to invest in Japanese private equity and there’s more activity and more take-private. You feel they’re going through a generation shift, after being a sleepy destination. That was a bright spot.

India is very exciting as well. China is facing some issues, but I think they’re stabilizing and you can already see a rebound in the Hong Kong stock market. I think 2024 could be the year where they turn the page and resume the growth they had before.

Asia is a very exciting consumer market, with a big population that’s growing fast. Our head of Singapore has a consumer background, used to work at firms like LVMH, Zegna and Nike, and has a unique network of potential investments in that sector, so that’s an interesting play.

We’re also looking at bringing our healthcare companies to Asia. We own the largest fertility platform here — ART Fertility. We’ve expanded to India, and opened 10 centers, and we will soon open 15 new centers.

I think the corridor we’re investing in from the near to Far East today is the fastest growing corridor in the world. It’s an exciting region, and if you look 30 years from now, the European economy will increase 1.5x, the US 1.8x, the Gulf will triple in size, Southeast Asia will quadruple, and India will quintuple. If you want growth, you have to be in this corridor where we’re playing. It’s not in Europe, it’s on the near to far east — the new Silk Road.

E: Since healthcare is one of your focal sectors, can you tell us more about the growing consolidation trend in the industry here in the UAE?

KS: There’s a lot of action on hospitals now, but this is not a sector we look at because hospitals tend to be very capex-heavy and take a long time to scale. We prefer asset-light businesses, like clinics and our fertility platform. In four years, we went from one to 15 centers across the Gulf and India. You can scale and build faster and will have generated a much higher return investing in clinics and asset-light healthcare opportunities than in hospitals.

E: Back to your strategy and priorities for the year: What will your investment-to-exit ratio look like? And can you give us a breakdown of the investments you plan to make per market?

KS: I think this year we will see much more exits than new investments. We've been growing our companies for a long time, and we’ve reached record profitability. It's an excellent time to be harvesting our portfolio. I expect the exit-to-investments ratio to be 2:1. That’s where we are in the life cycle of our fund.

Fund IV will be probably 70% Gulf, 30% Asia. But as we do more bolt-on acquisitions — acquisitions of smaller companies — most of which come from Asia, it could become 50:50.

A spotlight on how much capital was raised by UAE, MENA startups in April

Six UAE startups raised a combined USD 32 mn in April 2024, Wamda reports, marking nearly a 1000% y-o-y increase compared to the USD 3 mn three UAE startups raised in April 2023, according to Enterprise calculations based on Wamda figures from last year. UAE startups landed the largest sum of investments in MENA during the month, eclipsing Saudi Arabia.

Who raised money: The largest ticket across the region was UAE fintech outfit Fortis, which raised USD 20 mn in Series A funding. Dubai-based e-commerce platform Wee Marketplace also secured USD 10 mn in equity and debt from SIG Investment as part of its pre-series A funding, while Shorages closed a USD 1 mn pre-series A led by Riyadh-based investment manager Joa Capital. Wamda does not provide further information on the other startups it says raised funding last month.

THE REGIONAL PICTURE-

Investments in MENA startups rose 7x y-o-y to USD 55 mn in April, according to our math. Meanwhile, that figure shrank 78% on a monthly basis with startups landing USD 254 mn in March 2024.

Fintech is king: Four fintech companies from the region bagged USD 25.7 mn in April, followed by ecommerce at USD 10.5 mn, AI companies at USD 8 mn, and SaaS providers at USD 3.5 mn. The bulk of funding went to companies that are at stages beyond the seed level.

Investors are bullish on B2B startups, with USD 42.5 mn raised by B2B companies across 12 transactions, while B2B2C companies landed USD 11 mn, and those with a B2C model bagged USD 1.2 mn.

Only one female founder was funded in April with a slim USD 100k, while male-founded startups reeled in USD 43 mn during the month. The remaining USD 11.9 mn went towards startups with mixed-gender leadership.

IHC reports bottom line growth in 1Q 2024, plans AED 5 bn share buyback

IHC bottom line rises 87% in 1Q, announces AED 5 bn share buyback: ADX-listed conglomerate International Holding Company (IHC) saw its net income climb 87% y-o-y to AED 8 bn in 1Q 2024, according to its earnings release (pdf). The investment giant posted AED 19.3 bn in revenues, up 22% y-o-y during the quarter.

The conglomerate attributed its robust growth to “positive performance from key segments,” particularly real estate — driven by the transfer of several assets under Modon Holding — as well as the marine and dredging segment.

IHC plans to buy back to AED 5 bn of its shares over one year, leveraging its stable income growth “to enhance shareholder value through increased earnings per share,” the conglomerate said in a disclosure (pdf). The share buyback program will see IHC cancel the shares after repurchasing them, pending board approval.

Looking ahead, 2PointZero will help IHC diversify its portfolio “and penetrate new markets and regions, aiming to maximize our impact," IHC CEO Syed Basar Shueb said. IHC set up 2PointZero in January as a holding company with some AED 100 bn (USD 27 bn) of assets under its umbrella, including Chimera Investment, private-markets focused firm Lunate, crypto mining player Citadel Technologies, Middle-East focused Sagasse Investments, Egypt’s Beltone Financial Holding, as well as Abu Dhabi’s International Resources Holding.

Alpha Dhabi, Empower, Al Khaleej, and NCTH report 1Q 2024 earnings

Another day, another batch of earnings reports — this time from Alpha Dhabi, Empower, Al Khaleej Investments, and the National Corporation for Tourism and Hotels.

ALPHA DHABI-

Alpha Dhabi reports record revenues: Investment holding company Alpha Dhabi saw its net income fall 37% y-o-y to AED 4.6 bn in 1Q 2024, according to the firm’s quarterly financials (pdf). The decline in net income was attributed to the recently introduced corporate tax and the merger of Pure Health with ADQ’s healthcare subsidiaries in 2022.

Alpha Dhabi’s revenues stood at a record AED 14.2 bn during the quarter, up 11% y-o-y. Its net operating income jumped 232% y-o-y to AED 2.56 bn, according to a separate summary of its financials (pdf).

Strategic partnerships and acquisitions also contributed to robust performance. Alpha Dhabi transferred its 25% stake in Gordon Technologies to its recently formed JV with Adnoc Drilling during the quarter, and shed a 49% stake in its construction unit Alpha Dhabi Construction Holding to ADQ. The company also sold three of its hotel businesses in exchange for 1.25 bn new shares in the National Corporation for Tourism and Hotels, and launched a global lifestyle vertical with Admo Lifestyle Holding via its luxury lifestyle subsidiary ADMO.

Looking ahead: “As we chart the path forward into 2024, our aim is to build on this energy by unlocking exciting opportunities here in the UAE as well as expanding our global footprint. To do this, we will be both active and agile by exploring possibilities, including the adoption of Artificial Intelligence solutions, that expand and add depth to our portfolio,” said Alpha Dhabi CEO Hamad Al Ameri.

EMPOWER-

A marginal drop in Empower’s bottomline: Emirates Central Cooling Systems Corporation (Empower) recorded a 1% drop y-o-y in net income in 1Q 2024 to AED 167.4 mn, according to its financial statements (pdf). The company's revenues were up 8.8% y-o-y to AED 537.7 mn.

Empower’s portfolio expanded in 1Q: The company began the process of connecting Dubai’s Al Wasl skyscraper to its district cooling network last month and inked an agreement with Al Habtoor Group to supply Al Habtoor Tower with district cooling services.

Empower expects revenues to keep rising: Stricter government regulations are anticipated to curb greenhouse gases in the coming years which will likely boost the expansion of district cooling, which offers more energy efficiency than conventional systems, the statement adds.

AL KHALEEJ INVESTMENTS-

Al Khaleej Investments turns to the black in 1Q: Ras Al Khaimah-based Al Khaleej Investments turned to profitability in 1Q 2024, reporting a net income of AED 4.6 mn over the period, compared to the AED 1.8 mn loss recorded in the same quarter last year, according to its earnings release (pdf). Its top line remained mostly flat during the first three months of 2024, with revenues standing at AED 4.27 mn during the quarter.

NATIONAL CORPORATION FOR TOURISM AND HOTELS-

The National Corporation for Tourism & Hotels saw its net income grow to AED 19.6 mn in 1Q 2024, marking a modest 2% y-o-y increase, according to its earnings release (pdf). The hospitality firm’s revenues also inched up 0.9% y-o-y to AED 171.7 mn during the three-month period.

Ajman Bank + Speedinvest tap new hires. PLUS: Digital School board reinstated

Ajman Bank has appointedAdrian Hodges (LinkedIn) as its new group treasurer, according to a statement. Hodges has over three decades worth of experience in treasury and global markets, and served previously as the head of global markets solutions at the Commercial Bank of Dubai.

Pan-European venture capital fund Speedinvest appointed Rana Abdel Latif (LinkedIn) as a partner in its emerging markets team, tasked with identifying future startup investments across the region, according to a press release (pdf). Rana has almost a decade of experience in M&A and financial transactions from her previous positions at Nclude Fintech Innovation Fund and Qalaa Holdings.

Dubai ruler Mohammed bin Rashid Al Maktoum has issued a directive to reconstitute the board of directors of the Digital School, one of the educational projects of the Mohammed Bin Rashid Al Maktoum Global Initiatives, Wam reports. AI and Digital Economy minister Omar bin Sultan Al Olama was appointed head of the board, which will serve for three years until members are reappointed or a new board of directors is formed.

Emirates to promote tourism in Turkey, Malaysia and China + DFM suspends trading in Ekttitab Holding

AVIATION-

Emirates inks slew of partnerships: National carrier Emirates signed a number of partnership agreements yesterday during its participation in the Arabian Travel Market in Dubai, according to a statement.

#1- Emirates and Tourism Malaysia signed an MoU aimed at enhancing tourism in Malaysia by organizing familiarization trips from GCC and Mena markets, where the carrier operates, and exploring launching joint advertising campaigns.

#2- Emirates will team up with the Türkiye Tourism Promotion and Development Agency to boost tourist traffic to Turkey in markets across the carrier’s network by launching joint marketing campaigns. The agreement will also see Emirates explore opportunities with the agency to organize familiarization trips to Turkey.

#3- Emirates and the Abu Dhabi Chamber of Commerce and Industry (ADCCI) will offer discounted travel services to ADCCI’s employees under a partnership agreement.

#4- Emirates also signed an MoU with the China Cultural Centre in the UAE to promote inbound tourism to China, via joint advertising campaigns across Emirates’ global network and facilitating trips to China, “to increase awareness about the market’s touristic appeal and develop more business and trade opportunities,” a separate statement reads.

CAPITAL MARKETS-

Trading in DFM-listed Ekttitab Holding was suspended by the Capital Markets Authority on Thursday due to reservations by the external auditor on its FY 2023 earnings, according to a bourse filing (pdf). The company has to clarify the nature of an “investment in an associate company” company, following the proper reporting guidelines, no later than 15 August.

FINANCE-

Asset manager State Street is reopening its Dubai office amid the region’s rapid growth, particularly given the surge in IPO activity, CEO Yie-Hsin Hung told Bloombergin an interview (watch, runtime: 5:32). The Dubai office will focus on asset management, complementing the company’s operations in Abu Dhabi, which primarily concentrate on investor servicing.

HEALTHCARE-

M42 + AstraZeneca partner on preventive medicine and companion diagnostics: Abu Dhabi-based G42 healthcare arm M42 has inked an agreement with AstraZeneca to conduct sequencing of hereditary breast cancer in a bid to advance and develop preventive medicine in the field, Wam reports. The partnership will see the two companies launch one of the first companion diagnostics programs in the Gulf, which involves using tech to determine whether a patient qualifies for a certain treatment.

INFRASTRUCTURE-

Expanding water project in Tanzania: Suqia UAE and Emirates Red Crescent are drilling new artesian wells to provide clean drinking water to an additional 1 mn people in various regions and villages in Tanzania under the the UAE Water Aid Foundation initiative, according to the Dubai Media Office.

HOSPITALITY-

Mered taps HBA as interior designs partner for new Dubai tower: Dubai-based real estate developer Mered is partnering with American hospitality design firm Hirsch Bedner Associates (HBA) for the interior development of its Iconic Tower, it said on LinkedIn. The residential tower will offer some 310 apartment units in Dubai Internet City, and is slated for handover in 2Q 2027.

EDUCATION-

New index measuring AI in humanities: The University of Dubai and the Artificial Intelligence Journalism for Research and Forecasting have launched the Arab Index for Artificial Intelligence in Universities, according to a press release. The Index measures the integration of AI technologies into humanities and theoretical sciences across Arab universities through six indicators: curricula, professors, labs, student skills, and the scientific research index.

EU calls on China for reciprocal market access as cheap Chinese products flood the bloc

The EU is ready to face China head-on over cheap imports: President of the European Commission Ursula von der Leyen called on China to work towards a more balanced trade relationship with the European Union during her meeting with Chinese President Xi Jinping in Paris yesterday. Von der Leyen warned that “Europe will not waver from making tough decisions needed to protect its economy and security,” while China is restricting the bloc’s access to its markets and flooding Europe with heavily-subsidized Chinese products, according to a European Commision statement.

But China argues that a clampdown on its imports would harm the global green transition: China’s cheaper green technologies are necessary to further the energy transition, Xi Jinping's Special Envoy for Climate Change Liu Zhenmin told Bloomberg on Thursday. Backlash from the US and EU would result in a “delay in the substitution of fossil fuels by renewables globally,” Liu said, adding that energy transition costs would increase by up to USD 6 tn — equating to a 20% jump — without cheaper Chinese products and technology.

Remember: Tensions over green technology have been brewing for a while between China and the West over the oversupply of cheap solar panels and EVs from China, which has crowded US and European markets and threatened domestic production. The European Commission launched an investigation in September to consider imposing punitive tariffs on Chinese EV imports as a protection measure for local producers.

THE MARKETS THIS MORNING-

Asian markets are in the green this morning as traders in Korea and Japan returned from a long weekend. The sole exception is the Hang Seng. US stock futures were largely unchanged in overnight trading, while European futures are doing a bit better, pointing to a comfortable start to the trading day.

ADX	9,035	0.0% (YTD: -5.7%)
DFM	4,156	+0.3% (YTD: +2.4%)
Nasdaq Dubai UAE20	3,539	+0.4% (YTD: -7.9%)
USD : AED CBUAE	Buy 3.67	Sell 3.67
EIBOR	5.3% o/n	5.4% 1 yr
TASI	12,373	0.0% (YTD: +3.4%)
EGX30	26,114	+3.3% (YTD: +4.9%)
S&P 500	5,181	+1.0% (YTD: +8.6%)
FTSE 100	8,213	+0.5% (YTD: +6.2%)
Euro Stoxx 50	4,957	+0.7% (YTD: +9.6%)
Brent crude	USD 83.46	+0.6%
Natural gas (Nymex)	USD 2.19	+2.5%
Gold	USD 2,331.20	+1.0%
BTC	USD 63,476.20	-0.6% (YTD: +50.1%)

THE CLOSING BELL-

The ADX closed flat yesterday on turnover of AED 1.1 bn. The index is down 5.7% YTD.

In the green: Eshraq Investments (+5.1%), Palms Sports (+3.6%) and Al Seer Marine Supplies and Equipment (+3.3%).

In the red: GFH Financial Group (-5.4%), Gulf Medical Projects (-4.0%) and Gulf Cement (-3.8%).

Over on the DFM, the index rose 0.3% on turnover of AED 215.2 mn. Meanwhile Nasdaq Dubai closed up 0.4%.

CORPORATE ACTIONS-

#1- Agility subsidiary Agility Global approved a dividend payout of USD 130 mn for 2024, according to an ADX disclosure (pdf). The Kuwaiti logistics outfit Agility subsidiary will distribute USD 65 mn in 1H 2024, one month after listing on the ADX, with the remaining USD 65 mn paid out in the second half of the year.

ICYMI- The Kuwaiti logistics outfit’s operations and asset management subsidiary received approval from the Abu Dhabi Securities Exchange (ADX) to move forward with a technical listing on the Abu Dhabi bourse last week. Shares closed up 327% on their trading debut on the ADX.

#2- Al Yah Satellite Communications Company’s board approved an interim dividend distribution of AED 200.8 mn, according to an ADX disclosure (pdf). This brings the total dividend for the year to AED 401.6 mn.

#3- Real estate firm Manazel has tapped investment banking firm Houlihan Lokey to act as its financial advisor on its capital optimization plan, the developer said in an ADX disclosure (pdf).

UAE + New Zealand launch trade talks

The UAE and New Zealand are in discussions to sign an economic partnership and trade agreement, Wam reports. The agreement would cover sectors including agriculture, tourism, technology, logistics, education, healthcare, and renewable energy. The two countries have already conducted “exploratory discussions” and public consultations, and are now “eager to get started,” Trade Minister Thani bin Ahmed Al Zeyoudi said.

Foreign Minister Abdullah bin Zayed and his Australian counterpart Penny Wong discussed increasing bilateral cooperation, as well as ongoing regional tensions, Wam reports. They emphasized the importance of strengthening ties between the two nations in trade, investment, and security.

MEANWHILE- Ras Al Khaimah Ruler Sheikh Saud bin Saqr Al Qasimi met with Italian Tourism Minister Daniela Santanchè to discuss boosting cooperation on tourism and sustainable development, Wam reported.

CALENDAR

MAY

21 April-7 May (Sunday- Tuesday): The ICC Women's T20 World Cup Global Qualifier 2024.

5-10 May (Sunday-Friday): Sharjah Chamber of Commerce and Industry sends trade delegation to India

5-10 May (Sunday-Friday): Dubai International Chamber sends trade mission to Indonesia and Vietnam

6-7 May (Monday-Tuesday): Dubai Fintech Summit 2024, Madinat Jumeirah.

6-9 May (Monday-Thursday): The Arabian Travel Market, Dubai World Trade Centre, Dubai.

6-9 May (Monday-Thursday): The Arab Tourism Media Awards, Dubai International Convention and Exhibition Centre.

7-9 May (Tuesday-Thursday): AIM Congress 2024, Abu Dhabi.

8-9 May (Wednesday-Thursday): Innovative Finance Expo, Jumeirah Emirates Towers.

8-12 May (Wednesday-Sunday): Schmetterling Annual Conference, Al Ain and Abu Dhabi.

9 May (Thursday): Spinneys shares begin trading.

13-15 May (Monday-Wednesday): The Abu Dhabi Global Healthcare Week, Abu Dhabi.

14-15 May (Tuesday-Wednesday): Seamless Middle East, Dubai World Trade Centre.

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

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

15 May (Wednesday): HFM Summit, DIFC.

15 May (Wednesday): UAE and Indian officials are set to meet for the first time on the India-Middle East-Europe Economic Corridor.

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

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.

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.

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 sometime in 2028:

Abu Dhabi to host the 47th Chess Olympiad

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