Gov’t takes fresh USD 1.5 bn eurobond sale to market

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Gov’t sells USD 1.5 bn in eurobonds + Dubai’s property market is in for an “unprecedented” summer

Good morning, friends, and welcome to an uncharacteristically calm hump day. We say calm despite the big story of the day being a blockbuster USD 1.5 bn eurobond offering the government took to market yesterday amid strong investor demand — and the usual smattering of M&A news.

^^ We have these stories and more in this morning’s newswell, below.

WATCH THIS SPACE-

#1- Dubai’s property sector is expected to record an “unprecedented” USD 33 bn (c.AED 121 bn) in sales during the summer season, up 15-20% y-o-y from the 2023 summer season, according to real estate brokerage W Capital. “Dubai real estate sector sales are heading to unprecedented levels during the summer season. The market has reached maturity in recent years, so every summer season records higher sales than the one before,” W Capital CEO Walid Al Zarooni said.

It’s not just the summer: Dubai real estate is on track to post record sales in 2024, ranging between AED 450-500 bn, following the “historical” sales surpassing AED 400 bn last year. Over the first five months of 2024, the emirate saw property sales climb 25.4% y-o-y to AED 187 bn from some 66k transactions, a 30% y-o-y jump from last year.

SPEAKING OF DUBAI REAL ESTATE- Dubai-based Qube Developments plans to introduce AED 2.6 bn (USD 680.6 mn) worth of properties in the market by the end of 2025, according to a press release. Specializing in sustainable developments across 2.3 mn sqft in Dubai, they have already acquired 623k sqft of land.

#2- UBS taps 10 senior bankers from Deutsche Bank and HSBC: Swiss bank UBS tapped HSBC veteran Rana Al Emam (Linkedin) to assume responsibility for growing the business in Abu Dhabi, according to a press release picked up by Zawya. Al Emam is one of three senior bankers to join UBS from Deutsche Bank and HSBC to positions in the region as UBS looks to expand its wealth management team in MENA.

#3- There’s a new Abu Dhabi Family Business Index: Abu Dhabi’s Economic Development Department and the United Arab Emirates University launched a new index measuring performance metrics for family-owned and family-controlled businesses in Abu Dhabi, the Abu Dhabi Media Office reports. The index covers revenue, industry, employment, governance, leadership gender ratios, succession planning, longevity, and socio-economic impact.

#4- Drake & Scull board steps down ahead of general assembly: The board of Dubai-listed contractor Drake & Skull has resigned, calling for the election of new board members in its coming general assembly, according to a disclosure (pdf) to the Dubai Financial Market (DFM). The meeting is reportedly set to take place a month from now, according to Zawya.

ICYMI- The company returned to the DFM on 29 May, after being suspended from trading in November 2018 due to excessive financial losses and reporting violations. An ambitious restructuring plan has been underway, which seeks to write off 90% of its debt and issue mandatory convertible sukuk. The company increased its capital to around AED 2.89 bn after raising AED 450 mn from shareholders last month.

UPDATE-

Indian Cement Manufacturer UltraTech is set to acquire an additional 25% stake in Ras Al Khaimah White Cement (Rak White Cement) — equivalent to 133 mn shares — after Rak White Cement shareholders accepted the sale offer, according to a company statement (pdf). The additional stake purchase comes after Ultratech revised the size of their offer from its original target of a 31% stake.

CLARIFICATION- The offering period closed on Monday after shareholders agreed to sell the stake to UltraTech before the original deadline, and was not extended until 26 July, as we suggested in yesterday’s issue.

ICYMI- Ultratech already owned a 29% stake in Rak White Cement, which it acquired in 2022 as part of their plan to expand the cement manufacturer’s operations locally and globally, and to introduce new products to Rak Cement’s production portfolio.

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THE BIG STORY ABROAD-

An eclectic mix of stories is playing out across the front pages of the global business press, with coverage of the EU’s latest bid to “tame” big tech playing out alongside stories about Volkswagen, Citigroup, and the prospect of war in Asia.

The Financial Times is going all-in with its coverage of how European Union regulators are looking to bring Big Tech to heel. Earlier this week, the bloc accused Apple of breaking so-called “gatekeeper rules”, for which they’re threatening to fine the company up to 10% of its global revenues. Yesterday, they went after Microsoft with antitrust violations over Teams.

Those are just the latest charges the EU has levied against big US tech firms, and Apple is sending a message of its own: The company is delaying the rollout to users in the EU of a bunch of new features in the new iOS due out this fall — including Apple Intelligence — because of uncertainty about how the EU will view them under the Digital Markets Act.

A must read for those of you who want to go deeper: What are the battle lines between the EU and Big Tech?

MEANWHILE- Volkswagen is getting prominent front-page play in the FT, the Wall Street Journal, and Handelsblatt after saying it will invest up to USD 5 bn in EV maker Rivian and the FT says time is running out for Jane Fraser’s turnaround bid at Citigroup.

CLOSER TO HOME:

The Israeli military must start drafting ultra-Orthodox Jews, the country’s supreme court has ruled. (New York Times)
Rioters protesting taxation in Kenya tried to storm the country’s parliament. Five have so-far been killed in clashes with police. (Reuters)

JUST WHAT WE NEED: Another regional war. The Philippines’ ambassador to Washington, Jose Manuel Romualdez, has for months been beating the drum about the prospect that conflict with China over a reef in the South China Sea could in turn spark a regional war. He’s previously talked up the idea with the Japanese press, and President Ferdinand Marcos Jr. recently said in a speech that it won’t start the war — but “won’t be intimidated” by China, either. The Financial Times has since lined up its own interview with Romualdez, and it’s getting front-page play this morning.

UAE sells USD 1.5 bn in first eurobond issuance since September

The UAE sold USD 1.5 bn-worth of eurobonds in its first sale of the paper since September, Bloomberg reports, citing people familiar with the matter. The issuance was 3.8x oversubscribed, with investors reportedly submitting bids for more than USD 5.75 bn, the business information service says.

About the issuance: The USD-denominated eurobonds were sold at 60 bps above US Treasuries, after the sale drew in significant investor interest. The Finance Ministry had initially guided on a spread of 90 bps over Treasuries, Reuters had reported earlier.

While the UAE could do without the funds, the debt sale “could be aimed at improving liquidity in the debt curve,” Zeina Rizk, co-head of fixed income at Amwal Capital Partners in Dubai told Bloomberg. Investors are likely to keep trading the bonds if the issuer has “plenty” of outstanding debt maturities, making the bonds “remain in the market, to keep the curve liquid.”

REMEMBER- Last April, Abu Dhabi sold its first eurobond issuance in three years, raising around USD 5 bn in one of the biggest emerging market transactions of the year.

The UAE is a top-rated issuer, holding an Aa2 credit rating from Moody’s and an AA- rating from Fitch with a stable outlook from both agencies.

ADVISORS- Credit Agricole, Emirates NBD Bank, First Abu Dhabi Bank, HSBC Holdings, JPMorgan Chase & Co. and Standard Chartered acted as arranging banks on the issuance, according to Bloomberg.

e& enterprise to acquire 100% of Turkey’s GlassHouse

Emirates Telecommunications Group’s (e&) e& enterprise is acquiring 100% of Turkey-based cloud services provider GlassHouse for USD 60 mn, according to an ADX disclosure (pdf). The transaction will be carried out through debt financing, and is structured on a cashfree, debtfree basis.

The move coincides with e& enterprise’s push to scale operations, ramp up digital capabilities, and expand globally. The acquisition is subject to customary closing conditions.

About GlassHouse: GlassHouse is a leading provider in Turkey for data backup, business continuity, managed cloud, and SAP Infrastructure services, serving some 2k enterprises across banking, technology, telecommunications, public services, aerospace, and defense sectors. The company has offices in Turkey, Qatar, and South Africa.

What’s next? GlassHouse’s financials will be consolidated into e&'s post-acquisition, with the impact on e&'s financials expected to be insignificant but will be EPS accretive, the disclosure reads. GlassHouse generates more than 80% of its revenue in USD.

Bond Investments Limited snags Uzbekistan-based Poytakht Bank for USD 10 mn

Das Holding subsidiary Bond Investments is set to acquire 100% of Uzbekistan-based Poytakht Bank from Uzbekistan's State Assets Management Agency (UzSAMA) for USD 10 mn, subject to approval from the Central Bank of Uzbekistan, according to a statement.

Bond Investments’ bid stood out: The investment firm’s offer “exceeds both the purchase price offer received from other bidders and the appraised value previously calculated by an independent appraiser,” the statement says. UzSAMA had terminated a previous agreement with Russia’s Expobank for the transaction over geopolitical constraints.

What’s next? Bond Investments Limited — known for establishing successful banks, including Islamic and digital banks — plans to modernize Poytakht Bank with advanced mobile and digital financial technologies. The investment firm has drafted a comprehensive development plan to upgrade the bank's infrastructure.

The sale comes as a “new Uzbekistan” looks to privatize some 620 state-owned enterprises and attract foreign investment under Uzbekistan’s President Shavkat Mirziyoyev’s reform agenda. The national plan — which was launched in 2020 — aims to transition Uzbekistan to a market-driven economy. It has so far privatized Ipoteka Bank in 2022 and the Coca-Cola bottling plant by the Turkish CCI Group in 2021.

Advisors: Deloitte oversaw the tender and led the evaluation process for UzSAMA, while KPMG was the bank’s independent appraiser.

CBUAE to attract fintechs with regulatory sandbox

Fintech companies now have their own sandbox: The CBUAE introduced the Sandbox Conditions Regulation, which allows fintech players to trial new businesses, offerings, or services prior to their official launch, according to a statement (pdf). The sandbox offers fintechs and startups a lenient regulatory setting to experiment with their business models or products, with the goal of attracting more startups to set up operations in the UAE. The introduction of the sandbox looks to boost competitiveness and contribute to the economic growth of the UAE, the central bank said. The guidelines came into effect following their publication in the Official Gazette.

The conditions: The regulatory sandbox outlines the criteria that fintechs and startups need to fulfill in order to test their products without needing a license. This trial period is subject to specific conditions, which include the requirement for participating businesses to introduce a new financial product or service that will either cater to the industry or provide benefits to consumers. The regulations state that applicants must make their product or service available to a broader customer base in the UAE once they exit the sandbox.

What was said: “By providing a structured platform for experimentation, we are encouraging innovators to contribute positively to the wider economy and participate actively in Sandbox Conditions Regulation, whilst ensuring consumer protection and achieving the interests of all stakeholders,” CBUAE Governor Khaled Mohamed Balama said.

Apicorp records 51% income growth in 2023

Arab Petroleum Investments Corporation (Apicorp) saw its net income rise 51% y-o-y to USD 225 mn (AED 826 mn) in FY 2023, according to its financial statements (pdf). Total assets also increased to USD 9.9 bn (AED 36 bn), marking a 23% y-o-y increase compared to 2022.

MBRSG gets a Board of Trustees

Dubai Crown prince forms board for MBRSG: The Crown Prince of Dubai Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum formed a board for the Mohammed Bin Rashid School of Government (MBRSG), to be chaired by the director-general of the Dubai Government Human Resources Department. Wam reports.

The board will include representatives from: The General Secretariat of Dubai Executive Council and the Dubai Digital Authority, with Tayeb Amanullah Mohammed Kamali, Raja Mohammed Al Mazrouei, and Yasar Farouk Jarrar appointed as members, alongside the MBRSG CEO.

Microsoft’s USD 1.5 bn investment in G42 hailed as a positive development

The White House is pleased with Microsoft’s USD 1.5 bn investment in IHC-backed G42 as it led to G42 cutting ties with China’s Huawei, Reuters reports, citing White House technology advisor Tarun Chhabra. Chhabra praised the investment as a “positive development and one that [the US wants] to encourage,” set against the UAE and the Middle East rising as a prominent player in what the news outlet dubs the “tech war between the United States and China.”

REMEMBER- G42 has offloaded its stakes in all its investments in China, reportedly in a bid to appease US partners, and there were suggestions it could also give up its use of Huawei telecom equipment.

Comfi secures USD 5 mn debt facility for B2B payments expansion in UAE and KSA

FINTECH-

#1- B2B payment platform Comfi secured a USD 5 mn debt facility from an Abu Dhabi-based private family office, Wamda reports. Comfi plans to use the financing to facilitate USD 40 mn in transactions across the UAE and KSA in the coming year. The financing will also support Comfi’s expansion of its payment solutions for B2B supply-chain businesses, offering real-time credit terms for a maximum of 90 days to customers.

#2- Dubai-based fintech startup Pyypl will issue virtual and prepaid Visa cards after receiving principal license membership from Visa, according to a press release. The license will allow the digital wallet to issue the cards to its customers via its application. Additionally, Pyypl inked a partnership agreement with Visa aimed at accelerating its international expansion, “[grow] Pyypl’s presence, and [contribute] to advancing financial inclusion across the region,” Pyypl CEO Antti Arponen said.

BANKING-

Ajman Bank customers will now be able to use their Jaywan cards at the bank’s ATMs after the bank completed the integration of the central bank-backed card into its network, according to a press release picked up by Zawya.

REMEMBER- Jaywan cards — which were introduced by the central bank’s digital payments arm Al Etihad Payments earlier this month — are being rolled out in stages among local banks as policymakers target to replace some 10 mn debit cards in circulation over the next two and a half years.

EVs-

Vietnam-based EV manufacturer sets up HQ in Dubai: The Dubai International Chamber helped VinFast Electric Cars open its regional headquarters in Dubai’s Jebel Ali Freezone through a series of stakeholder meetings, according to the Dubai Media Office. VinFast has dealer agreements in the UAE and Oman, with future plans to expand its product line in the region.

EDUCATION-

Education provider Taaleem Holdings is set to open its new Dubai British School Jumeira and welcome students for the new 2024-25 academic year after receiving a certificate of completion, a DFM filing (pdf) reads. The new school can accommodate 1.9k students, but already has a waitlist “due to its high demand.”

MANUFACTURING-

Ta’ziz + Mitsui break ground on Al Ruwais ammonia plant: The construction of the 1 mn ton-per-year green ammonia plant in Al Ruwais Industrial City has commenced, led by Japan’s Mitsui & Co alongside Adnoc and ADQ's joint venture Ta’ziz, UAE-based Fertiglobe, and Korea's GS Energy Corporation, Reuters reports. The plant will be equipped with CO2 capture and storage facilities, aiming to start clean ammonia production by 2030.

The details: Mitsui will source clean ammonia from the new plant to supply Japan and other Asian markets for fuel, chemicals, and fertilizers, the newswire writes. The Japan Bank for International Cooperation and Sumitomo Mitsui Banking Corp have provided the Japanese company a USD 27 mn loan to finance the project.

STARTUPS-

Du, DIFC to roll out workshops for startups: Telecom operator du has teamed up with the Dubai International Financial Center’s Innovation Hub to launch an educational program — dubbed du Business Entrepreneurship Programme — to help startups and SMEs scale up their businesses, according to a statement. Workshops in the program will focus on digital literacy, communication, marketing, cybersecurity, and AI integration, the statement read.

HEALTHCARE-

Smart Salem introduces gut health tests: Smart Salem, a joint venture for medical tests and screening by Dubai Health and French Klea Holding, is now providing tests for gut microbiome, according to a statement picked up by Zawya. The AI-powered test uses whole-genome shotgun metagenomic sequencing and is priced at AED 2.5k.

TRANSPORT-

Dubai is getting its first hydrogen bus: Swaidan Trading Company will supply Dubai with its first eco-friendly hydrogen bus under an agreement it inked with the Roads and Transport Authority (RTA) on Monday, according to a statement from the authority.

SPACE-

Dubai Aerospace sees its credit rating upgraded by Moody’s: Moody’s has upgraded the long-term issuer rating of Dubai Aerospace Enterprise (DAE) to Baa3 from Baa2 while revising its outlook on the aviation services company to stable from positive, according to a statement (pdf) from Moody’s. The upgrade reflects the company’s strong liquidity, diverse funding sources, solid operating results, and low debt-to-equity leverage, the credit rating agency said.

E-COMMERCE-

Network International + Reem Finance partner to streamline UAE card transactions: Digital payments company Network International inked a strategic partnership with financial services provider Reem Finance to integrate its payment processing solutions, according to a press release. This collaboration aims to streamline card transactions for both the consumer and commercial sectors in the UAE. The integrated solutions will encompass Network International’s transaction processing, card hosting, management, and value-added services.

TECH-

Sharjah and China to ramp up tech cooperation: Sharjah Economic Development Department Chairman Hamad Ali Abdalla Al Mahmoud met with a delegation from China’s Huawei Technologies Co yesterday to discuss boosting collaboration and institutional knowledge sharing in modern technology, Wam reports. The meeting focused on establishing digital development strategies, innovative programs, and systems to bolster Sharjah's economic position, with Huawei presenting its latest technological solutions for potential implementation.

EM just had the busiest day of the year on the bond market

Emerging markets poured into the debt market yesterday with a flurry of bond issuances, as sovereigns look to capitalize on what is “an opportunistic time” for debt markets as interest rates dip this month, Bloomberg reports. Yields on 10-year US Treasuries are down more than 10 basis points this month, with markets expecting the US Federal Reserve to start winding down its monetary tightening sooner rather than later after May figures showed US inflation beginning to cool. “Now is the calm before further external factors come into play,” Oren Barack, managing director of fixed income at New York-based Alliance Global Partners, tells the business information service.

Who’s tapping the market: Four countries — the UAE, the Dominican Republic, Indonesia, and South Korea — all tapped the market yesterday, making it “one of 2024’s busiest days.”

EM debt markets already came out the gate strong at the start of 2024, with the first four days of the year seeing USD 24.4 bn worth of issuances, making it the “busiest start to a year on record for USD- and EUR- denominated debt issuance out of developing nations,” the business information service said at the time. The momentum has been sustained in the months since, with some USD 300 bn of hard currency debt from EM sovereign and corporate issuers going to market year-to-date, rising c.30% y-o-y.

MARKETS THIS MORNING-

Asian markets are mixed in early trading this morning, with the ASX 200, Hang Seng, and Shanghai Composite all in the red and the Kospi and Nikkei both in the green. US stock futures are largely unchanged in overnight trading after the S&P 500 and Nasdaq Composite each ended three-day losing streaks yesterday. Futures point to a mixed open in Europe later this morning.

ADX	9,002	-0.2% (YTD: -6.0%)
DFM	3,999	0.0% (YTD: -1.5%)
Nasdaq Dubai UAE20	3438	+0.3% (YTD: -10.5%)
USD : AED CBUAE	Buy 3.67	Sell 3.67
EIBOR	4.8% o/n	5.4% 1 yr
TASI	11,731	+0.3% (YTD: -2.0%)
EGX30	27,264	+1.3% (YTD: +9.5%)
S&P 500	5,469	+0.4% (YTD: +14.7%)
FTSE 100	8,248	-0.4% (YTD: +6.7%)
Euro Stoxx 50	4,936	-0.3% (YTD: +9.2%)
Brent crude	USD 84.94	-1.2%
Natural gas (Nymex)	USD 2.76	-2.0%
Gold	USD 2,331.60	-0.6%
BTC	USD 61,875.30	+4.0% (YTD: +46.4%)

THE CLOSING BELL-

The DFM fell 0.04% yesterday on turnover of AED 305.6 mn. The index is down 6% YTD.

In the green: AL Salam Sudan (+12.8%), Watania International Holding (+6.2%) and Orascom Construction (+2.9%).

In the red: Sukoon Takaful (-3%), National Central Cooling Co. (-2.9%) and Al Salam Bank (-2.5%).

Over on the ADX, the index closed down 0.2% on turnover of AED 1 bn. Meanwhile Nasdaq Dubai closed up 0.3%.

CORPORATE ACTIONS-

Adnoc Drilling announced a new dividend policy to increase dividends by at least 10% annually over the next five years (2024-2028), aiming for a total yield of over 27%, a press release reads. Adnoc’s board may also approve extra dividends based on cash flow and growth opportunities. Dividends will be paid semi-annually, with final payments in the first half and interim payments in the second half of each fiscal year.

Assistant Foreign Minister promotes responsible cyberspace at UN Security Council

UAE's assistant foreign minister calls for responsible cyber behavior at UN Security Council: Assistant Foreign Minister of Advanced Science and Technology Omran Sharaf highlighted the UAE’s efforts to promote responsible behavior in cyberspace at the UN Security Council, Wam reports. Sharaf urged the Security Council to prioritize international law in cyber technology, integrate cyber concerns into peace efforts, hold annual briefings on emerging technology threats, and foster strong public-private partnerships against cyber threats.

Abu Dhabi Fund director-general leads Arab coordination meeting for sustainable development: Abu Dhabi Fund for Development Director-General Mohammed Saif Al Suwaidi headed the latest annual meeting of the Arab Coordination Group in Vienna, Austria, focused on ramping up collaboration to support sustainable development goals across member countries, Wam reports. The meeting focused on reviewing strategies for addressing economic challenges, social issues, climate change impacts, and food security, with tocopics including infrastructure, healthcare, food security, and clean energy initiatives in developing countries.

CALENDAR

JULY

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

AUGUST

3 August (Saturday): UFC Fight Night, Etihad arena, Abu Dhabi.

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

Signposted to happen sometime in mid-August:

New regulations around telemarketing calls will go into effect

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

15 October (Tuesday): Deadline for the European Commission to make a decision on its probe into e&’s acquisition of PPF’s Eastern European assets.

24-27 October (Thursday-Sunday): International Sports Medicine Conference, Dubai.

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

29 October - 2 November (Tuesday-Saturday): Abu Dhabi Early Childhood Week, Abu Dhabi.

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.

18-20 November (Monday-Wednesday): Fastmarkets Middle East Iron & Steel 2024, Dubai.

23 November (Saturday): Wireless Festival Middle East, Etihad Park, 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.

8-12 December (Sunday-Thursday): International Desalination and Reuse Association World Congress, Adnec Centre Abu Dhabi.

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

9-12 December (Saturday-Thursday): Abu Dhabi Finance Week, 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-Wednesday): Make-A-Wish International’s Global Wish summit, Abu Dhabi.
TBD: The Middle East Electric Vehicle Show, Expo Center Sharjah.

Signposted to happen sometime in 2028:

Abu Dhabi to host the 47th Chess Olympiad

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