Post-COP comedown

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WHAT WE’RE TRACKING TODAY

Mubadala, Aldar, Ares set up USD 1 bn real estate fund + Sayonara, COP28

Good morning, ladies and gentlemen, and welcome to the post-COP calm as we slide towards this very well-deserved weekend.

SPEAKING OF COP- We’re unpacking the final text of the Global Stocktake that was approved yesterday morning in this morning’s news well, below.

THE BIG STORY here at home is news that Mubadala, Aldar Properties, and investment management player Ares are setting up a USD 1 bn real estate fund with an eye on real estate investments in the UK and Europe.

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Abu Dhabi is keeping an eye on drivers: The Abu Dhabi Police launched an automatic radar system, dubbed “ EXIT I,” to monitor compliance with traffic rules across the Emirate. The solar-powered cameras will be on surveillance for violators overtaking at forks in the road, causing traffic obstruction, and entering in front of other vehicles at entrances.

WATCH THIS SPACE- Sphere, Abu Dhabi edition? New York Knicks and New York Rangers owner James Dolan is reportedly in “serious” discussions with Abu Dhabi investors to construct a second Sphere arena in the emirate, The New York Post reports. The b’naire is currently embroiled in a USD 225 dispute over his Las Vegas venue, but is reportedly moving forward with the talks. Previous plans to build Sphere arenas in Saudi Arabia and South Korea have faced setbacks. London‘s Mayor Sadiq Khan criticized the proposed Sphere in East London, calling it “bulky, unduly dominant and incongruous.”

Ravi Uppal, owner of the Mahadev online gambling app, was detained in Dubai following an Interpol red notice, at the request of India's Enforcement Directorate's (ED), reports Business Today. Uppal is currently being investigated by the ED, Chhattisgarh Police, and Mumbai Police, over suspected involvement in laundering and illicit gambling activities.

KUDOS-

The UAE has set up three desalination plants in Egypt’s Rafah to provide Palestinians access to clean water, according to WAM. The UAE’s permanent representative to the UN, Lana Nusseibeh, inaugurated the plants alongside representatives from UN Security Council member states as part of the Noble Knight 3 initiative to address the humanitarian crisis in Gaza. The three new facilities, processing 600k gallons of seawater daily, will provide clean drinking water to 300k Palestinians across Gaza through a pipeline network.

The UAE secured second place in energy transformation in the Global GreenFuture Index 2023. VP and PM Sheikh Mohammed Bin Rashid Al Maktoum said the UAE will invest another USD 50 bn into the sector over the next decade.

Dubai Police will donate over 7k electronic devices to underprivileged students, with the handover scheduled to go down over the next three years, according to a media release.The Donate Your Own Device (DYOD) campaign was launched in August by the Digital School and the Emirates Red Crescent (ERC), with the aim of repurposing devices to reduce barriers to digital equality worldwide. The campaign aims to collect 10k items for educational refurbishment.

Digital School’s vision: Digital School was launched by Mohammed bin Rashid Al Maktoum with the plan to reach 1 mn students by the end of 2026. The initiative has contributed to over 90k windows for digital learning in eight countries.

FED WILL PIVOT TO RATE CUTS

Fed signals pivot to rate cuts, sparking market rally: Federal Reserve chair Jerome Powell said on Wednesday that the US central bank’s tightening cycle is “likely at or near its peak,” and that officials are now discussing the prospect of lowering interest rates from their current 22-year high, Financial Times reports. As expected, the central bank held the fed funds rate unchanged at 5.25-5.5% in the wake of inflation data that showed price growth moving closer to the 2% target in November, despite indications of persisting underlying pressures.

Fed officials penciled in no further rate hikes in their projections — the first time they’ve done so since March 2021, boosting traders’ predictions of a reduction in March to “a near certainty,” according to Bloomberg.

Officials expect to lower rates by 75 bps in 2024, and expect them to fall to 3.5-3.75% by 2025, according to the Fed’s “dot plot” (pdf). This is a bigger drop than analysts expected, as a recent poll saw economists predicting that the Fed would only trim rates by half a percentage point or less in 2024.

What analysts said: “His presser certainly had a tone of finality to it,” one economist told Bloomberg. “Jerome Powell seems to be done taking the punch bowl away,” said another. “It’s a big change in the language that indicates policymakers see less need to aggressively tighten.”

Cue huge market rally:

US stocks rallied: The Dow Jones closed at a record high of 37k, while the benchmark S&P 500 gained 1.4% to close at its highest level since January 2022.
Bond yields tanked: The two-year treasury yield recorded its biggest daily fall since the collapse of Silicon Valley Bank in March.
Gold popped: The precious metal gained 2.7%.
The greenback fell: The USD fell to a four-month low.
BTC spiked: The cryptocurrency jumped as much as 4% to more than USD 43k.

OIL WATCH-

The US Energy Information Administration lowered yesterday its forecast for the average price of Brent crude in 2024 to USD 83 per barrel. That’s USD 10 / bbl lower than its forecast last month. The revised forecast comes as US producers continue to boost output.

Oil stockpiles at Port Fujairah dipped to an eleven-week low, falling 10% week-on-week in the week ending on 11 December, which brings the total stockpile down by 19% in 2023, following a 29% increase recorded in the previous year, according to S&P Global. However, oil exports, excluding fuel oil, experienced a 10% m-o-m increase reaching 344k barrels per day in December.

CIRCLE YOUR CALENDAR-

The world’s first angel investor summit, Super Angels, is coming to the Abu Dhabi Center this Friday and Saturday. The summit runs from 8am to 5pm on both days.

Also on this weekend: Ahlam and Assala are playing at Dubai’s Coca Cola Arena this Friday night.

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

Mubadala, Aldar, Ares join forces to create USD 1 bn real estate fund

Mubadala Investment Company, Aldar Properties, Ares Management set up a USD 1 bn private real estate fund to purchase real estate in the UK and Europe, with the funds set to be invested over the next three to five years, according to a press release. Mubadala holds a 50% stake of the fund, while Aldar holds 30% and Ares holds the remaining 20%.

Aldar will also invest USD 100 mn into the Ares European Real Estate Debt strategy, set up by Mubadala and Ares in 2021, focusing on senior secured debt. The strategy is expected to upsize to USD 2 bn in capital from Mubadala, Aldar, and Ares, with the total capital available for the strategy expected to be over USD 5 bn.

What Aldar said: “This partnership between Mubadala, Ares, and Aldar is wholly unique, blending financial strength, a proven track record and in-depth knowledge of the real estate sector and asset classes. It is an ideal opportunity in terms of timing to gain both high quality exposure to a key asset class and a solid foothold in a market that is not only scalable but that also offers favorable risk-adjusted returns through market cycles,” said Talal Al Dhiyebi, Aldar’s Group CEO.

What Mubadala said: “Mubadala has strong and strategic relationships with both Ares and Aldar, and this new platform leverages the collective strengths of each party to invest in the private real estate credit market in the United Kingdom and Europe. This collaborative approach reflects our shared commitment Mubadala Classification: Internal Classification : External General Purpose to identifying and capitalizing on unique investment opportunities that deliver sustainable, long-term returns,” said Omar Eraiqaat, Deputy CEO of Disruptive Investments

at Mubadala.

What Ares said: “The global [chance] for flexible private real estate lenders continues to grow as we see ongoing retrenchment of traditional sources of capital…Our most recent investments reflect our ability to step into complex situations and provide flexibility up and down the risk/return spectrum at scale. We look forward to further pursuing attractive lending opportunities and executing on our debt investment strategy in Europe alongside Mubadala and Aldar,” said Ares’ Head of European Real Estate Debt, Phil Moore.

About Ares: A global investment manager with approximately USD 49 bn in real estate assets, Ares has initiated and closed over USD 1.2 bn in European real estate loans since its launch in January 2022.

ICYMI: Aldar recently acquired UK developer London Square for AED 1.07 bn, in its first foray outside the MENA region, according to a press release.

The story also got ink in the foreign press:Bloomberg | The Business Times

COP8’s adopted text sees nations agreeing to “transition away” from fossil fuels instead of phase out

Recapping COP28’s approved text: Following two weeks of negotiations that ran into overtime, the representatives of the 198 participating countries at COP28 signed the final document of the Global Stocktake (pdf) yesterday morning shortly after we hit send on our last issue, according to a statement. The final document underwent several changes in wording and targets, so let’s unpack what the revisions mean.

The approved text to the “beginning of the end”: The final agreement marks the first time in the summit's history to see fossil fuels directly addressed in the final text. The revised text called for “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner,” which was hailed as “the beginning of the post-fossil era,” the EU chief Ursula von der Leyen said.

Not a phase out, buta transition: Despite sidestepping a total phase out — which over 100 countries had been rallying for — the final text was able to drop the optional language of suggested changes, but it came at the expense of a more diluted version calling on “transitioning away” from fossil fuels. The text also called for the phase out of “inefficient fossil fuel subsidies that do not address energy poverty or just transitions, as soon as possible.”

Coal is here to stay: While the text kept the phasedown of coal as a goal, the adopted agreement skipped out on a date to achieve this phasedown or specific targets as to how this phasedown could come about. It also left a caveat for new coal-power generation projects.

But we have a more defined goal for methane: The text called for “accelerating and reducing” methane emissions by 2030 without stating by how much. This current goal is a slight regression from the goals in the previous drafts that called for reducing methane by 30% by 2030 and by 40% by 2035.

OVER ON THE FINANCE FRONT-

Loss and damage is now a matter of finance: The now operational Loss and Damage Fund was moved to the section under finance, where other climate finance mechanisms and funds are mentioned. Despite the significant official recognition of the fund as a means of finance, the section of the fund did not address the developed countries obligations nor the scale of the required loss and damage which is estimated to be over USD 400 bn annually. The section also did not refer to prioritizing funding for local communities, nor did it mention human rights, gender-responsiveness, the rights of Indigenous Peoples, youth and children.

The financing provisions fall short: The text’s stance on climate finance is “worrying” as it fell short of demanding developed countries commit to “provide public, new and additional, grant-based concessional finance,” ACT Alliance Climate Justice lead Julius Mbatia said, referring to the text’s exclusion of language that places responsibility on developed countries. The adopted text also excluded two paragraphs in previous drafts on “taking into account the priorities and needs” of vulnerable countries and ensuring that all finance flows are in line with the Paris Agreements. “The missing element, however, was a clear financial package for countries embarking on their energy transition as well as clarity about how to fill the adaptation finance gap,” E3G Senior Policy Advisor Laura Reyes said.

UAE economy to grow 4.8% in 2024, ICAEW says

ICAEW sees GDP growing 2.4% this year: The economy is expected to grow 2.4% in 2023, slowing from the 6.6% growth registered in 2022, “amid a drag from the oil sector,” the Institute of Chartered Accountants in England and Wales (ICAEW) said in a report yesterday. The country’s GDP growth came in at 3.7% in 2Q 2023 “owing to the strong non-oil sector, with high-frequency indicators highlighting ongoing resilience.”

But next year will see growth doubling: ICAEW sees GDP growth accelerating in 2024 to register 4.8% as oil production cuts, which are having a short-term downside impact on growth, will begin to “unwind through 2024.”

These figures don’t quite match other projections: Last month, the World Bank said in its Gulf Economic Update that the economy will grow 3.4% this calendar year before picking up slightly to 3.7% in 2024.

Growth will be underpinned by non-oil economy + positive fiscal outlook: With the government working on expanding non-oil growth, ICAEW sees logistics, technology, infrastructure and finance as being “among the key beneficiary sectors.” The country has a positive fiscal outlook, with expectations of maintaining a fiscal surplus of more than 5% annually over the next few years, ICAEW said. While the fiscal surplus breached 9% of GDP in 2022 on the back of higher oil revenues, “the strong non-oil sector growth has underpinned an alternative, less volatile revenue stream, with streamlined tax services enabling more effective collection and monitoring.”

Integrated mobility solutions EasyLease acquires 60% stake in Ripe

Mobility solutions player EasyLease acquires a 60% stake in Ripe: The International Holding Company (IHC) subsidiary obtained a 60% of Ripe, which offers various services including container and commercial kiosk rentals, food trucks, management of parking facilities, events management and drive-through services, according to a press release.The value of the transaction was not disclosed.

The move is in line with EasyLease’s plan to broaden its presence in the mobility sector. The partnership enables the company to expand its range of services and explore new avenues for expansion, both domestically and internationally, particularly in the GCC.

About EasyLease: The Dubai-based integrated mobility solutions provider has a fleet of over 25k vehicles, catering to various industries including e-commerce, delivery, logistics, courier, and food service.

UAE X: Can’t fly, won’t fly

By far the most important thing in X-land is the hashtag, #طيران الامارات or (Emirates Airlines) receiving a cocktail of both praise and bother. Some tweets voiced their anger over a grounded flight that kept passengers at DXB for 5 hours, while others were singing the company's praises, informing the Twitterverse of the perks of booking a “My Emirates Pass” ticket.

Yesterday was also a stream of UCL matches: The most searched on X was باريس# following Paris Saint Germain's 1-1 draw with Borussia Dortmund. Football fiends will also notice ميلان# for AC Milan’s 2-1 victory over the KSA owned Newcastle United.

UAE in the News on 14 December 2023

COP28 continued to lead the conversation on the UAE in the international press after the Global Stocktake was approved yesterday following 40 hours of deadlock. We have the recap in this morning’s news well, above. (BBC | Reuters | The Guardian)

CBUAE joins Gulf Payments System AFAQ

PAYMENTS-

CBUAE links up with GPC's AFAQ:The Central Bank of the UAE (CBUAE) has joined Gulf Payment ’s (GPC) AFAQ, a platform that integrates payment systems across GCC countries, facilitating real-time financial transactions in local currencies within the region, with the added benefit of low fees, according to a CBUAE press release. Barclays Bank also joined AFAQ, making it the first financial institution based in the UAE to jump on the bandwagon.

DISTRICT COOLING-

First Abu Dhabi cooling as a service (CaaS) project: Aldar and Johnson Controls are teaming up for a pilot CaaS project in Abu Dhabi that is expected to cut cooling-related carbon footprints by up to 30% (or 26,880 tons) over the next 10 years, according to a press release. The service-oriented model targets Aldar assets, Al Rayyana Complex and Eastern Mangroves, with plans for Johnson Controls to upgrade the developments’ cooling equipment with energy conservation measures outsourced by Aldar. The CaaS scheme will be the largest in the UAE.

About the partners: Emirati real estate developer Aldar has invested AED 140 mn in energy retrofit projects since 2022, with goals to offset over 55k tons of real estate emissions annually. Johnson Controls offers digital solutions and services that have boasted the sustainable performance of smart buildings across 150 countries.

CAPITAL MARKETS-

Emirates Driving is planning to double its capital to 179 mn by reducing its nominal share value to AED 0.5 from AED 1, according to an ADX filing. The additional capital will be distributed amongst the company’s shareholders in the event that the Securities and Commodities Authority (SCA) approves the capital increase.

HEALTHCARE-

AD Ports subsidiary KEZAD Communities and Burjeel Holdings will set up a healthcare clinic for residents of the Razeen 3 and 4 complexes, under an MoU the two sides signed, according to a press release. The clinic will offer comprehensive primary, emergency, and preventive care with a team of experienced general physicians. It will also feature a 24-hour ambulance service and round-the-clock nursing care. In emergencies, the clinic will facilitate referrals to Burjeel Holdings' network of hospitals.

HOUSING-

Sharjah’s Executive Council gave the greenlight for a third batch of housing support worth AED 373 mn, reports The National. Housing loans and grants will be dispersed to 550 Emiratis in Sharjah, financing the construction of homes, property extensions, and facilitating access to government housing.

HOSPITALITY-

Keep an eye out for Staybridge Suites Mina Al Arab: ADX-listed RAK Properties is expanding its collaboration with IHG Hotels & Resorts with the planned launch of Staybridge Suites Mina Al Arab, according to an ADX filing. The project will provide one and two bedroom apartments in a 14-storey tower, which will include a fitness center as well as dining areas.

There’s a debt crisis beginning to brew in frontier markets

Frontier markets are facing a growing debt crisis: Debt levels of the 42 countries classified as “frontier markets” by the Institute of International Finance (IIF) have doubled over the past decade, reaching a record USD 3.5 tn, writes Bloomberg. The debt covers government, corporate, and household borrowing, with USD 200 bn due to be repaid next year.

Inflows are harder to come by: The US Federal Reserve is not expected to cut interest rates until at least mid-2024, which has dampened investors’ appetite for frontier-market debt. “Global rates are considerably higher, and the incentive to invest in these markets is challenging when you can get 4% or 5% in US Treasuries,” IIF Managing Director Sonja Gibbs said.

Other business headlines worth knowing about this morning:

Tesla has recalled almost all 2 mn of its cars for a safety fix.
Argentina just devalued its currency by >50% under its new libertarian president.
SBF ’s lawyer thinks he was a very, very bad witness on cross-examination.

ADX	9,437	-0.1% (YTD: -7.6%)
DFM	3,939	+0.1% (YTD: +18.08%)
Nasdaq Dubai UAE20	3,939	+0.1% (YTD: -7.4%)
USD : AED CBUAE	Buy 3.67	Sell 3.67
EIBOR	5.1% o/n	5.6% 1 yr
TASI	11,401	+0.1% (YTD: +8.81%)
EGX30	24,774	+2.9% (YTD: +69.7%)
S&P 500	4,707	+1.4% (YTD: +22.6%)
FTSE 100	7,548	+0.1% (YTD: +1.3%)
Euro Stoxx 50	4,530	-0.1% (YTD: +19.4%)
Brent crude	USD 74.26	+1.4%
Natural gas (Nymex)	USD 2.35	+1.6%
Gold	USD 2,042.10	+2.5%
BTC	USD 43,000	+4.6% (YTD: +158.8%)

THE CLOSING BELL-

The DFM rose 0.1% yesterday on turnover of AED 287.52 mn. The index is up 18.1% YTD.

In the green: Al Salam Sudan (+6.4%), Ithmaar Holding (+4.1%) and Aramex (+3.8%).

In the red: Orascom Construction (-6.1%), Takaful Emarat (-5.8%) and Watania International Holding (-4.7%).

The ADX fell 0.1% yesterday on turnover of AED 1.10 bn. The index is down 7.6% YTD.

UAE and Czech Republic sign MoU to cooperate in Africa

The Czech Republic will work with the UAE to support the development of African countries’ energy, food security, health, and water management, after Minister of State Ahmed Ali Al Sayegh inked an MoU on Tuesday with the Czech Republic’s Deputy Minister of Foreign Affairs, Jiří Kozák.

UAE and Iraq to trade in AED: First Abu Dhabi Bank (FAB) and the Central Bank of Iraq agreed on Wednesday to finance trade and imports in Emirati dirham, according to Iraq’s state news agency. The banks also signed an agreement to move funding between their accounts, with the first transfer going through yesterday with five Iraqi banks.

Australia will initiate negotiations on a trade agreement with the UAE in 2024, Australia's Trade Minister,Don Farrell said in a ministry statement. The decision is part of Australia's strategy to broaden its export markets and reduce dependence on China. Negotiations with the UAE began after the collapse of trade talks with the European Union in October. Australia attributed the breakdown to inadequate market access for its agricultural products, Reuters reports."The Government is committed to securing a trade agreement with the UAE to drive Australian exports, economic growth and create more well-paying jobs across the country," Farrell said in the statement.

CALENDAR

DECEMBER

8 December-14 January: Dubai Shopping Festival, City wide.

13-15 December (Wednesday-Friday): ArabPlast 2023, Dubai World Trade Centre.

15-16 December (Friday-Saturday): Super Angels Summit, Abu Dhabi National Exhibition Centre.

2024

JANUARY

1 January (Monday): New years day, national holiday.

9-11 January (Tuesday-Thursday): Dubai International Pharmaceuticals and Technologies Conference and Exhibition, Dubai World Trade Centre.

9-11 January (Tuesday-Thursday): Gulf Print and Pack, Dubai World Trade Centre.

21-23 January: World of Coffee Dubai, Dubai World Trade Centre.

29 January- 1 February: Arab Health, Dubai World Trade Centre.

FEBRUARY

12-13 February (Monday-Tuesday): Breakbulk Middle East conference, Dubai Trade Centre.

12-14 February (Monday-Wednesday): Sustainable Aviation Futures MENA Congress, Hotel Dubai Mall.

7-8 February (Wednesday-Thursday): Sharjah Investment Forum, Al Jawaher Reception and Convention Centre.

26-28 February (Monday-Wednesday): Management and Sustainability of Water Resources, Marriott Hotel Al Jaddaf.

27-28 February (Tuesday-Wednesday): Dubai Association Centre Conference, Dubai World Trade Centre.

28-29 February (Wednesday-Thursday): Ras Al Khaimah Investment and Trade Summit, Rak Exhibition Centre.

28 February-1 March (Wednesday-Friday): MENA Transport Congress and Exhibition 2024, Dubai.

Signposted to happen sometime in February:

World Trade Organization Ministerial Conference, Abu Dhabi, UAE.

MARCH

5-6 March (Tuesday-Wednesday): MRO Middle East, Dubai Trade Centre.

5-7 March (Tuesday-Thursday): World Police Summit, Dubai World Trade Centre.

5-8 March (Tuesday-Friday): Forbes’ Third Annual 30/50 Summit In Abu Dhabi During International Women’s Day

12 March (Tuesday): Start of Ramadan, public holiday.

APRIL

11 April (Thursday): End of Ramadan, public holiday.

12 April (Friday): Eid Al-Fitr, public holiday.

16-18 April (Tuesday-Thursday): World Future Energy Summit, Abu Dhabi National Exhibition Centre.

16-18 April (Tuesday-Thursday): Middle East Coatings Show, Dubai World Trade Centre.

23-25 April (Tuesday-Thursday): Connecting Green Hydrogen MENA, Madinat Jumeirah Conference Centre.

MAY

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

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

JUNE

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.

JULY

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

SEPTEMBER

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

DECEMBER

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

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

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