Project awards slow down in the wake of the war

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Supply chain resilience is in focus + non-oil foreign trade hit AED 415.4 bn last year

Good morning, lovely people. We have a packed issue for you today, featuring positive signals and indications that the government is taking supply chain disruptions seriously, with a supply chain resilience program in the works.

Analysts are still digesting the UAE’s decision to exit Opec and Opec+, and the consensus is that more oil and gas investments are coming to the country, as well as a potential ramp-up in capacity that could lead to USD 40 bn in additional annual windfalls.

On a less positive front: Data from Meed shows project awards slowed in 1Q 2026 — and March in particular — as the regional conflict dampened sentiment and led to disruptions.

And in (very) good news for property owners: There’s now no floor for property investment to be eligible for a two-year visa.

WEATHER- Abu Dhabi’s seeing a 40°C high today as summer arrives early, while temperatures in Dubai will peak at 37°C. Both emirates will see lows of 26-27°C.

Rate watch

The Central Bank of the UAE kept interest rates unchanged, holding the base rate applicable to the Overnight Deposit Facility at 3.65%, it said in a statement (pdf). The CBUAE also left short-term borrowing costs unchanged at 50 basis points above the base rate. The decision to hold rates is in line with the US Federal Reserve’s move, which we have more on in the news well below.

Watch this space

SUPPLY CHAINS — There’s a “national supply chain resilience program” in the works, and while details are scant, the focus seems to be on “vital commodities” like food, medicine, and industrial goods, according to a statement.

The plan is to first identify which vital goods need to be secured, evaluate the feasibility of their production within the UAE, and then establish “strategic partnerships with partners capable of large-scale production and supply” — whether that’s the private sector or partner countries involved in their production. The plan also includes supporting local manufacturing and agriculture.

This comes as the blockade of the Strait of Hormuz continues to cause supply chain disruptions. Economy Minister Abdulla Bin Touq Al Marri had said (back in March) that the UAE has a stockpile of essential goods that should last it about four to six months. The UAE relies on imports for about 80-90% of its food.

It seems the strategy is already in its execution phase: UAE-based life sciences firm Arcera and China’s Fosun Pharma just signed an MoU to look into localizing biotechnology and working on R&D around radiopharma, small interfering RNA therapies, and cell and gene therapies. The partnership also involves collaborating on innovative solutions in the neuroscience field, with a focus on neurodegenerative diseases like Alzheimer’s.

AND- Food and fertilizer imports were apparently topics of discussion during a recent meeting between Russian Deputy Prime Minister Dmitry Patrushev and Vice President Mansour bin Zayed, Reuters reports. Patrushev said Russian domestic firms are “interested in ⁠further increasing exports to the UAE market not only of food products but also of mineral fertilizers.” Russia accounts for one-fifth of fertilizer exports — which are disrupted due to the blockade — and is the world’s largest grains exporter.

FINANCE — Dubai International Financial Center’s (DIFC) growth momentum is holding up despite global uncertainty, with 775 new firms setting up shop in 1Q 2026, up 62% y-o-y, according to Dubai Media Office.

The surprising stat? Growth accelerated in March, with 258 companies established in the month alone, up 59% y-o-y.

The inflows are spreading across segments: Financial services authorizations rose 21% y-o-y, while foundation registrations — a proxy for wealth structuring demand — more than doubled during the quarter, underscoring DIFC’s growing role as a hub for both institutions and family capital.

Who are some of the new tenants? Swiss asset manager Finreon and US-based multinational hedge fund Citadel are among those to have joined DIFC’s ranks since the start of the war.

Policy tailwinds are helping sustain that momentum: Regulators have rolled out support measures for DIFC firms amid the regional conflict, as the center pushes toward its ambition of becoming one of the world’s top four financial hubs.

REMEMBER- DIFC is scaling capacity to meet demand, with an AED 100 bn expansion plan set to add 17.7 mn sqft by 2040. Some 1.6 mn sqft of new commercial space is due to come online between 2026 and 2027.

BANKING — The National Bank of Ras Al Khaimah (Rakbank) is the latest player offering support measures during the regional conflict. The lender is priming around AED 2 bn in extra credit limits for customers, deferring repayment deadlines for clients and businesses, waiving fees on domestic transactions, and offering cashback for FX transfers, according to a statement.

ICYMI- SMEs have already been thrown a safety line from Emirates NBD, Dubai-based spend management platform Qashio, and Dubai South. More widely, authorities moved in late March to introduce an AED 1 bn package to cushion the blow to the private sector.

Data point

36% — that’s the y-o-y rise in Abu Dhabi’s non-oil foreign trade last year, reaching AED 415.4 bn, according to Abu Dhabi Media Office. The biggest rise came from non-oil exports, which were up 63% y-o-y to AED 175.4 bn in 2025, followed by imports, which saw a 22% yearly rise to AED 170.4 bn. Re-exports came in at AED 70 bn, up 20% y-o-y.

REMEMBER- Federal non-oil foreign trade topped USD 1 tn last year. The UAE is aiming to reach AED 4 tn in total foreign trade by 2031 and is already well on its way, having clocked AED 3 tn in total foreign trade two years ago. More recently, the Emirates was listed among the top 10 goods exports internationally, registering a trade surplus of AED 584 bn. The total value of goods and services traded hit AED 6 tn in 2025, with the Emirates’ ever-expanding Cepa network a major driver of growth.

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The big story abroad

Jay Powell’s final Fed meeting as chair was an unremarkable one, with the US central bank holding rates in line with market expectations. A divided Federal Reserve kept the policy rate in the 3.50%-3.75% range — four policymakers voiced their dissent, a level of division unseen since 1992. The bank cited persisting inflation and rising energy prices for the move, pointing to a “high level of uncertainty” stemming from the US-Iran war.

Powell may be stepping down as chair, but he’s not leaving the Fed just yet. After his term as chair comes to an end on 15 May, he will “keep a low profile as a governor” for an indefinite period, preventing President Donald Trump from clinching a majority on the Fed’s Board of Governors. Powell has expressed concern for the institution’s independence and transparency as he came under attack from Trump in recent months.

Who’s next? Trump-nominated Kevin Warsh will likely take on the mantle of chair in time for the Fed’s meeting in mid-June.

Meanwhile, in the tech world: AI startup Anthropic is reportedly exploring a new funding round that would propel its valuation beyond the USD 900 bn mark. If successful, the move would push the company’s valuation past that of rival OpenAI.

ALSO- The AI spending boom is alive and well. Tech giants Amazon, Google, Microsoft, and Meta poured around USD 130 bn into capital expenditures, with the lion’s share of that investment fueling data center infrastructure required to power AI.

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Oil watch

Adnoc sharply hiked the price of its flagship Murban crude for May, raising it to USD 110.75 / bbl from USD 69.45, Reuters reports. The move comes as crude benchmarks remain elevated due to the ongoing blockade of the Strait of Hormuz, with Brent crude climbing above USD 110 yesterday.

What does our exit from Opec mean for energy prices? Predictions roll in. US President Donald Trump believes the move will lower energy prices, Bloomberg reports. “It’s a good thing for getting the price of gas down, getting oil down, getting everything down,” Trump said.

Moscow agrees: Russia’s Finance Minister made a similar argument, saying that the exit will prompt the oil cartel to boost production, which will bring down energy prices in the future.

Others are less optimistic: Goldman Sachs predicts the exit will trigger greater upside risk to oil supply in the medium term, given that UAE crude production is set to reach 3.8 mn bbl / d by October 2026.

Brent hit a multi-year high overnight: The global benchmark surpassed the USD 120 per barrel mark in the early hours of the morning, briefly hovering at around USD 122 — its highest level since 2022 — before easing. This followed reports of a prolonged US naval blockade on Iran.

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Project awards slowed in March, but they didn’t screech to a halt

The regional war has led to a slowdown — but not a halt — in project awards in the UAE, with the number of contracts falling to 16 in March, down from 52 in February, according to Meed Projects data seen by EnterpriseAM. The value of contracts awarded also fell 26% m-o-m to USD 9.7 bn during the month, while project awards fell 18.5% y-o-y for the entire 1Q 2026 to USD 29.2 bn.

The UAE was not alone: Saudi Arabia saw project awards halve during the quarter to USD 11 bn — its second-lowest level in more than five years, according to Meed data cited by Kamco Invest (pdf). The decline in awards in the UAE and Saudi Arabia — the Gulf’s two largest project markets — led to a 9.7% y-o-y decline in regional awards during the quarter, which was offset by growth in awards in Kuwait, Oman, and Qatar.

IN CONTEXT- The regional war has dampened foreign investor sentiment and caused disruptions at several major energy and industrial facilities across the Gulf. Foreign investors pulled some USD 120 bn from the UAE earlier in the conflict, and some major firms have paused plans to invest further in projects, including London-based data center firm Pure Data Centers. CEO Gary Wojtaszek told CNBC recently that the firm is pausing data center investment decisions in the region due to the war until “everything settles down,” adding, “no one’s going to run into a burning building, so to speak.”

BACKGROUND- The company’s data center on Abu Dhabi’s Yas Island was among several hit by debris from an Iranian strike earlier in the conflict. Still, he says the firm sees long-term prospects in the region, with strong demand and ambitious national visions.

The Gulf is now also facing a whopping USD 58 bn repair bill for existing energy infrastructure, as well as rising raw material costs, which means a recalibration of project funding is not out of the question.

This comes as some USD 86.7 bn worth of projects remain in the bid evaluation stage, and USD 52 bn are in tendering. That’s out of an estimated USD 550 bn worth of projects in the pipeline, mostly in construction and transport.

By the sector

The UAE maintained its position as the largest projects market in the region, and saw growth in project awards in two sectors, namely gas and transport. Transport accounted for more than a third of projects awarded during the quarter, at around USD 10.1 bn, up significantly from USD 3 bn in 1Q 2025. Meanwhile, the gas sector saw USD 8.5 bn in contracts awarded, up from USD 2.9 bn in the same quarter last year.

The sectors that got hit the hardest: Power, recording a 95.8% y-o-y fall in contracts awarded to USD 333 mn in 1Q 2026, and construction, which saw awards fall 39.9% y-o-y to USD 7 bn.

REMEMBER- Construction is among the sectors likely to see a slowdown due to the war’s impact on real estate demand. Fitch Ratings expects developers to prioritize cashflow over major expansions to navigate a cooling buyer sentiment.

What’s next? Expect a sluggish year for new projects

“GCC project activity is anticipated to witness sluggish momentum in 2026, weighed down by the destabilizing repercussions of the US-Iran conflict for the region as well as for the global economy,” according to Kamco Invest.

Activity is expected to rebound quickly in 2027, though, according to Kamco Invest, in line with the expected rebound in economic activity. Remember: Most economists see the UAE’s economy stagnating this year, but growth is expected to rebound near the 5-6% mark.

There are already some positive signs for 2Q 2026, at least. The UAE kicked off the quarter with several major contracts awarded, including AED 3.5 bn worth of contracts for Palm Jebel Ali. A new AED 34 bn Metro Gold Line is also set to start construction right away, with completion expected in 2029, so more news could be coming on that front.

A USD 40 bn oil revenue boost?

The UAE is widely expected to accelerate investments in oil and gas after its exit from Opec and Opec+, according to several analyst notes following the announcement. Heavy investments across upstream capacity, drilling, processing, storage, and export infrastructure are likely, Arqaam Capital research head Jaap Meijer wrote on LinkedIn.

A newfound focus on Fujairah could be the next order of business given the “strategic value of pipeline and export capacity outside the Strait of Hormuz,” he explained.

Without Opec’s production quotas, the UAE might hit 6 mn bbl / d of capacity in the medium term if it accelerates investments in oil and gas, according to Meijer. A rise to 5 mn bbl / d is also “realistic” — given it’s been a target for 2027 for a few years now, up from a current capacity of around 4.6-4.9 mn bbl / d. A Barclays note picked up by Reuters also said the UAE is likely to accelerate oil supply as it works its way out of the current crisis.

A production hike to 5 mn bbl / d — up from about 3.4 mn bbl / d before the war — could add some USD 40 bn in annual gross oil revenue, Meijer wrote.

That’s a huge boon for the economy: A USD 40 bn boost would “support fiscal revenues, government-related entity capex, domestic liquidity, and real GDP growth,” he added.

As we reported earlier this week, the move to exit Opec+ comes at a critical time for the UAE’s economy — it was forecast to be the fastest-growing economy in the GCC this year, but is now expected by many to either stagnate or shrink in 2026 due to the impact of the war on the non-oil sector and oil market disruptions. Greater production flexibility may help offset slowdowns in sectors such as tourism, trade, and real estate, and maximize hydrocarbon revenues by capitalizing on market-disruption [windows] after the strait is fully open,” MENA economist Hamzeh Al Gaaod said.

Markets seem to already be pricing this in: The energy-heavy ADX rose 0.7% on the news yesterday, with Adnoc Drilling the most traded stock of the day, closing the trading day up 8.1% at AED 5.49. The firm could stand to be the biggest beneficiary from this exit, given higher capacity means “more wells, more rigs, more oilfield services intensity, and stronger long-term earnings visibility,” Meijer said.

Buy a property — any property — and you have a visa

Dubai is lowering the bar for property-linked residency, scrapping the minimum property value requirement for two-year investor visas for sole owners, according to updates to the Dubai Land Department’s Cube Center. Investors who fully own a property can now qualify regardless of the asset’s value, with the removal of the previous AED 750k threshold.

Things are different for co-owners: For jointly owned properties, each investor must hold a minimum stake of AED 400k to qualify, even in equal splits. This effectively closes the door on those trying to secure a visa through pooling smaller shares together.

In short: The system’s shift from a price threshold to an ownership-based model opens the door to lower-ticket investors, while also tightening rules on shared ownership. This could lift activity at the lower and mid-tier ends of the market.

The bigger endgame? More buyers become eligible. “The revised thresholds mean that existing property owners who previously fell below the eligibility criteria may now qualify for residency,” Cavendish Maxwell Research Manager Ali Siddiqui tells EnterpriseAM, adding that the changes could pull in buyers for whom the residency benefit was out of reach.

Our take? This looks like a preemptive move to support the real estate investment side of the market as momentum begins to soften. Residential values slipped 5.9% m-o-m in March — the first drop since 2020 — while real estate equities were among the hardest hit during the war-driven selloff. “At a time when market sentiment is being tested by external headwinds, Dubai’s latest policy update further reinforces its position as an adaptive, investor-friendly destination,” Siddiqui says.

ICYMI- Even so, underlying activity has remained solid by historical standards, with analysts pointing to a cooldown rather than a correction.

Zoom out: The tweak also fits into a broader push to expand and segment residency pathways. Alongside the two-year investor visa, Dubai offers a 10-year Golden Visa (AED 2 mn threshold) and a five-year retiree visa for over-55s meeting income or asset criteria. Authorities opened up other pathways like the Golden Visa scheme for select nationalities, offering lifetime residency for an AED 100k fee, and have opened the door for superyacht owners, signaling a shift toward more flexible, targeted residency routes.

ENBD reopens AT1 market

Emirates NBD just reopened the regional AT1 market, after successfully pricing its USD 750 mn issuance at 50 bps tighter than its initial guidance, according to a press release. The move marked the first re-entry by a GCC player into debt markets since the war began and saw pricing tighten to 6.25% from initial price point guidance of 6.75%. The six-year, non-call notes will be listed on Euronext Dublin and Nasdaq Dubai.

Demand is still there: The issuance saw orders of more than three times the issuance size, with demand coming from the Middle East, Asia, Europe, and the UK. The broad-based investor interest and demand size signal confidence in UAE capital markets, during an otherwise quieter-than-usual period that has seen some names slip into distressed territory on the credit front. Subscription to the riskiest layer of bank capital debt in the event of liquidation also points to confidence starting to return when it comes to investment-grade names, despite the regional uncertainty.

ENBD has been securing debt for some time now, closing a USD 2.25 bn syndicated loan a few weeks ago, in addition to raising USD 325 mn from private markets, and issuing green bonds in both January and February.

More widely, the first quarter of this year has been marked by muted debt markets, with regional bond issuance down 12% y-o-y to USD 48.1 bn following the outbreak of the war. Still, Abu Dhabi has been turning to private markets to secure some USD 2.5 bn in debt in the past weeks, and we also covered reports that GCC governments and state-linked entities borrowed over USD 10 bn from Pimco.

ADVISORS- Abu Dhabi Commercial Bank, Emirates NBD Capital, First Abu Dhabi Bank, Citi, Barclays, HSBC, and JP Morgan were joint lead managers and bookrunners. Linklaters was dealer counsel, and Clifford Chance acted as issuer counsel.

More earnings are in from ADIB, DAE, Fertiglobe, Tecom, NBF, and Americana

Fertiglobe’s earnings surge as prices offset disrupted volumes

Higher prices help offset softer sales for Fertiglobe, with the Adnoc-owned urea and ammonia producer and exporter delivering a strong bottom line in 1Q 2026. Adjusted net income nearly doubled to USD 145 mn on higher pricing, even as volumes came under pressure from trade disruptions, dipping 12% y-o-y, according to its management discussion and analysis report (pdf) and earnings release (pdf). Revenue rose 32% y-o-y to USD 915 mn.

Urea prices rose 30% y-o-y, while ammonia rose 22% y-o-y — and operating rates held at 96%. The Strait of Hormuz disruption put upward pressure on prices as supply tightened.

REMEMBER- Fertiglobe has been leaning into Europe as trade flows shift, expanding its footprint in the bloc as carbon pricing and curbs on Russian supply tilt demand toward lower-emissions producers. Equity research firm Bernstein recently named it among its top MENA picks, pointing to its exposure to tight nitrogen markets and structurally low-cost feedstock.

Looking ahead: Fertiglobe expects nitrogen market fundamentals to remain “robust” in the near term, supported by tight supply, seasonal demand from key importers, and disruptions linked to the regional conflict. Over the longer term, it sees demand for urea continuing to outpace supply additions, supporting a constructive pricing backdrop.

Tecom rides near-full occupancy into steady 1Q

Dubai business district developer Tecom Group is riding high occupancy and long leases to keep growth ticking, even as momentum in Dubai’s office market starts to cool. Recurring net income rose 12% y-o-y to AED 403 mn in 1Q 2026, while revenue climbed 11% to AED 755 mn, according to its earnings release (pdf). Funds from operations increased 14% y-o-y to AED 549 mn.

What’s driving it: Occupancy edged up to 98%, while customer retention held strong at 94% in its commercial portfolio and 99% in industrial, underscoring sticky demand across its tenant base. Higher rental rates and contributions from newer assets also lifted the top line. Tecom’s weighted average lease term stands at 8.8 years, giving it solid forward income visibility.

In context: Leasing activity briefly paused in March following the escalation of the regional conflict, but has since picked back up, pointing to a rebalancing and flight to quality rather than a broad pullback, Adam Wynne, partner and head of commercial at Knight Frank, told us earlier.

Americana Restaurants

F&B giant Americana Restaurants saw its bottom line rise 93.5% y-o-y to USD 63.2 mn in 1Q 2026, with its revenue rising 13.3% to USD 649.7 mn, according to its earnings release (pdf). The ADX- and Tadawul-listed company’s margin also improved 400 bps y-o-y to 9.7%.

Another busy quarter: Americana opened 10 stores and added seven Malak Al Tawouk locations to its portfolio in 1Q, bringing its total footprint to 2.7k restaurants across 12 markets.

NBF bucks provision trend to post record earnings

Steady core business growth helped National Bank of Fujairah’s (NBF) net income after tax rise 11.6% y-o-y to a record AED 342.3 mn in 1Q 2026, according to its management discussion and analysis report (pdf). Operating income edged up 3.8% to AED 701.1 mn, with stronger net interest income partly offset by softer non-interest income. The business banking segment accounted for the largest topline share with AED 266.4 mn, followed by corporate and institutional banking with AED 208.6 mn, and the retail segment at AED 171 mn.

Costs helped: Impairment charges fell 27.7% y-o-y to AED 119.5 mn, lifting the bottom line and bucking the broader trend of rising provisions across the sector. The lender’s total assets stood at AED 68.8 bn at the end of the quarter, up 6.8% y-o-y, while deposits rose 4.5% to AED 49.7 bn.

ADIB’s net income up 7% as diversification and new customers offset rising costs

Abu Dhabi Islamic Bank (ADIB) also kept momentum going in 1Q 2026, with net income after tax rising 7% y-o-y to AED 1.8 bn, according to its management discussion and analysis report (pdf). Revenues climbed 12% to AED 3.2 bn on strong business volumes and balance sheet expansion, with total assets up 18% y-o-y to AED 287 bn.

Growth across the board: Funded income rose 17% y-o-y to AED 2.0 bn on higher financing volumes, while non-funded income edged up 4% to AED 1.2 bn, reflecting continued diversification. The lender also added around 66k new customers during the quarter.

Costs up, discipline in focus: Impairment charges jumped 50% y-o-y to AED 158 mn, though in line with guidance, the lender said. Bloomberg Intelligence has previously flagged the bank as having a relatively tighter capital cushion than top-tier peers amid rising regional risks, putting the focus on balance sheet discipline.

REMEMBER- ADIB is leaning into new growth avenues, including open finance and is becoming the UAE’s first bank licensed as a third-party provider under the Central Bank of the UAE’s AlTareq framework.

DAE posts 1Q earnings

Dubai Aerospace Enterprise’s net income rose 19.1% y-o-y to USD 102.2 mn in 1Q 2026, according to its earnings release (pdf). Revenue went up 15% y-o-y to USD 455.5 mn, driven by additional lease income from newly acquired aircraft, though partially offset by a decline in engineering maintenance service revenue.

On the operations front: The company bought nine owned aircraft and sold 15 during the quarter, while signing 65 lease agreements, extensions, and amendments. Its owned, managed, and committed fleet stood at 663 aircraft at the end of March.

An Egypt-UAE portfolio tieup, Aramex refinances, more UAE-China flows, Mashreq + Cashew team up on lending

An Egypt-UAE tie-up with a USD 500 mn portfolio

Egyptian developer Delta Capital for Urban Development has partnered with Emirates Global Real Estate Investment to launch a USD 500 mn portfolio of mixed-use projects across Egypt, Zawya reports. Construction will begin in 2027. The 500-acre portfolio will span residential, commercial, and service projects in Cairo, Kafr El Sheikh, and El Mahalla El Kubra.

Aramex refinances debt

Aramex is pulling its financing home: Logistics firm Aramex refinanced AED 815 mn of debt, rolling its USD and GBP loans into one UAE-domiciled facility backed by local and international banks. The facility is structured as sustainability-linked, integrating accountability directly into the company’s financing approach.

A UAE-domiciled facility means the debt now sits under UAE law — with a local borrowing entity and a single regulatory and repayment structure — replacing a mix of offshore USD and GBP loans, and reducing both complexity and multi-jurisdictional exposure. By pulling offshore obligations into one domestic facility, the logistics provider aligns its capital structure more closely with its operational core — a move that acting CFO Lubna Shebli framed as both a cost optimization and a balance sheet upgrade.

BACKGROUND- Aramex is refinancing from a position of stability after it ended last year with a debt-to-EBITDA ratio of 3.2x — a level where financing matters.

Grow taps ADGM as UAE-China capital flows build

China’s Grow looks to ADGM: China-based international asset manager Grow Investment Group has secured in-principle approval for a financial services permission in ADGM, marking its push into the region as it looks to tap institutional capital and position itself as a bridge between GCC investors and Chinese markets, according to a press release. The USD 1.5 bn asset manager plans to roll out multi-asset strategies and access to Chinese capital markets once fully licensed, with final approval expected in the coming weeks.

Why now: The move lands as Abu Dhabi doubles down on financial cooperation with China. ADGM recently signed an MoU with Shenzhen’s Futian District covering financial services, AI, and cross-border investment frameworks, following a broader push that saw 24 UAE-China agreements inked earlier this month spanning trade and investment.

Mashreq + Cashew team up on lending

Our friends at Mashreq and UAE-based fintech Cashew are teaming up on a lending framework, according to a press release. Clients will be able to access up to AED 150k through a buy-now-pay-later mechanism that spreads repayments over up to two years. Mashreq also stepped into the healthcare financing field last week through a partnership with Toothpick, allowing customers to secure financing for treatments and procedures.

Diversification, redefined

Emerging market stocks recouped their losses from the early weeks of the US and Israel’s war on Iran, pushed now to a fresh all-time high by a rally in three Asian semiconductor companies. In addition to helping the world’s EM stock benchmark to a record close, the rally is prompting fresh debate over whether the gauge still offers meaningful diversification from the AI trade reshaping Wall Street, according to the Financial Times.

The MSCI Emerging Markets index rose more than 15% over the past four weeks — double the 10% clip the S&P 500 recorded over the same stretch — clearing the previous high it set in February. The move erases a sharp selloff that hit Asian markets in the opening weeks of the Iran war and lifts the index to roughly 16% above where it began in 2026, extending a five-quarter run of outperformance versus US blue chips, according to TradingView.

The bulk of the rally came from a tightly clustered group of names directly plugged into Nvidia’s accelerator supply chain. Taiwan Semiconductor Manufacturing Company climbed more than 25% this month and — at a market value of about USD 1.8 tn — has displaced Saudi Aramco as the index’s most valuable constituent. Samsung Electronics is also up 32%, and SK Hynix is up by more than 60%. Taken together, the three suppliers now sit at close to a quarter of the entire index.

Local stock markets have also received a shot in the arm: Taiwan’s stock market is on track for its best month in decades, up about 21% in USD terms, while South Korea's Kospi rose 24% — its strongest monthly showing since the 1998 Asian financial crisis.

Turbocharging the rally: Higher AI capital spending in the US. Combined 2026 capex budgets for the largest US hyperscalers — Amazon, Alphabet, Microsoft, Meta, and Oracle — are now projected to exceed USD 600 bn, up 36% y-o-y, with roughly three-quarters of that flowing to AI-related infrastructure, according to Futurum Group and CNBC. That capital-spending boom also sent Asian foundry suppliers’ earnings soaring: SK Hynix reported a bottom line of USD 27 bn last week, with revenue up nearly 200% y-o-y, according to CNBC and KED Global. The company has sold out its DRAM, NAND, and high-bandwidth memory production through the end of the year, much of it to Nvidia, NotebookCheck reports.

The dominance of those names has left some investors uneasy that the EM index — long pitched as a way to diversify away from rich-world equity risk — has effectively become a derivative of the AI mania that’s taken over Wall Street.

“The AI story has run so wild in [South] Korea and Taiwan,” Song Zhe, senior investment specialist at BNP Paribas Asset Management, tells the salmon-colored paper. “We still love this market, but people should think about diversification in this AI rally.”

Both Taiwan and South Korea were among the hardest hit when Asian markets tumbled in the opening days of the Iran war, as investors liquidated their best-performing trades of early 2026.

But equity markets proved resilient once the initial panic faded. The USD, which spiked at the outset of the conflict, has surrendered most of those gains — a tailwind for EM exporters whose earnings translate from local currencies.

“The USD, which largely moves in opposite directions to emerging markets… is likely to have peaked,” Varun Laijawalla, EM equity portfolio manager at Ninety One, tells the FT. EM stocks are also benefiting from a “structurally better earnings picture” and cheaper valuations than the US, he argues — a view echoed by sell-side analysts who have raised 2026 EM earnings forecasts by about 30% this year, three times the upgrade applied to the S&P 500, according to GuruFocus.

Tech has led the charge, with the EM tech sub-index up around 50% YTD, while energy, industrials, and utilities also delivered double-digit returns. “Seven out of 11 sectors were in positive territory,” Laijawalla said. “The rally is more than just tech.”

MARKETS THIS MORNING-

Asia-Pacific markets are mixed in early trading this morning as investors process a pretty busy 24 hours — Brent soared past USD 120 / bbl amid the ongoing naval blockade, the US Federal Reserve left rates steady, and AI optimism continues to shield tech heavyweights from ongoing volatility.

ADX	9,901	+0.7% (YTD: -0.9%)
DFM	5,861	+0.1% (YTD: -3.1%)
Nasdaq Dubai UAE20	4,733	+0.4% (YTD: +3.2%)
USD : AED CBUAE	Buy 3.67	Sell 3.67
EIBOR	3.4% o/n	4.0% 1 yr
TASI	11,238	+0.5% (YTD: +7.1%)
EGX30	52,383	+0.3% (YTD: +25.2%)
S&P 500	7,136	0.0% (YTD: +4.2%)
FTSE 100	10,213	-1.2% (YTD: +2.8%)
Euro Stoxx 50	5,816	-0.3% (YTD: +0.4%)
Brent crude	USD 119.80	+1.5%
Natural gas (Nymex)	USD 2.63	-0.6%
Gold	USD 4,573	+0.3%
BTC	USD 76,057	-0.6% (YTD: -13.2%)
Chimera JP Morgan UAE Bond UCITS ETF	AED 3.72	+0.5% (YTD: -0.8%)
S&P MENA Bond & Sukuk	151.26	-0.2% (YTD: -0.4%)
VIX (Volatility Index)	18.81	+5.5% (YTD: +25.8%)

THE CLOSING BELL-

The DFM rose 0.1% yesterday on turnover of AED 828.5 mn. The index is down 3.1% YTD.

In the green: Dubai Refreshment Company (+12.7%), National International Holding Company (+9.1%), and Amlak Finance (+4.4%).

In the red: Al Salam Sudan (-2.5%), Emaar Properties (-1.4%), and Watania International Holding (-1.3%).

Over on the ADX, the index rose 0.7% on turnover of AED 2.1 bn. Meanwhile, Nasdaq Dubai was up 0.4%.

CALENDAR

MAY

4-7 May (Wednesday-Friday): Make It in the Emirates, Adnec Center, Abu Dhabi.

12-14 May (Tuesday-Thursday): Abu Dhabi Infrastructure Summit, ICC Hall, Adnec Center, Abu Dhabi.

15-17 May (Friday-Sunday): Art Dubai, Madinat Jumeirah, Dubai.

19-22 May (Tuesday-Friday): Abu Dhabi Water and Energy Week, Adnec Center, Abu Dhabi.

22 May-7 June (Friday-Sunday): Dubai Esports and Games Festival, Dubai.

JUNE

3-4 June (Wednesday-Thursday): MENA Investor Conference, Ritz-Carlton DIFC, Dubai.

3-4 June (Wednesday-Thursday): MENA Desalination Forum, Conrad Abu Dhabi Etihad Towers, Abu Dhabi.

15 June - 15 September (Monday-Thursday): Dubai Mallathon, Dubai.

17 June (Wednesday): Investopia Global Talks, Tashkent, Uzbekistan.

22-24 June (Monday-Wednesday): The International Glass Manufacturing Show, Dubai.

JULY

31 July (Friday): Large businesses achieving annual revenues equal to or above AED 50 mn must appoint an accredited service provider for e-invoicing implementation.

AUGUST

17-20 August (Monday-Thursday): Arabian Travel Market, Dubai World Trade Center, Dubai.

SEPTEMBER

1-3 September (Tuesday-Thursday: Middle East Energy, Dubai World Trade Center, Dubai.

7-9 September (Monday-Wednesday): AIM Congress, Dubai World Trade Center.

7-9 September (Monday-Wednesday): International Property Show, Dubai World Trade Center, Dubai.

12-13 September (Saturday-Sunday): Emirates International Congress on AI & Visionary Leadership in Transforming Healthcare, Adnec Center Abu Dhabi.

OCTOBER

4-10 October (Sunday-Saturday): World Space Week, Abu Dhabi.

5-7 October (Monday-Wednesday): AI Everything Global, Adnec Center, Abu Dhabi.

12-14 October (Monday-Wednesday: Airport Show, Dubai World Trade Center, Dubai.

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

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

Signposted to happen sometime in October 2026:

Abu Dhabi Space Week, Abu Dhabi.

NOVEMBER

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

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

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

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

DECEMBER

2-4 December (Wednesday-Friday): UN Water Conference, UAE.

8-9 December (Tuesday-Wednesday): Capital Market Summit, Madinat Jumeirah, Dubai.

Signposted to happen sometime in 2027:

1 January: Deadline for large businesses to implement e-invoicing;
1Q 2027: Completion of the first phase of Hassyan seawater desalination project;
1-3 February (Monday-Wednesday): World Governments Summit;
31 March: Small businesses with annual revenues of less than AED 50 mn are obliged to contract with an accredited service provider for e-invoicing implementation;
31 March: Government entities are required to appoint an accredited service provider for e-invoicing implementation;
21-22 April (Wednesday-Thursday): Token2049, Dubai;
1 July: Deadline for small businesses to implement e-invoicing;
1 October: Deadline for governments to implement e-invoicing;
Abu Dhabi’s solar and battery energy facility, combining 5.2 GW of solar capacity and 19 GWh of battery storage, is set for commissioning.

Signposted to happen sometime in 2028:

Artificial Intelligence Summit.

Signposted to happen sometime in 2029:

Sibos 2029 organized by the Society for Worldwide Interbank Financial Telecommunication (SWIFT), Dubai;
Annual Meetings of the World Bank Group and the International Monetary Fund, Abu Dhabi;
The commissioning of the seventh phase of Mohammed bin Rashid Al Maktoum Solar Park.

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