The UAE was the second biggest issuer of ESG sukuk in 1H 2024

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Visa overstay amnesty period in September + could someone acquire The Spectator from RedBird-IMI as soon as this month?

Good morning, friends. It’s the final day of what felt like a long week, and we’re very much looking forward to the weekend.

It’s a relatively quiet day in the news — though not on the earnings front. The biggest stories of the day include: data on the UAE’s ESG sukuk issuances in 1H 2024; an investment from Dubai-based National Pulse in Singaporean fintech Aleta; and a new AED 293 mn medical manufacturing facility.

UPDATE ON OUR OLYMPICS RUN- The UAE equestrian team finished 18th in yesterday’s qualifiers, failing to qualify for the finals. Today: Judoka Magomedomar Magomedomarov competes in the round of 32 against Mohamed El Mehdi Lili. Meanwhile, Mariam El Farsi will compete in the 100m sprint.

PUBLIC SERVICE ANNOUNCEMENTS-

#1- Residents breaching residency regulations will be exempt from any fines starting 1 September and until November, according to a decision by the Federal Authority for Identity, Citizenship, Customs, and Port Security. The two-month grace period will allow violators to either adjust their status or leave the UAE without facing legal consequences.

#2- Two gov’t websites will be suspended today: The Foreign Affairs Ministry’s website, along with the Federal Prevention and Safety System’s services on the civil defense and Interior ministry’s websites, applications, and other third party platforms services will be suspended temporarily today for technical maintenance, according to two separate X posts (here and here). The Foreign Affairs Ministry’s website will be unavailable starting 9pm and until midnight, while the rest will be suspended for one hour from noon until 1pm.

#3- Etihad Airways has warned against fake ads promoting subscriptions to an IPO on DFM, stating that “deceptive posts” are using the carrier’s branding to advertise fraudulent investment opportunities in a statement to Khaleej Times. The Securities and Commodities Authority also warned against the fake ads.

REMEMBER- Etihad Airways tapped banks in May to advise on its planned IPO on the ADX, which could raise as much as USD 1 bn. Slated to become the first by a Gulf carrier, the share float could take place by year’s end.

HAPPENING THIS WEEKEND-

#1- The annual jiu-jitsu tournament, the Abu Dhabi Extreme Championship, is returning to Abu Dhabi at the Mubadala Arena on 2 August, Wam reports.

#2- Abu Dhabi will play host to a big night for mixed martial arts fans on 3 August at Etihad arena. The UFC Fight Night will see the return of MMA champion Nick Diaz, who has been out of the limelight since 2021, as he goes head to head with Tony Ferguson.

Also set to clash: Former flyweight champion Deiveson Figueiredo will face bantamweight title challenger Marlon Vera, while world number 2 bantamweight contender Cory Sandhagen will headline against Umar Nurmagomedov.

WATCH THIS SPACE-

#1- Hedge fund owner Paul Marshall could acquire The Spectator Magazine from RedBird IMI as soon as this month, with talks reportedly progressing well, the Financial Times reports citing three people with knowledge of the matter. Marshall’s bid values the publication at USD 100 mn, one of the people said.

The Telegraph and The Spectator will likely be sold separately: If Marshall’s acquisition of The Spectator goes through, it would remove the magazine from the Telegraph bidding, where a second source suggests he is unlikely to be the final buyer.

Remember, there are still a lot of interested bidders: Interest in the two papers has “remained extremely strong,” a RedBird IMI spokesperson said in June, stating that the firm has been in talks with “several interested parties.” DMGT, which owns the Daily Mail, Belgian Group Mediahuis, and National World are among the bidders vying for the two papers.

RedBird IMI wants to recoup its losses: RedBird IMI, a JV between Deputy Prime Minister Sheikh Mansour bin Zayed Al Nahyan's International Media Investments and RedBird Capital Partners, is looking to sell the papers to recoup the GBP 600 mn invested last year to acquire the assets, before the takeover bid fell through. The Barclay Family is also expected to fail to repay the debt after the Telegraph incurred a GBP 240 mn loss in 2023, Bloomberg reports.

#2- Adia eyes minority stake in Indian loan provider: Abu Dhabi Investment Authority (Adia) has entered talks with EQT Baring Private Equity to buy a 10% stake in Indian education loan provider HDFC Credila Financial Services, Moneycontrol reports, citing a person familiar with the matter. The sale could come as part of a wider fundraising round or a secondary transaction, the source said. Discussions with the sovereign fund have resumed after initial talks — in which Adia reportedly took part as part of a consortium — stalled, with EQT later acquiring a 72% stake in Credila in March.

#3- GCC-Indonesia trade talks kick off: GCC Secretary Jasem Mohamed Albudaiwi and Indonesian Trade Minister Zulkifli Hasan kicked off negotiations for a trade agreement on Wednesday in Riyadh, Wam writes. The first round of talks are slated to start this year, with plans to wrap talks within the next two years.

DATA POINTS-

#1- Gross bank assets fell 0.2% m-o-m to AED 4.287 tn at the end of May, according to the Central Bank of the UAE’s (CBUAE) latest monetary and banking developments report (pdf). Gross credit grew a marginal 0.7% m-o-m to AED 2.078 tn, driven by a 0.7% increase in domestic credit and a 0.9% rise in foreign credit.

The increase in domestic credit was fueled by increased lending mostly to the private sector, which saw a 1.2% m-o-m increase, and a 0.6% increase in lending to the public sector. This growth offset the reductions of 2.2% in credit to the government and 3.4% to non-banking financial institutions.

Total bank deposits fell 1.4% m-o-m to AED 2.678 tn at the end of May, propelled by a 1.2% m-o-m decrease in resident deposits and a 4.6% decrease in non-resident deposits, according to the report.

The CBUAE’s total foreign assets rose some AED 16.44 bn to AED 766.73 bn at the end of May, according to the bank’s latest data (pdf).

#2- Sharjah saw the value of real estate transactions soar 35.6% y-o-y in 1H 2024 to over AED 18.2 bn, according to the Sharjah Real Estate Registration Department. This growth was driven by a 64% y-o-y surge in sales to over 10.8k, marking the highest sales volume since 2012.

The value of sales increased 13.8% y-o-y to AED 7 bn, according to a separate post from the real estate department. Residential transactions accounted for the lion’s share — 81.5% — of total transactions, with UAE citizens buying up most of the units on offer with a total AED 8.8 bn invested, followed by expats who offered up some AED 4.8 bn.

#3- Ras Al Khaimah Chamber of Commerce member exports hit AED 4.18 bn in 1H 2024, with 15.2k certificates of origin issued, Albayan reports. Top recipients of exports were Saudi Arabia, Oman, Kuwait, and Egypt, while the top goods exported were live animals and animal products (43.5%), followed by plant products (27.6%).

MEANWHILE- Are you planning to be in Egypt on 24 September? You may be interested in attending our 2024 Enterprise Finance Forum. Seating is strictly limited at our flagship, invitation-only forum for C-suite executives and other senior leaders.

Why attend? We’re in the early days of a generational realignment of power in our industry — in our region and beyond — and on the cusp of the biggest intergenerational transfer of wealth the world has ever seen. With that as the backdrop, we’re going to take stock of where we stand six months after the float of the EGP and ask what’s next for finance in Egypt and the wider region. Among the questions we’ll be asking:

What roles will Egypt, Saudi and the UAE play in the regional industry going forward?
What are foreign investors looking for right now?
Is real estate the only asset class in Egypt?
What does the next generation of leaders think as they take over established family businesses?

Do you want to request an invitation? Tap or click the image below.

THE BIG STORY ABROAD-

Another market sell-off in the US is dominating headlines in the foreign business press, as more disappointing earnings and weak jobs and manufacturing data spurred volatility in major indices.

The tech-heavy Nasdaq closed down 2.3%, with every Magnificent Seven stock except Meta ending lower.

On the flipside, it was a good day for bonds, with yields on the benchmark 10-year treasury falling 4% for the first time in six months, as investors clinged on to the hopes of a September rate cut.

Several major Big Tech firms posted their 2Q financial results:

Apple’s revenues inched up 5% y-o-y in 2Q 2024, while sales fell slower than analysts expected — though markedly so in China. The iPhone maker expects the upcoming AI upgrades set to launch with its iPhone 16 to spur sales in the final quarter of the year. (Bloomberg | Reuters)
Amazon saw sales growth slow in 2Q 2024 amid cautious consumer spending, sending its shares down almost 8% despite an increase in cloud sales. A boost in AI spending also fueled market jitters around the commercial viability of AI. (Reuters | FT)
The same jitters were fueled further by a conservative sales forecast from chip designer Arm Holdings, which sent US chip stocks falling 7% in their worst day since 2020. (Reuters)

ALSO- Intel confirmed plans to cut 15% of its workforce and said it will suspend dividends as it looks to address its losses, sending its shares down 20% in extended trading and setting it up for USD 24 bn wiped off its market value. (Reuters)

ON THE MACRO SIDE- The Bank of England cut interest rates by 25 bps for the first time in over four years on the back of easing inflation. (FT)

AND IN POLITICS- Russia and the US saw the largest prisoner swap since the Cold War take place, with 16 prisoners — including Wall Street Journal reporter Evan Gershkovich — exchanged for Russian prisoners. (WSJ)

CLOSER TO HOME- Hezbollah said its war with Israel has entered a “new phase” following the back-to-back assassinations of senior commander Fuad Shukr and Hamas’ top political leader. Israel also yesterday confirmed it killed Hamas military commander Mohammed Deif. (The Guardian)

OLYMPICS-

It’s day seven of the Olympics. The biggest events to watch out for: the first track final will take place with the men’s 10km race, while the women’s 5km and 100m get underway; the grueling decathlon kicks off; and more athletics and swimming finals close out the day.

Highlights from yesterday: Andy Murray marked the end of his Tennis career with a defeat in the doubles’ quarter-finals, Simone Biles snagged another gold in the all-around finals; and the US’ Katie Ledecky is now the most decorated female Olympic swimmer in history,

The medal standings now at the Paris Olympics:

China (11 gold, 24 overall)
United States (9 gold, 37 overall)
France (8 gold, 27 overall)
Australia (7 gold, 16 overall)
Japan (8 gold, 16 overall)

Want to see when your favorite sport is on? Check out the official schedule here.

MARKET WATCH-

Opec+ kept its oil policy unchanged during an online meeting yesterday, according to a statement. The cartel left in place current production cuts of 3.66 mn barrels per day (bbl / d) until the end of this September, before beginning to phase out the cuts of 2.2 mn bbl / d over the course of a year from October 2024 to September 2025.

The UAE took to market nearly 34% of ESG issuances in 1H 2024

The UAE was the second biggest issuer of ESG sukuk in 1H 2024, accounting for 33.8% of issuances and trailing only behind Saudi Arabia, which took to market 43% of issuances, according to the latest report by Fitch Ratings.

The global stocktake: Outstanding global ESG sukuk surged 41% y-o-y to USD 43 bn in 1H 2024,The GCC region accounted for 43% of issuances, with USD 18.5 bn in outstanding ESG sukuk.

The highlights: Fitch noted Emirates Islamic Bank’s USD 750 mn green sukuk and Aldar Properties’ USD 500 mn green sukuk among the biggest ESG issuances taking place during the period.

ESG bonds fell slightly during 1H: In the core Islamic finance markets, which include the GCC, Malaysia, Indonesia, Turkey, and Pakistan, ESG bonds fell 34% y-o-y to USD 7.8 bn during the first six months of 2024.

Looking ahead: Fitch anticipates a slowdown in issuances during 3Q 2024 amid the seasonal lull. However, the nascent market is expected to pick up in 4Q 2024, driven by “governments' increasing commitment to sustainability and issuers’ aims to meet ESG mandates and funding diversification plans,” the ratings agency said. Furthermore, the overall debt market is expected to grow by the end of the year and early 2025 on the back of lower oil prices and the anticipated interest rate cuts.

More issuances incoming: Qatar Central Bank’s new ESG and sustainability strategy, coupled with existing frameworks in the UAE, Saudi Arabia, Oman, and Malaysia, is expected to further ramp up ESG debt markets. The promising medium-term potential for ESG debt issuance is fuelled by governments’ increasing commitment to sustainability, and issuers’ aims to meet ESG mandates and funding diversification plans,” Bashar Al Natoor, Global Head of Islamic Finance at Fitch Ratings said.

MORE DEBT NEWS-

Equitativa redeems USD 19.27 mn sukuk: Equitativa, the manager of Emirates NBD’s real estate investment trust (REIT), has redeemed USD 19.27 mn of Emirates REIT’s USD 380 mn sukuk certificates yesterday, according to a bourse disclosure. Equitativa was able to redeem the sukuk following the sale of Trident Grand Mall last month. Its outstanding sukuk now stand at USD 304.73 mn.

Background: The REIT recently said it was exercising a one-year extension option on its sukuk, with sukuk documents showing that it must reduce the outstanding balance to USD 230 mn by 12 December. The REIT had previously redeemed USD 56 mn of the sukuk in March 2023 (pdf).

National Pulse boosts Aleta Planet’s regional expansion

National Pulse backs Singapore’s Aleta Planet: Dubai-based strategic management firm National Pulse has made an undisclosed investment in Singaporean payment solutions provider Aleta Planet, Reuters reports. The investment will allow Aleta Planet to facilitate payments for National Pulse’s portfolio companies, and in turn expand its cross-border payment services in the region, Aleta’s founder and chairman Ryan Gwee said.

The fintech expects to triple the amount of annual payments it facilitates from the current USD 2 bn with access to National Pulse’s portfolio companies, Gwee added.

The two companies will also set up a joint venture, initially targeting the agritrade and logistics sectors, according to Aleta’s Chairman Ryan Gwee. The ownership breakdown and investment details of the JV was not disclosed.

National Pulse? The project management firm focuses on developing technology-driven businesses and operates through various subsidiaries, joint ventures, and partners, according to the company’s website. Their portfolio includes companies like Metarabia, Al Safwa Consultancy, Royal Cloud, Unified Payment Network, and ICTLabs Technologies.

About Aleta Planet: Established in 2014, Aleta Planet offers payment solutions designed to facilitate secure transactions for merchants, card issuers, and B2B payments, with a focus on helping Chinese companies expand internationally. Aleta operates in Singapore, Hong Kong, Dubai, Australia, and Malaysia.

Ozon Pharma to set up AED 293 mn medical manufacturing facility in Dubai

Dubai to get new medical manufacturing facility: Dubai business park operator Tecom Group signed a Musataha land lease agreement with pharma company Ozon Pharma to set up a AED 293 mn medical manufacturing facility at Dubai Industrial City, in a bid to secure a consistent supply of high-quality medicines, Wam reports. The agreement was inked on the sidelines of Innoprom 2024.

Musataha? Musataha agreements grant investors the right to develop and own a plot of land and operate a project and maintain it for a long-term period, with ownership transferring to the government once the agreement elapses.

About the facility: The 150.7k sqft facility will comprise two phases, slated to operate at full capacity by next year. The first of the two — costing some AED 110 mn in investments — will produce over 300 mn tablets annually, and will employ some 100 specialists.

e&, ADNH, Alpha Dhabi, and more report 2Q 2024 earnings

E&-

e& saw its net income after federal royalty inch up 25% y-o-y to a record AED 3.17 bn in 2Q 2024, driven by a higher share of results from its non-controlling interests, according to its earnings release (pdf). The group’s revenues climbed 4% y-o-y to AED 14.09 bn, aided by growth across its domestic and international operations.

In 1H 2024, e& saw its net income increase 17% y-o-y to AED 5.49 bn amid growth across both its telecom and digital verticals, with revenues inching up 6% y-o-y to AED 28.31 bn. The recently rebranded “techo” also saw its aggregate subscribers rise 6% y-o-y to 175 mn users, on the back of subscriber growth in Egypt, Pakistan, UAE and West Africa.

Dividends: The telecoms company approved interim dividends of 41.5 fils per share for 1H 2024.

FERTIGLOBE-

Fertiglobe’s bottom line falls in 2Q: Fertiglobe — a UAE-headquartered urea and ammonia exporter and MENA’s largest producer of nitrogen fertilizers — reported an 81.9% y-o-y drop in net income attributable to shareholders in 2Q 2024 to USD 42.7 mn, according to its financial statement (pdf). Its revenues were down 10.1% y-o-y to USD 495.7 mn during the period.

Gas supply shortages in Egypt drove a decline in sales: Fertiglobe said its own-produced sales volumes were down 2% y-o-y in 2Q 2024 due to a 5% decline in urea volumes during the period, according to its earnings release (pdf). The drop offset a 12% rise in ammonia sales volumes during the quarter. Excluding the impact of gas supply shortages in Egypt, sales volumes would have been up 8.1% y-o-y in 2Q 2024 and 6.6% y-o-y in 1H 2024, according to the release.

“Cautious” buying of urea during 2Q: Fertiglobe said nitrogen prices took a hit during the period due to “delayed demand, cautious buying behavior and reduced urea imports from India, partially offset by some supply disruptions towards the end of the quarter.” The impact came despite a rise in natural gas prices and constant grain prices during the period.

For the year to date: Fertiglobe’s net income fell 39% y-o-y to USD 130.6 mn y-o-y during 1H 2024, while revenues were down 16.7% y-o-y during the period to USD 1.05 bn.

Adnoc’s acquisition of a stake in the firm is on track: Fertiglobe said regulatory approvals for Adnoc’s acquisition of OCI Global’s 50% stake in the company was “progressing well,” expecting the acquisition to close this year, according to the release.

The outlook for the market: “The short-term outlook for ammonia and urea is favorable, driven by tight markets, while the medium to long-term outlook continues to be supported by improving demand from new and existing applications coupled with limited supply additions,” Fertiglobe said.

ABU DHABI NATIONAL HOTELS-

Abu Dhabi National Hotels (ADNH) Group’s bottom line grew 41% y-o-y to AED 129.4 mn in 2Q 2024, according to the company’s financial statements (pdf). The group’s consolidated revenue doubled to AED 772.1 mn during the period, driven by improved performance across the company’s hotel and transport segments, in addition to increased revenues from its catering business following the acquisition of its remaining stake in its JV with Compass Group, ADNH Compass, for AED 227 mn in March, according to a separate earnings release (pdf).

On a six-month basis, ADNH Group’s bottom line jumped 381% y-o-y to AED 1.15 bn in 1H 2024, padded by the recognition of the equity interest gain of AED 916 mn from the acquisition of ADNH Compass, as well as an AED 29.7 mn one-off gain from the sale of a penthouse in 2024. Revenue increased 52% y-o-y to AED 1.23 bn during the period, primarily driven by the company’s hotel segment.

ALPHA DHABI-

Investment holding company Alpha Dhabi saw its net income attributable to shareholders fall 59% y-o-y to AED 937.6 mn in 2Q 2024, according to the firm’s financial statements (pdf). The company’s revenues stood at AED 15.12 bn during the quarter, marking a 61% y-o-y increase.

On a 1H basis: Alpha Dhabi’s bottom line halved to AED 4.33 bn, while net income from operations increased 92% y-o-y to AED 5.1 bn, according to a separate earnings release (pdf). Revenues increased 32% y-o-y, reaching AED 29.3 bn. Alpha Dhabi’s net income declined in 2024 due to the derecognition of PureHealth’s assets on its balance sheet and the introduction of corporate income tax.

The first half demonstrated robust performance across all segments, with industrials making up 41% to revenues, real estate 30%, and construction 17%.

NCTH-

NCTH in the red: The National Corporation for Tourism and Hotels (NCTH)’s net income decreased 36% y-o-y to AED 10.6 mn in 2Q 2024, according to the company’s financials (pdf). The company’s revenues fell 0.2% y-o-y to AED 163.4 mn. NCTH’s bottom line reached AED 30.2 mn in 1H 2024, marking a 15.8% y-o-y decease, while revenues inched down 0.4% y-o-y to AED 335.1 mn, according to a separate earnings release (pdf).

FUJAIRAH CEMENT-

Fujairah Cement Industries’ net losses deepened 40% y-o-y to AED 50.3 mn in 2Q 2024, compared to a net loss of AED 35.7 mn during the same period last year, according to the company’s financial statements (pdf). The company saw its revenues fall 99% y-o-y to AED 504k in 2Q 2024.

The company also penciled an AED 88.6 mn net loss in 1H, deepening 47% y-o-y compared to the corresponding period. The company attributed losses to an increase in fuel and energy costs due to rising inflation and geopolitical tensions, and a weak clinker market, according to a separate discussion report (pdf).

UNION PROPERTIES-

Dubai-based Union Properties saw its net income increase 238% y-o-y to AED 18.3 mn in 2Q 2024, according to its financials (pdf). Union’s revenues from customer contracts rose 8% y-o-y to AED 127.7 mn.

On a six-month basis, Union’s net income rose 93% y-o-y to AED 34.8 mn, while its revenues from customer contracts increased 10% y-o-y to AED 265.8 mn in 1H 2024. The growth came on the back of “robust operational strategies and effective cost management,” the developer said in its earnings release (pdf).

WATCH THIS SPACE- Union Properties is mulling the acquisition of an outsourcing company through one of its subsidiaries, the developer said. The purchase is expected to “enhance the value of the company’s assets and improve its profitability.”

WAHA CAPITAL-

Investment management firm Waha Capital incurred AED 11.7 mn in losses in 2Q 2024, falling 93% from a net income of AED 170 mn during the same period last year, according to its financials (pdf). The company’s revenues from the sale of goods and services rose 8% y-o-y to AED 38.7 mn.

In 1H 2024, the company posted AED 269.4 mn in net income, down 18% y-o-y, while its revenue from sales rose 8% y-o-y to AED 77.8 mn. Waha Capital’s net operating income rose 6% y-o-y to AED 529 mn in 1H 2024, driven by “an increase in fee income, strong inflows of third-party capital into Waha Investment and supported by the robust performance of the private investments business,” the company said in its earnings release (pdf).

Sanad to provide MRO services on Airbus engines

AVIATION-

Sanad + Airbus form MRO partnership: Sovereign investment fund Mubadala’s aerospace engineering and leasing subsidiary Sanad is partnering with Airbus to provide maintenance, repair, and overhaul (MRO) for Airbus engines, Wam reports. The partnership was signed on the sidelines of the Farnborough International Airshow. Under the partnership, Sanad will provide MRO services for Airbus single aisle aircraft engines, including A320 and A321, as well as wide-body aircrafts including the A330. .

ENERGY-

A potential new SAF venture between Masdar and TotalEnergies: UAE’s renewables giant Masdar and French oil major TotalEnergies signed an agreement to explore the feasibility of a sustainable aviation fuel (SAF) project using methanol produced from commercial green hydrogen, according to a statement last week. Details related to the costs of the potential project were not disclosed.

What we know: The project will focus on decarbonizing “hard to abate, emission intensive sectors” including aviation and maritime industries, according to the statement. It will use green hydrogen generated from renewable-powered electrolysis, and will also capture CO2 from an industrial source to be used as a feedstock.

IPO-

Abu Dhabi-backed US chipmaker to go public: Abu Dhabi-backed Cerebras Systems, an AI-focused chipmaker startup, is planning to go public in the United States after filing for the potential IPO with the US Securities and Exchange Commission (SEC), the startup said.

Background: In 2021, the Silicon Valley startup secured USD 250 mn in a series F funding round that saw the participation of Abu Dhabi Growth Fund and G42, valuing Cerebras at USD 4 bn. Additionally, G42 inked a USD 100 mn agreement with Cerebras last year to deliver nine AI supercomputers, three of which will be purchased by the Emirati AI firm.

BANKING-

RAKBank rated A: Capital Intelligence affirmed the National Bank of Ras Al Khaimah’s (RAKBank) A long term foreign currency rating and an A1 short term foreign currency rating with a stable outlook, according to a disclosure (pdf).

REAL ESTATE-

Samana Developers unveils Dubailand project: Dubai-based Samana Developers has launched Samana Avenue, a new “affordable luxury” development in Dubailand’s Dubai Land Residence Complex, according to a press release. The 16-storey residential project will contain 165 units and is scheduled for delivery by December 2027. Samana also has 17 new projects in its pipeline for 2024, the release said.

JUDICIARY-

CBUAE + Dubai Courts link case management systems: The Central Bank of the UAE (CBUAE) inked an MoU with Dubai Courts to digitally connect their court case management systems, according to a statement (pdf). The partnership aims to help expedite the implementation of the Courts’ orders and decisions.

TECH-

Vertiv to develop 16 MW data center for GDH: Database manager Gulf Data Hub (GDH) struck a multi-year partnership with US digital infrastructure and data center developer Vertiv to build a new 16 MW data center for GDH in Dubai, Wam reports. Located in Dubai Silicon Oasis, the data center will focus on advancing biotech research and renewable energy generation in the emirate. The new facility will be built utilizing Vertiv’s digital infrastructure to enhance GDH’s operational and power usage efficiency.

Investors are piling into Turkish assets as the country’s reform program bears tentative fruit

Turkey is getting accolades for its economic policy turnaround: Turkish President Recep Tayyip Erdogan turned heads last week with news that Turkey has returned a USD 5 bn central bank deposit to Saudi Arabia, a vote of confidence in the country’s economy. This shortly after Moody’s raised Turkey’s credit rating two notches from B3 to B1 — its first raise in over a decade.

Investors have already taken note: Far from the emerging market menace of yore, Turkey has become the belle of the ball, with nearly USD 30 bn being channeled from abroad into Turkish stocks and bonds since May 2023, Bloomberg reports. There has been a 6.3% rise in TRY-denominated bonds in the same period — far outstripping the average of 1.1% in similar emerging markets — and the Borsa Istanbul100 stock index has been among the best performing in the world.

Turkey’s ascent to emerging market darling was not always in the cards: Decades of unorthodox monetary policy saw the Turkish central bank cut interest rates in the face of double-digit inflation and engage in market-confounding about-faces on policy that prompted foreign investors to run for the hills. Central bank attempts to challenge Erdogan’s unconventional economic views by raising interest rates saw offending technocrats fired and replaced by more pliable alternatives.

What’s changed? Most observers mark the June 2023 appointment of former economy chief Mehmet Simsek as treasury and finance minister as the inflection point that set the country on its current trajectory. Within nine months of his appointment, Simsek and new leadership at the central bank had hiked interest rates a whopping 41.5 percentage points, from 8.5% in June 2023 to 50% in March 2024. The timing of Simsek’s appointment was no accident either, coming one month after tight presidential elections saw Erdogan squeak his way into a third term.

Despite apparent commitment to reform, those in the know suggest taking the turnaround with a pinch of salt. Observers caution that the policy shift is still in its early days, with significant room for a reversal should electoral exigencies come into play. The country also continues to see inflation rates above 70%, with the fruits of newly-appointed Fatih Karahan ’s punishingly tight monetary policy yet to fully materialize.

THE MARKETS THIS MORNING-

It’s red as far as the eyes can see as Japan’s benchmark index, the Nikkei, slid 5% as investors mulled the decision of the Bank of Japan to cut rates earlier this week and a resurgence in the JPY. South Korea’s Kospi also tumbled 2.71%, while the Topix fell 4.4%.

Wall Street futures are also falling after a market rout yesterday, as a disappointing batch of earnings from Big Tech fuels worries in the market.

	ADX	9,367	+0.3% (YTD: -2.2%)
	DFM	4,280	+0.3% (YTD: +5.4%)
	Nasdaq Dubai UAE20	3,735	+0.4% (YTD: -2.8%)
	USD : AED CBUAE	Buy 3.67	Sell 3.67
	EIBOR	5.0% o/n	4.9% 1 yr
	TASI	12,046	-0.5% (YTD: +0.7%)
Down	EGX30	29,360	-0.1% (YTD: +17.9%)
	S&P 500	5,447	-1.4% (YTD: +14.2%)
	FTSE 100	8,283	-1.0% (YTD: +7.1%)
	Euro Stoxx 50	4,766	-2.2% (YTD: +5.4%)
	Brent crude	USD 79.81	+0.4%
	Natural gas (Nymex)	USD 1.97	+0.2%
	Gold	USD 2,497.3	+0.7%
	BTC	USD 64756.05	-0.15% (YTD: +46.6%)

THE CLOSING BELL-

The DFM rose 0.3% yesterday on turnover of AED 488.8 mn. The index is up 5.4% YTD.

In the green: Watania International Holding (+8.5%), Shuaa Capital (+5.1%) and Dubai Refreshment Company (+5.0%).

In the red: National International Holding Company (-9.8%), Al Ramz Corporation Investment and Development (-7.0%) and International Financial Advisors (-4.3%).

Over on the ADX, rose 0.3% on turnover of AED 1.1 bn. Meanwhile Nasdaq Dubai rose 0.4%

UAE + Azerbaijan develop economic ties

UAE + Azerbaijan bolster partnership: Azerbaijan and the UAE discussed expanding economic partnerships across various sectors, including tourism, logistics, industry, agriculture, SMEs, technology, and renewable energy during an intergovernmental committee session chaired by Economy Minister Abdullah bin Touq Al Marri and his Azerbaijani counterpart Mikayil Jabbarov, Wam reports.

The UAE and Azerbaijan agreed to establish joint work teams to explore further economic cooperation in priority industries across the private and public sectors.

The delegations also agreed to provide support for exporters and importers in a bid to boost bilateral trade and facilitate Azerbaijani exports to regional markets. The session also explored launching initiatives to support startup growth and boosting investments, particularly in the food and manufacturing industries.

President Sheikh Mohamed bin Zayed Al Nahyan held a private meeting with Egyptian President Abdel Fattah El Sisi in New Alamein City in Egypt, where they discussed strengthening bilateral ties between the UAE and Egypt and enhancing cooperation across key sectors, according to Wam. The two heads of state also addressed the regional developments and reaffirmed their commitment to continuing coordination.

Foreign Minister Abdullah bin Zayed Al Nahyan discussed the escalating regional tensions with US Secretary of State Antony Blinken over a phone call, Wam reports. The two ministers addressed the situation in Gaza, affirming the need for a ceasefire. The conversation also covered the situation in Sudan.

OTHER DIPLO NEWS-

The UAE has dispatched a humanitarian aid plane to the Philippines in response to the devastation caused by Typhoon Carina. (Statement)

My Morning Routine: Paolo Casamassima, CEO of the Middle East Investor Relations Association

Paolo Casamassima, CEO of the Middle East Investor Relations Association: Each week, My Morning Routine looks at how a successful member of the community starts their day — and then throws in a couple of random business questions just for fun. Speaking to us this week is Paolo Casamassima (LinkedIn), CEO of the Middle East Investor Relations Association (MEIRA). Edited excerpts from our conversation:

My name is Paolo Casamassima. I am the CEO of the Middle East Investor Relations Association, also known as MEIRA — the go-to professional body for investor relation professionals across the GCC region, with over 170 members, mainly corporates, as well as investor relation advisors.

We cater to our members across 10 different countries. We have chapters across the UAE — Abu Dhabi and Dubai — and Bahrain, Jordan, Kuwait, Lebanon, Oman, Palestine, Qatar, and Saudi Arabia, with a couple more chapters that we're looking to establish in the future.

I’m British-Italian — born in Italy, to Italian parents, but moved to the UK at the age of 21 and spent the next 18 years and most of my professional career there, until my relocation to the UAE. I've worked as an investor relations advisor across three different businesses — Orient Capital, King Worldwide, and Ipreo, which is now Standard & Poor’s — supporting publicly listed companies globally with their investor relations programs. I have also built in the UK a business called Bighous, which is a social impact business that helps homeless and vulnerable people, or people with troubled backgrounds like orphans and victims of family abuse, with housing. I manage it from Dubai.

MEIRA operates across a number of areas. First and foremost, we have a number of networking events of IR professionals across the region — the so-called chapter meetings — to allow them to learn and grow their investor relations knowledge and ultimately become better IR officers. We provide a number of tools in that respect, including an education program — a proper qualification called the certified investor relation officer program.

We run a number of paid and unpaid events alongside our partners, such as webinars and workshops, on topics that range from very generic investor relation programs to more specific courses that could focus, for example, on ESG and financial literacy. We also do sector-specific courses for IROs working in a specific sector, like telecoms, oil and gas, utilities, etc. All of these tools are aimed to equip the investor relation officer to raise the standards of investor relations, which will ultimately drive the valuation of publicly listed companies across the GCC region.

For the region, historically and until a few years ago, the investor relations figure within a publicly listed company was more of a marketing and communications figure, considered to be a person that handles queries with the media, and sometimes with investors. Only through the support of the GCC exchanges is the education towards this function growing. We are working closely with them and other regulators to be able to make sure that the investor relations function does what it is supposed to do and what it has been doing in Western countries for decades.

The IR officer is supposed to ensure stakeholders and current and prospective shareholders are informed about what is happening with a publicly listed company, and ultimately should aim to achieve fair valuation of a specific stock.

When companies go public, it’s not just a matter of creating a liquidation event for the founder and the shareholders, but that's supposed to drive the valuation of the business up and improve access to further funding, because you're ultimately aiming to find the right capital structure for the business. I would say that the challenge is that a number of corporates in the region, in comparison to [capital markets in] the Western world, still have a relatively small freefloat, which is the number of shares that are traded on the exchange, making for a very retail-focused shareholder base.

If a company has 100 shares, many companies will go for a 20-30% freefloat. That's often not enough to attract institutional investors because there will not be enough shares or enough liquidity, and the large funds want to invest big tickets. They need to come in, and at some point they'll need to come out, and there needs to be enough trading to enable that mechanism. This is one of the challenges that IR officers are facing. We’re working with market participants — the IR officers, the regulator, and the exchanges — to try to improve that.

I think that the role of the investor relations officer is changing and becoming a lot more professional and will reach the point where in five years, if we want to be ambitious, or 10 years, if we’re realistic, it will be among the top three positions alongside the CEO and the CFO. You’ll have the CFO, CEO, and the chief investor relations officer.

I spend maybe 80% of my time meeting and engaging with our members and prospective members. I am a big fan of face-to-face meetings, so I struggled a little bit when, in the last two years in London after covid, all meetings went online. When I was traveling to the region, I noticed that people here still do meet in person and they don't do online meetings very much.

There's a lot of traveling, given the fact that we cover 10 countries. We organize events on a quarterly basis across different regions. There could be a week to 10 days where I'm off on the road and I will do one country per day. When I'm in the UAE, we usually spend quite a lot of time, besides the organization of events, planning our annual conference — probably 50% of the time. I started planning for this year’s event in December last year, and I'm already planning the 2025 event right now.

This year, for the first time, we have also created a new category in our awards segment for ESG and sustainability, with a view to award and recognize the best reports and practitioners in the field of ESG and sustainability.

I start my day with a triple espresso around 5 or 6am in the morning. While I'm preparing the espresso, I'll do 30 to 50 pushups and I will then take my kids to school. It's a routine that I particularly enjoy, because sometimes I don't get to see them much throughout the day, or if I'm traveling, I don't see them at all.

There is one thing that I try not to skip every week. One of my children, Leonardo, who’s 8 years old, is very good at football, and he plays for both Juventus and Paris Saint Germain. He plays two different leagues and plays six times a week. My wife and I spend pretty much the whole day on Sunday taking him around different football pitches. I support Juventus, so the fact that he plays for Juventus is a dream, and when I go, I’m the loudest dad.

I have an agenda to organize my time, and the pages are divided into four — important, urgent; not important, urgent; important, not urgent; and not important, not urgent. I write all my tasks there usually on Sunday, and I try to complete 75% of what's on the agenda by the end of the week.

At the end of the day, I like to put the kids to sleep. I think putting the kids to sleep really changes the energy in your body and mind and makes you calmer. You need to be calm to be able to put them to sleep.

I try not to watch TV. We may watch a Netflix movie once every two weeks, but I am a big supporter of not having TVs or too much technology because it's very addictive and it has a negative impact on your children’s development and education. I prefer to listen to music.

I think the best advice I’ve gotten is that if you really want something and if you put your mind and your heart into achieving a goal, you will get there. In 2022, I started to travel to the Middle East, and one day I told my wife, I think I want to get a job in Dubai. I set a goal to get a job here, and I got a job that I couldn’t even imagine at the time. In 2020, my father was diagnosed with lymphoma, and was given six months to live, and my wife and I relocated to Italy to help him. He's still with us four years after we found an experimental chemo drug. So my advice would be to make some radical decisions, and if you really want something, it’s in your hands to get it.

CALENDAR

AUGUST

2 August (Friday): Abu Dhabi Extreme Championship, Mubadala Arena, Abu Dhabi.

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

14 August (Wednesday): UAE to participate in ceasefire talks co-mediated by the US and KSA between the warring factions in Sudan.

20-21 August (Tuesday-Wednesday): The World ESG Summit, Dubai.

21-22 August (Wednesday-Thursday): Rex Fuels Global Expo & Conference 2024- Bitumen, Petrochemicals & Products, Dubai.

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

25 August (Sunday): Deadline to register for the AI Challenge.

Signposted to happen sometime in mid-August:

New regulations on telemarketing calls will go into effect

SEPTEMBER

4-5 September (Wednesday-Thursday): 2024 International Government Communication Forum, Expo Centre Sharjah, Sharjah.

5 September (Thursday): Deadline to apply for the sixth edition of Access Sharjah Challenge.

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

10-11 September (Tuesday-Wednesday): MENA PPP forum, Jumeirah Emirates Towers, Dubai.

10-11 September (Tuesday-Wednesday): MENA District Cooling Projects & MENA Cool Forum, Grand Hyatt Dubai, Dubai Healthcare City, Dubai.

11-12 September (Wednesday-Thursday): MENA oil and gas digitization conference, Abu Dhabi.

16-18 September (Monday-Wednesday): World Utilities Congress, Abu Dhabi.

23-25 September (Monday-Wednesday): WorldFreezonesOrganization’s Annual International Conference and Exhibition, Dubai.

25-26 September (Wednesday-Thursday): Green Steel Summit, Dubai, UAE.

25-26 September (Wednesday-Thursday): Global Aerospace Summit, Abu Dhabi, UAE.

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

30 September (Monday): Dubai Podfest, World Trade Center, Dubai.

OCTOBER

1-3 October (Tuesday-Thursday): Water, Energy and Environment Technology Exhibition, Dubai.

2-3 October (Wednesday-Thursday): The World Green Economy Summit, World Trade Center Dubai.

7-8 October (Monday-Tuesday): Forex expo, World Trade Center, Dubai.

8-9 October (Tuesday-Wednesday)): Global Trade and Supply Chain Summit, Dubai.

8-10 October (Tuesday-Thursday): The Global Rail Transport Infrastructure Exhibition and Conference(Global Rail), Abu Dhabi.

14-18 October (Monday-Friday): IEEE/RSJ International Conference on Intelligent Robots and Systems, Adnec Centre, Abu Dhabi.

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.

21-22 October (Monday-Tuesday): Port Development MEA Forum, Dubai.

21-22 October (Monday-Tuesday): Roads, Bridges, Tunnels MENA Conference, Dubai.

21-22 October (Monday-Tuesday): The Alternative Investment Summit, Dubai.

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

26-27 October (Saturday-Sunday): International Conference on Tourism, Transport, and Logistics, Dubai.

28-29 October (Monday-Tuesday): MENA Climate Proof Forum, Dubai.

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

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

NOVEMBER

3-10 November (Sunday-Sunday): Dubai Premier Padel P1, Dubai Dutyfree Tennis Stadium, Dubai.

4-7 November (Monday-Thursday): ADIPEC, Abu Dhabi.

4-7 November (Wednesday-Saturday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi.

4-7 November (Wednesday-Saturday): ADIPEC Decarbonisation Accelerator, Abu Dhabi.

6 November (Friday): World Finance Forum, Dubai.

11 November (Monday): Dubai Diamond Conference, Jafza One Convention Centre, Dubai.

11-12 November (Monday-Tuesday): META Cinema Forum, Dubai.

11-14 November (Monday-Thursday): Abu Dhabi International Petroleum Exhibition & Conference, Abu Dhabi.

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

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

20-22 November (Wednesday-Friday): Xpanse Abu Dhabi, Adnec Centre, Abu Dhabi

22-23 November (Friday-Saturday): Global Meet on Electronics & Electrical Engineering (GMEEE), Dubai.

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

26-27 November (Tuesday-Wednesday) Global Food Security Summit, Adnec Centre Abu Dhabi.

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

Signposted to happen ahead of ADIPEC:

Changemakers Majlis, Abu Dhabi.

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.

10-12 December (Tuesday-Thursday): Middle East Investor Relations Association (MEIRA), Conrad Abu Dhabi Etihad Towers Hotel, Abu Dhabi.

JANUARY 2025

1 January (Wednesday): ADGM to slash licensing fees for retail and non-financial firms, and hike fees for finance firms.

14-16 January (Tuesday-Thursday): World Energy Summit, Abu Dhabi.

FEBRUARY 2025

24-25 February (Monday-Tuesday): 3rd World Passenger Experience Forum, Dubai.

24-26 February (Monday-Wednesday): Connecting Hydrogen MENA, Dubai.

APRIL 2025

16-17 April: Global Ports Forum, Dubai.

MAY 2025

26-28 May (Monday-Wednesday): Arab Media Summit, World Trade Centre, Dubai.

OCTOBER 2025

27-29 October (Monday-Wednesday): Asia Pacific Cities Summit, Dubai Exhibition Centre.

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.
TBD: e& will complete Adnoc’s private 5G network.

Signposted to happen sometime in the fall of 2025:

2025 Games of the Future, Dubai.

Signposted to happen sometime in 2028:

Abu Dhabi to host the 47th Chess Olympiad.

Signposted to happen sometime in 2029:

Dubai to host the International Conference on Computer Vision.

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