Good morning, friends. We have a round robin of news updates from various subsectors of the industry across the region this morning, with some M&A and trade updates from Saudi and the UAE. But first, there’s a spot of oil disruption emerging across the Atlantic this morning…

THE BIG STORY ABROAD- Hurricane Francine makes landfall in Louisiana, disrupting oil and gas industry: Nearly 39% of crude oil production and 49% of natural gas output in the Gulf of Mexico shut down yesterday ahead of Hurricane Francine slamming into the Louisiana coast yesterday evening. The Category 2 storm knocked out electricity to 250k homes along with fear of flooding. Offshore producers have shut in nearly 675k barrels per day of oil and 907 mn cubic feet of natural gas production, the US Bureau of Safety and Environmental Enforcement said in a statement. Shutting down operations will suspend nearly 15% of US domestic oil production and 2% of natural gas output.

MARKET REAX- Oil prices jumped up by over 2% yesterday driven by worries over impacted US output, Reuters reports. Brent crude futures rose USD 0.40 in early morning trading selling at USD 71.01 a barrel at 03.30 GMT, while US West Texas Intermediate (WTI) climbed USD 0.32 to trade at USD 67.63. Both contracts rose by over USD 1, over 2%, yesterday as offshore platforms and refinery operations shuttered due to the incoming hurricane.

Hurricane coverage is grabbing a lot of ink in international press: Reuters | AP | Bloomberg | The New York Times | BBC | The Independent

WATCH THIS SPACE-

#1- NMDC Energy’s shares opened at AED 3.35 on its trading debut on the ADX yesterday, up 20% from the final set price of AED 2.8. Shares closed at AED 3.02, up 7.86%. The IPO raised AED 3.22 bn after receiving more than AED 88 bn in orders, with the order book 31x oversubscribed — excluding cornerstone investors.

This marks the largest IPO of the year in the UAE, with edtech firm Alef Education’s IPO following closely, raising AED 1.89 bn but seeing a lackluster debut, with shares falling 18% on its first day of trading. Alef’s shares were trading at AED 1.17 as of yesterday — down 13% YTD.

#2- Emirati flag carrier Etihad Airways’s IPO will likely take place no sooner than in 2025, Reuters reports, citing two sources with knowledge of the matter. The ADQ-owned airline looks to demonstrate a strong performance to its investors in its 2024 financial results before making moves, one source reports. Regional geopolitical tensions and uncertainty are weighing on timing, a second source adds.

Gearing up: Etihad Airways reportedly tapped Abu Dhabi Commercial Bank, Bank of America, BNP Paribas, and Morgan Stanley in May to serve as joint bookrunners for its upcoming initial public offering. The wealth fund previously chose Citigroup, HSBC, First Abu Dhabi Bank as advisors for the IPO, and appointed Rothschild & Co. as independent financial advisor.

#3- Egypt reveals big plans for Alexandria’s Dekheila Port: Egypt is gearing to announce two public-partnership projects (PPP) for a multipurpose and a dry bulk terminal at El Dekheila Port in Alexandria valued at USD 320 mn (c. EGP 15.49 bn), Zawya Projects reports, citing comments made by the Egyptian Finance Ministry’s PPP unit Atter Hannoura at a PPP forum in Dubai. The investment for the multipurpose terminal is estimated to carry a USD 225 mn ticket, while USD 95 mn will be earmarked for building the dry port which will boast a 1.1k meter berth with a 15 meter depth, and a 300k sqm storage area.

What’s next? The government is currently negotiating with international financial firms to fund the feasibility study for the two projects. No timeline has been disclosed, but Hannoura said both projects are part of a larger pipeline slated to be tendered within the next 12-18 months.

#4- China wants to expedite freetrade talks: China’s Premier Li Qiang called for freetrade talks with the GCC, including Saudi, to be expedited during his visit to Riyadh, Reuters reports. Meeting with GCC Secretary General Jasem al-Budaiwi, Li emphasized the need to revive the long-stalled negotiations, which have been ongoing for nearly 20 years.

The caveat: The Kingdom expressed concerns over the potential influx of cheaper Chinese imports stifling domestic manufacturers.

SPEAKING OF CHINA- Crown Prince Mohammed bin Salman met with the Chinese prime minister to discuss investment, trade, and energy cooperation, SPA reports. The Chinese official landed in Riyadh on Tuesday to chair the Chinese-Saudi Joint Committee meeting and will visit the UAE too, according to the Chinese Foreign Affairs Ministry.

#5- The US Federal Aviation Administration (FAA) will lift its production cap on Boeing’s 737 Max aircrafts only if the manufacturer’s safety review process proves adequate, Reuters reports, citing comments made by FAA Administrator Mike Whitaker at an industry conference. “We need to make sure the safety metrics are exactly where they need to be to grow,” Whitaker said. The administration is slated to hold quarterly meetings with Boeing’s new CEO Kelly Ortberg starting this month.

Background: The administration capped Boeing’s 737 Max production at 38 aircrafts per month, following an incident when a panel flew off mid-flight on a 737 Max 9 in January. The FAA also gave Boeing 90 days to come up with a plan to improve quality control, which the aviation giant delivered in late May.

ICYMI- Boeing pushed back a major production goal for its best-selling 737 Max planes by six months this week. Boeing’s updated master schedule for its 737 suppliers now aims for a monthly MAX production rate of 42 by March 2025.

#6- France, Germany, and the UK are canceling bilateral air services agreements with Iran over its export of ballistic missiles to Russia, according to a joint statement. US Secretary of State Antony Blinken has said that Iran sent ballistic missiles to Russia to use in its war on Ukraine. “This act is an escalation by both Iran and Russia, and is a direct threat to European security,” the statement said. “Today, alongside our international partners, we are calling out this behavior and its attempts to undermine global security,” Reuters reports, citing UK Foreign Minister David Lammy as saying. The UK had imposed sanctions back in June on Russian cargo ships used for shipping military supplies from Iran to Russia.

#7- Electric and hydrogen fuel truck prices need to fall by up to 50% before becoming viable alternatives to diesel, Reuters reports, citing a study by consultancy firm McKinsey. The EU’s electric and hydrogen heavy freight vehicle share needs to reach 40% of new sales by 2030 to meet the bloc’s carbon reduction targets, but is currently less than 2%, the study showed.

Production costs are an obstacle: Emissions-free trucks are currently 2.5-3x more expensive to produce than diesel trucks, which deters logistics firms from deploying them, the study showed. It estimates that electric truck prices should not be more than 30% higher than traditional vehicles, with a sought cut in production costs only achieved through technological developments in batteries.

But it won’t be easy: Chinese truck makers produce cheaper products and have a 20% share of the bus market in the EU, adding another layer of difficulty to the EU’s carbon reduction goals.

DATA POINT-

DIEZ delivers robust 1H 2024 performance: The Dubai Integrated Economic Zones Authority (DIEZ) recorded a 18% y-o-y boost in net income and a 12% increase in revenues in 1H 2024, according to a statement. The firm attributed the growth to high occupancy rates and solid performances across business sectors.

Headlining the EnterpriseAM Finance Forum: We’ll be joined for the first time on stage by a senior government official, who’s joining us to outline a vision for where we’re going as a community and as an economy. The keynote interview will get underway at 9am sharp, and you won’t want to miss our exclusive networking breakfast from 8am.

Among the topics on the agenda:

  • Welcome to the hot seat — top industry CEOs set the tone by addressing the biggest (and toughest) questions of the day.
  • Looking from the outside in — what foreign investors and strategics think about Egypt right now.
  • The only asset class in town — It’s real estate or nothing. We’ll get into the ins and outs of the industry, how it’s financing itself, which areas (and price points) are next, and more.
  • Gazing into that crystal ball — The outlook for dealflow in 2025, from M&A and IPOs to securitization, FX and more.
  • A once in a generation opportunity? — A deep dive into the promise and pitfalls of the emerging energy economy.
  • Do we really love banking SMEs? — With NBFIs and fintech players staking their claims, banks are starting to take the SME market seriously.
  • The NBFI panel — The resilience of the Egyptian consumer is the business story of the decade. How are banks and NBFS players building sustainable businesses? What are the opportunities — and credit worries — in the B2B space?

Haven’t requested an invitation yet? Do it today — space is limited. Tap or click here to let us know you’re interested.

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CIRCLE YOUR CALENDAR-

The UAE will host the Intelligent Transport Systems World Congress from Monday, 16 September to Friday, 20 September in Dubai. The Congress is expected to welcome 20k participants to explore innovations in smart mobility and transportation technology.

Saudi Arabia will host the Saudi Maritime and Logistics Congress on Wednesday, 18 September and Thursday, 19 September in Dammam. The event will gather international industry leaders in the maritime sector to discuss a range of topics including interconnected logistics, supply chains, digitalization, decarbonization and workforce development.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.

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