Good morning, wonderful people, and a very happy FRIDAY to us all. It’s been one of the busiest weeks of news in months, with ADQ tapping debt markets for the second time this year, tons of M&A updates and real estate investments, and a whole bunch of AI news. In today’s issue, we have the latest on ADQ’s USD 2 bn bond issuance, which was 4.1x oversubscribed, plus a host of news on the energy, crypto, and hospitality fronts.

BUT FIRST, A FEW CAPITAL MARKETS UPDATES-

#1- Lunate’s German ETF goes live on ADX: Lunate Capital listed its Chimera S&P Germany UCITS ETF on the ADX yesterday, Wam reports. Launched earlier this month, the ETF tracks the S&P Germany BMI Liquid 35/20 Capped Index, featuring the top 30 listed German companies like Siemens, Allianz, Bayer, and Mercedes-Benz.

The listing brings the total number of ETFs listed on UAE stock markets to 17 ETFs and marks ADX’s 15th, “[opening] a gateway for investors to access one of Europe’s most dynamic economies, with exposure to sectors like automotive, healthcare, and technology,” ADX group CEO Abdulla Alnuaimi said.

#2- ALSO HAPPENING YESTERDAY- The DFM hit a 10-year high, with the general index rising above the 4500-point mark for the first time since 2014, Mubasher reports. The index closed up 0.84%.

WEATHER- It’s another foggy morning in Dubai and Abu Dhabi, the National Center of Meteorology says, so drive slow and stay safe, folks. The mercury hits 38°C in Dubai, with an overnight low of 32°C. Over in Abu Dhabi, the highest it will get will be 33°C — although it feels like 44°C, according to our favorite weather app — before cooling to 30°C overnight,

WATCH THIS SPACE-

#1- Dubai-based real estate developer Union properties will invest over AED 6 bn in three Motor City projects over the next 18 months, CEO Amer Khansaheb told Al Khaleej. The first project, Takaya, is a AED 2 bn development featuring three towers, along with 39 townhouses, five villas, and 55k sqft of retail space. The second project, also valued at AED 2 bn, includes four towers connected by a podium and 3% retail space. The third AED 2 bn project is currently in the design and planning phase.

The company wants to capitalize on land funding: Union Properties sold AED 1 bn worth of land over the past 18 months to improve solvency, repay debts, and support ongoing projects. The developer plans to retain 10 mn sqft of its 16 mn sqft land bank, with a developmental investment value of AED 18 bn. The sales aim to reduce debt from AED 750 mn to AED 400 mn by the end of FY 2024, according to Khansaheb.

ICYMI- The Motor City developer settled debt it had accumulated during the 2009 property market correction in February with Dubailand and Emirates NBD, securing a no-objection certificate from Dubailand to repurpose Motor City land for new projects and reaching a debt settlement of AED 850 mn with Emirates NBD.

#2- A new DIFC hosting platform will allow hedge funds to set up shop faster: London-based Capricorn Fund Managers launched a regulatory hosting platform that will enable hedge funds and investment firms to operate in Dubai under its own Dubai International Financial Center (DIFC) license, according to a statement.

#3- DP World is reportedly in talks with the Mexican government to establish an industrial complex that would see it handle cargo heading to the US from southern states, chairman and chief executive Sultan Ahmed bin Sulayem told the Wall Street Journal. DP is seeking a Mexican port with enough land to accommodate a huge industrial park in a bid to mirror the success of Jebel Ali Freezone. “We would love to have a combination of both port and industry … It really provides a lot of cargo for the port and makes it so easy for people producing to ship it immediately,” Sulayem said.

Not giving up on US ambitions: The move would further DP’s ambitions to tap into the US trade market, while building on existing networks the company has established to the north of the US in Canada with its five terminals on the East and West coasts. The company divested its assets in five US East Coast terminals back in 2006 due to heightened security fears regarding critical infrastructure ownership following the September 11 terrorist attacks.

#4- Pakistan has secured significant financing commitments from the UAE, China, and Saudi Arabia as part of a new International Monetary Fund (IMF) program, Reuters reports, citing IMF Pakistan Mission Chief Nathan Porter. These assurances go beyond a USD 12 bn debt rollover owed to these countries by Pakistan. While details of the UAE’s additional contribution weren’t disclosed, the new funds are part of a broader effort to stabilize Pakistan’s economy.

REMEMBER- Pakistan obtained assurances from the UAE, Saudi Arabia, and China to roll over USD 12 bn in debt for a year in August. The government has already agreed to roll over two USD 1 bn deposits in January 2023 and January of this year, after originally having granted Pakistan the loan in 2019 under a USD 3 bn financial assistance package deposited with the State Bank of Pakistan.

#5- Abu Dhabi-backed chipmaker aims to raise up to USD 1 bn in IPO: Abu Dhabi-backed Cerebras Systems, an AI-focused chipmaking startup, is looking to raise between USD 750 mn to USD 1 bn from its IPO in New York, potentially valuing the company at USD 7-8 bn, Bloomberg reports, citing people with knowledge of the matter. Cerebras plans to file for the IPO with the US Securities and Exchange Commission as soon as today, with an investor roadshow following in the coming weeks.

ICYMI- We knew this was coming: Cerebras revealed last month plans to IPO in the US as early as October. The company tapped Barclays to join advisers on offering, and reportedly appointed Citigroup as the lead bank in April.

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.

#5- Digital Dubai is launching a “Dubai Data and Artificial Intelligence Platform” to centralize official data and statistics in partnership with Digital Dewa subsidiary Moro Hub, according to a Dubai Media Office statement. Work on the platform is expected to commence by the end of the month.

PUBLIC SERVICE ANNOUNCEMENT-

UAE airlines extend their suspension on Beirut flights as violence escalates between Israel and Hezbollah, resulting in over 620 deaths in Lebanon since Monday. Etihad Airways, flydubai, and Air Arabia have indefinitely suspended their services to Beirut, Dubaieye reports

Emirates has also extended its pause until at least 1 October, according to a travel update.

DATA POINT-

The Central Bank of the UAE is out with its own data (pdf) confirming growth in the UAE’s residential markets in 1H 2024.

Abu Dhabi: In Abu Dhabi, apartment sales surged 39% y-o-y, although villa sales faced a significant drop of 34.8%, resulting in a 2.3% overall increase in residential transactions for the emirate. The apartment sales index climbed 6.2% y-o-y in 2Q, outperforming the 3.9% y-o-y rise seen in the villa segment. On the rental front, Abu Dhabi’s apartment rent index grew 6.6% y-o-y, while villa rents increased by 2.5% in the same period.

Over in Dubai: The emirate recorded a 34.8% increase in residential sales transactions, largely fueled by a 40.3% y-o-y rise in apartment sales. The apartment rent index in Dubai saw a 10.1% increase y-o-y in 2Q 2024, while villa rents rose by 9.7% in the same quarter.

HAPPENING TODAY-

#1- The 2024 Asia Pacific Group on Money Laundering (APG) annual meeting kicked off on Sunday and will run until today in Abu Dhabi, marking the first time the forum is held in the Middle East, state news agency Wam reports.

#2- Foreign Affairs Minister Sheikh Abdullah bin Zayed Al Nahyan, is heading the UAE delegation at the UN General Assembly, which will wrap up on 30 September, Wam reports.

The UAE is among several countries invited to talks planned today to discuss a six-point plan proposed by Brazil and China for dialogue between Russia and Ukraine, Reuters reports. The proposal has already been rejected by Ukrainian President Volodymyr Zelenskiy.

Also expected to attend the talks: Colombia, Egypt, Indonesia, Mexico, Saudi Arabia, and South Africa.

#3-The Dubai Crown Prince is off to Uzbekistan: Dubai Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum departed for an official visit to Uzbekistan yesterday, state news agency Wam reports. He will meet with President Shavkat Mirziyoyev and senior officials to discuss enhancing cooperation and expanding bilateral ties.

MARKET WATCH-

Opec+ on track with December oil hike: Opec+ will proceed with a planned oil production increase in December, but first needs to reduce output to address overproduction by some members, Reuters reports, citing unnamed sources. The group will raise output by 180k barrels a day, with Iraq and Kazakhstan pledging cuts to compensate for exceeding quotas earlier. This move is not aimed at regaining market share but involves phasing out voluntary cuts.

REMEMBER- The oil cartel had initially planned to start phasing out production cuts in October, but later scrapped the plans as oil prices continued to fall. The UAE is set to raise production in 2025, after Opec+ granted it a higher production quota of 3.5 mn barrels per day in 2025, up from the current 2.9 mn.

THE BIG STORY ABROAD-

Israel’s ongoing attack on Lebanon is still dominating front pages this morning, as Israeli Prime Minister Benjamin Netanyahu vowed to continue with attacks with “all [their] strength,” despite increased pressure from foreign and Arab leaders for a ceasefire.

The US and France have been leading calls for a ceasefire, with attempts to secure an end to fighting between Israel and Hezbollah for 21 days. Rejecting those calls, Israel expanded its campaign yesterday to the Syrian border, killing a total of 92 people across the country, according to a Financial Times tally. Netanyahu is set to address the UN General Assembly later today.

Pressure is also increasing on the US to interfere and put an end to the fighting, with diplomatic advisor to the UAE president Anwar Gargash saying they should not “shy away” from exercising their influence, Bloomberg reports.

IN BUSINESS NEWS- OpenAI is still getting plenty of play in the foreign press, this time as it looks to give CEO Sam Altman a stake in the company, amid an exodus of high-level executives.This is part of a wider plan for the AI leader to restructure its core business into a for-profit corporation as it seeks to remove the cap on investor returns, and become more attractive to investors, Reuters reports.

REMEMBER-State-backed AI investment firm MGX is in talks to participate in OpenAI’s multi-bn USD fundraising round, which could see it raise up to USD 6.5 bn and secure a valuation of around USD 150 bn. This is one of many moves it’s taking to cement its place as a major AI investor — after backing a new USD 30 bn AI infrastructure fund launched by BlackRock and Global Infrastructure Partners earlier this month.

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