Good morning, lovely people, and happy FRIDAY and first day of November. We have a busy issue for you this morning, with data on the UAE’s job market in 3Q 2024, Julphar divesting one of its units, and Google investing a lot in the UAE — and the region’s — AI sector.

🍛FIRST- Abu Dhabi’s Michelin guide is out: Four Abu Dhabi restaurants maintained their one michelin star rating — 99 Sushi Bar, Erth, Hakkasan, and Talea by Antonio Guida — while a couple of new ones were handed Bib Gourmand status and 37 were classified as Michelin selected restaurants. You can find the full list here.

WEATHER- The mercury peaks at 35°C in Dubai today, before cooling to an overnight low of 29°C. Over in Abu Dhabi, expect a high of 30°C and a low of 28°C.

PSAs-

#1- You’ll be paying more at the pump this month: The Fuel Price Committee hiked fuel prices for November by around 3% after an 8% price cut last month, according to a Facebook post by the Emirates General Petroleum Company.

The breakdown per liter:

  • Super 98 is now AED 2.74;
  • Special 95 is now AED 2.63;
  • E-Plus 91 now costs AED 2.55;
  • Diesel is now AED 2.67, up from AED 2.60 last month.

Taxi fare prices in Ajman are rising in tandem to reach AED 1.77 per km, according to an X post. This is a 0.2 fils increase from October’s AED 1.75 per km fare.

#2- Residents breaching residency regulations have another two months of amnesty to rectify their status without paying any fines, with the amnesty program extended from 31 October to 31 December, according to a decision by the Federal Authority for Identity, Citizenship, Customs, and Port Security. The grace period allows violators to either obtain an employment contract or exit the UAE without incurring legal penalties.

ICYMI- The visa overstay amnesty program, initiated in early September is designed to assist individuals in resolving their visa issues without incurring a fee for receiving a stamp banning them from re-entering the UAE.

WATCH THIS SPACE-

#1-Future of mBridge uncertain after BIS quits: The Bank for International Settlements (BIS) will stop working on mBridge, the cross-border digital payments platform under development by the UAE, China, Hong Kong, Thailand, and Saudi Arabia, as it looks to distance itself from the project linking Global South countries and Russia, Reuters reports.

The rationale: The bank said it would step aside due to the project’s involvement with Russia, which is a sanctioned country

#2- Asset manager BlackRock is launching five funds with Aditum Investment Management for UAE investors, Citywire reports. The BlackRock Aditum dynamic high-income fund, global allocation fund, global multi-asset income fund, sustainable energy fund, and world health science fund were incorporated on 25 October in the Dubai International Financial Center.

REMEMBER- Auditum debuted four public funds in the Dubai International Financial Center (DIFC) earlier in June. The firm has integrated 10 funds into its incorporated cell company structure so far. with the newly-launched four funds receiving initial subscriptions in May. Additionally, an eleventh fund is currently in the incorporation process. Aditum had also been planning to introduce an Islamic multi-asset fund and a global fixed-income strategy.

#3- Emirates Airlines, Amazon, Careem, and Gems Education will participate in the Gig Economy Sandbox initiative, according to the Dubai Future Foundation, the Dubai Media Office reports. Part of the startup program Sandbox Dubai, the Gig Economy Sandbox focuses on creating regulations for sectors that require seasonal workers, including retail, hospitality, tourism, aviation, education, transport, and logistics.

SPEAKING OF EMIRATES- The airline is grappling with major setbacks to its growth plans due to Boeing and Airbus’ aircraft delays, Bloomberg reports. These setbacks have hindered Emirates from being able to pursue expansion plans, and have cost it an estimated USD 4 bn in extra costs to refurbish the existing fleet, COO Adnan Kazim told Bloomberg. Although Emirates is receiving compensation for the delays, the costs to overhaul the fleet far exceed what the airline is being reimbursed. “With how the growth is coming in, we are definitely in need of these aircraft now or yesterday even,” he said.

REFRESHER- Boeing has delayed the 777X delivery multiple times, most recently in July. Following the July schedule, Emirates’ Tim Clark said that he “would not take kindly” to further delays caused by a growing backlog of orders, and that he doesn’t expect Boeing’s 777X aircraft to enter commercial services before 2026.

#4- India’s Income Tax (I-T) department’s Foreign Asset Investigation Unit (FAIU) is cracking down on Indian nationals with undeclared Dubai properties, issuing some 100 notices last week alone, the Economic Times reports, citing sources it says are in the know. The move follows data from UAE authorities revealing properties owned by Indian passport holders who spend less than 90 days a year in the UAE — below the 90-day threshold for residency and the 181-day period granting tax treaty protections with India.

What’s next? The FAIU notices request evidence that funds used to buy Dubai properties come from legitimate sources declared in I-T returns. If individuals can verify these funds as taxed income, they can avoid “a heavy tax and fine” under the Black Money Act, even if the property wasn’t initially declared. Meanwhile, untraceable funds could incur penalties potentially above the property’s value.

#5- Mubadala to tap into Brazil’s SAF industry? Mubadala-backed Brazilian sugarcane processor Atvos is mulling setting up sustainable aviation fuel (SAF) plants in Brazil to capitalize on the country’s potential “to be the world’s SAF hub,” Atvos COO Bruno Serapião told Bloomberg. Atvos is looking to invest in a SAF unit that will utilize alcohol-to-jet technology to convert ethanol into aviation fuel.

Brazil’s SAF market is poised for rapid growth, bolstered by its status as the world’s second-largest producer of ethanol — crucial for SAF production — and a strong agriculture sector.

ICYMI- Mubadala is already investing in Brazil’s biofuels sector, with plans for a USD 13.5 bn biofuels project over the next 10 years to produce renewable diesel and SAF.

REFRESHER- Last year, Mubadala Capital acquired Grupo Novonor’s 6.85% stake in Brazilian sugarcane processor Atvos, raising its total stake to 38.35%.

HAPPENING TODAY-

#1- Dubai is hosting the World Cities Cultural Summit through to Friday. The summit probes how cities can create a fostering environment for artists and entrepreneurs, while addressing global challenges, such as the climate crisis and AI.

#2- The Global Conference on Economic Diversification wraps today at The Mohammed bin Rashid School Of Government. The event features panel discussions, roundtables, and workshops focused on the results of the Global Economic Diversification Index and policies related to economic diversification.

OIL WATCH-

Another delay? Opec’s planned oil output hikes in December could be pushed back for another month or more amid persistent concerns of soft oil demand and a glut in supply, four sources close to the matter told Reuters.

REMEMBER-Opec+ initially planned to start phasing out production cuts in October, but later pushed the plans back to December as oil prices fell.

MORNING MUST READ-

Why are energy players behind on AI? Though investors are betting heavily on AI, with USD 250 bn injected into the field, only 5% of the money poured into the technology is focused on the energy sector — despite its potential to drive the transformation to carbon-free technology, according to a joint report (pdf) published by Adnoc, Masdar, and Microsoft. The report includes insights from over 400 business leaders in the tech, energy, and finance sectors, including Jensen Huang, Nvidia’s CEO, Larry Fink, BlackRock’s CEO, and Patrick Pouyanne, head of French energy giant TotalEnergies.

AI can offer a lot to the sector: Advanced tools are now capable of detecting methane leaks with greater precision, a technology that is expected to help slash methane emissions by 30% by 2030.

The report also addresses one of AI’s major shortcomings and limitations towards a sustainable future: its contribution to global emissions due to its heavy energy demands. Given AI’s rapid growth, data centers’ electricity demand is expected to increase by 2-20% between 2023-2030, and is projected to represent 0.26% of global energy demand by 2026.

In order to offset its contribution to global carbon emissions, the report suggests six potential solutions, including optimizing storage systems and developing more of the energy-efficient small language models to carry out simpler tasks instead of large language models, which consume more energy.

THE BIG STORY ABROAD-

It’s all AI and earnings in the foreign press this morning. More tech firms are piling on investors’ disappointment with ramped up spending on AI amid smaller returns, while others are defending their increased spending.

#1- Apple’s earnings came in lower than expected, with the tech giant also forecasting slower-than-expected holiday sales. Shares fell 2% in after hours trading. (Reuters | Financial Times | Bloomberg)

#2- Amazon CEO Andy Jassy defended the increase in spending on AI, calling it a “once-in-a-lifetime opportunity” with a “multi-USD bn revenue rate,” as the company reported better-than-expected earnings for 3Q 2024. (CNBC)

#3- Intel — falling on the opposite side of the spectrum as a company that has fallen behind on AI investments — reported USD 16.6 bn in losses, but remained optimistic about future revenues amid anticipated growth in its PC and server businesses. (Reuters | WSJ)

Market reax: This set of earnings sent tech shares falling, with the S&P 500 and the Nasdaq both falling around 2%.

IN NON-EARNINGS AI NEWS- OpenAI just released new search features for ChatGPT, allowing users to search directly on the software, which will then pull up relevant links with their sources. (Reuters | Bloomberg)

And your regularly scheduled update on the situation in the Middle East: Hamas has reportedly rejected an Egypt-, Qatar-, and US-brokered proposal that would have seen a number of Israeli hostages received, without a pledge to withdraw forces from Gaza. Meanwhile, Israeli officials met with US envoys Amos Hochstein and Brett McGurk to discuss a separate potential ceasefire in Lebanon, as Israel continued to strike southern and eastern Lebanon. (France24 | Semafor)

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