Good morning, wonderful people. The two big headlines on a very busy morning: Investor appetite for ADX IPOs remains high and the Gulf Cooperation Council has agreed to restart trade talks with the European Union. Plus: The World Bank’s Mena economic update isn’t as bad as it seems on first glance.

BUT FIRST- Some international scuttlebutt to get your morning started:

Regional HQ? We ain’t got no regional HQ. We don’t need no regional HQ… BNP Paribas doesn’t want to have to choose between Abu Dhabi, Dubai, and Riyadh — so it’s planning to cut staff in Bahrain and “scrap Manama as its Middle East and Africa head office,” Reuters says, citing unnamed sources. All of its offices in our neck of the woods would instead report into Paris if the plan goes ahead.

MEANWHILE- Jamie Dimon seems to be the only guy on Wall Street with an appetite for Africa. He’s on a tour of the continent this week after Kenya said on Monday it would allow JPMorgan Chase to set up a rep office there and is now saying that the bank plans to enter Kenya and Ivory Coast this year. “We want to add a country or two in Africa, every couple of years or so,” he said.

Dimon’s target market: Cover governments, large state-owned enterprises, and multinationals with “traditional banking services” including commercial banking, investment banking advisory, treasury services, and probably some lending.

WORLD BANK MENA ECONOMIC UPDATE

The World Bank’s semi-annual MENA economic outlook was out overnight. The report sounds a distinct note of caution about how war in Gaza (to say nothing of Lebanon and the menace to Red Sea shipping) is an overhang on economic growth. Check out the announcement here and the report here (pdf).

The report plays up the deceleration of growth in 2024, saying that it’s been driven largely by the GCC economies. MENA economies as a whole will grow about 2.2% in 2024 — better than the 1.8% we saw in 2023, but far off the 5.8% pace we saw the year before.

We hope we’re not indulging our inner Pollyanna, but… That take masks the bank’s own forecast for a sharp pickup in growth next year. Check out (numbered) page 11, where the report’s authors are forecasting that growth in 2025 will accelerate to 3.8% across the region.

For the Big Three, the World Bank see:

  • UAE growth at 4.1% in 2025, up from 3.3% this year;
  • Saudi growing at a 4.9% clip in 2025, compared to just 1.6% this year;
  • Egypt’s economy expanding 3.5% in 2025, compared to 2.5% this year.

The worry: “Economic uncertainty in MENA is currently twice the average of other emerging markets and developing economies worldwide,” the report writes, saying its estimate is based on its measure of “the dispersion of views amongst private sector forecasters.”

What to watch for next: The report is out ahead of the kickoff next week of the World Bank and IMF Annual Meetings in Washington, DC. The meetings run Monday, 21 October through Saturday, 26 October, with the main events taking place 22-25 October.

^^ We’ll have another look at the report today and get back to you folks tomorrow if there’s anything else worth knowing.

WATCH THIS SPACE-

#1- The UAE can “guarantee the safety and the security” of AI chips “if and when they are being deployed and used here,” G42 CEO Peng Xiao said at Gitex, CNBC reports. His remarks come as the Biden administration considers imposing new restrictions on chip sales from Nvidia and others to the Middle East due to concerns over potential technology transfers to China.

In context: Xiao acknowledged US policymakers’ concerns while emphasizing the UAE’s commitment to transparency and security when it comes to sensitive technologies. The US has previously expressed worries about G42’s ties to China, prompting the company to distance itself from mainland companies earlier this year.

BACKGROUND- The UAE and the US have committed to increasing cooperation in artificial intelligence, with discussions on a government-to-government MoU on AI underway. The topic was front and center during President Sheikh Mohamed bin Zayed Al Nahyan’s meeting last month with US President Joe Biden.

#2- Emirates Reit shareholders approved Tecom Group’s AED 720 mn acquisition of the Office Park building in Dubai Internet City, according to a DFM disclosure (pdf). The two parties signed a binding MoU for the sale two weeks ago. Tecom plans to invest AED 2 bn in strategic acquisitions and developments.

#3- Moonbase to invest USD 15 mn in search funds with an eye on emerging markets: Spain-based search fund investment firm Moonbase Capital has launched its second, USD 15 mn investment vehicle, with some 40% of the funds earmarked for deployment in emerging economies. The UAE and Saudi Arabia are on Moonbase’s list, EnterpriseAM Egypt reports.

Search funds? Search funds are investment outfits that raise capital to acquire well-performing small- or medium-sized businesses (SMEs). They’ll often then bring in an experienced entrepreneur to run the business and grow the company before exiting.

The details: Moonbase’s new fund will aim for 10-15% stakes with an average ticket price of EUR 1.25 mn over the coming 3-4 years. The fund is led by Managing Partners Tamer El Bahay and Tarek El Gammal.

#4- Kenya is talking with the UAE for USD 1.5 bn loan, Reuters reports. Kenya would use the funds to plug the gap in its budget.

HAPPENING TODAY-

☀️ WEATHER- It’s another hot and sunny day in Dubai, with temperatures hitting 36°C before cooling to an overnight low of 30°C. The mercury in Abu Dhabi is set to hit 32°C before cooling a bit to 30°C overnight.

PSA-

Residents will be able to use Tabby to pay via installment for Dubai Roads and Transport Authority (RTA) services starting next week, RTA digital services director Meera AlShaikh told Khaleej Times.

THE BIG STORY ABROAD-

The race for the White House has pushed business news a bit further down the front pages with 18 days to go until voters head to the polls in the United States. Harris raised substantially more than Trump in 3Q and the two are chasing each other’s voters.

INTEREST RATE WATCH- Economists see the European Central Bank delivering another quarter-point rate cut when it meets later today — and Goldman Sachs thinks the US Federal Reserve will deliver consecutive 0.25 bps cuts from November through June 2025.

ON WALL STREET:

IN TECH- Uber’s super-app ambitions now see it kicking the tires on the acquisition of travel website Expedia. The Financial Times notes that while the transaction is in very early stages and could still go bust, Uber chief Dara Khosrowshahi was the CEO of Expedia for a dozen years ending in 2017 and is still on the site’s board of directors, “making it likely that any approach would be friendly.”

In Lebanon: Israel has stepped up its attack with further strikes and is claiming to have killed a Hezbollah commander yesterday.

OIL WATCH-

Oil product stock at UAE’s Port of Fujairah increased by 5.6% last week amounting to a total of 16.9 mn barrels, according to an S&P Global report. It’s the third consecutive weekly increase and comes thanks to a 38% rise in inventories of so-called middle distillates such as jet fuel and diesel. Fuel oil exports to Saudi Arabia from Fujairah rose by almost five-fold in the second week of October.

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CIRCLE YOUR CALENDAR-

The Sharjah International Conference on AI & Linguistics will take place on 17-18 October at the American University of Sharjah.

The Lease Conference Dubai 2024 will take place on 13-14 November at the Jumeirah Creekside Hotel. The event will bring together key players in the leasing industry across the Middle East and Africa.

EFG Hermes will host its annual One on One Conference from 7 to 10 April 2025 in Dubai. The largest gathering of its kind in the MENA region, the conference connects hundreds of international corporate leaders with institutional investors and family offices from around the world.

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

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