Adnoc launches USD 80 bn low-carbon energy and chemicals investment firm

Adnoc launches USD 80 bn investment company: Abu Dhabi National Oil Company (Adnoc) launched XRG, an international investment company focused on lower-carbon energy and chemicals, with an investment value over USD 80 bn, according to a press release. The company plans to double its asset value over the next decade, and will hold a global strategy day sometime next year.

XRG is set to begin operations in 1Q 2025 and will focus on developing three core platforms:

• The chemicals platform aims to position XRG among the top five global chemicals producers, targeting a 70% increase in global demand for chemical and specialty products by 2050;
• The international gas platform will develop an integrated gas portfolio, anticipating a 15% increase in global natural gas demand over the next decade and a 65% increase in liquefied natural gas demand by 2050;
• The low carbon energies platform will invest in solutions for low-carbon energies and decarbonization technologies, backed by forecasts for the low-carbon ammonia market to reach between 70-90 mn tonnes per annum by 2040, up from near-zero levels currently.

REMEMBER- Adnoc has been expanding its chemicals and low-carbon energy business in recent months: The state-run oil giant finalized its USD 3.62 bn acquisition of OCI Global's 50%+1 stake in the chemical producer Fertiglobe last month. It also made a public takeover offer earlier in October to acquire German chemicals company Covestro for EUR 14.7 bn, which is expected to close soon. The company is also looking to merge its plastics unit Borouge with Austria-based integrated oil and gas company OMV’s Borealis, but the transaction is facing delays.

IN OTHER ADNOC NEWS-

Adnoc’s board approved the company’s target to inject AED 200 bn (USD 54.5 bn) into the UAE economy over the next five years under the national in-country value (ICV) program, according to a statement. The ICV program rewards companies that prioritize localizing supply chains and attracting foreign investments.

How it’s going: The program has funnelled AED 55 bn into the economy so far this year, and created 5.5k Emirati jobs in the private sector through a partnership with the Emirati Talent Competitiveness Council. It has reinvested a total of AED 242 bn and employed 17k Emiratis in the private sector since the program’s launch in 2018.

Adnoc also inked AED 72 bn worth of industrial manufacturing agreements with local firms since 2022, aiming for AED 90 bn by 2030 under the UAE's Make it in the Emirates initiative.

Delivery Hero’s Middle East unit Talabat increased the size of its offering to 20% of its share capital amid significant investor demand, up from 15% previously, after receiving approval from the Securities and Commodities Authority, according to a press release (pdf). The share price range remains unchanged at AED 1.5-1.6 per share, with the additional shares allocated to institutional investors.

The move sets the company up to raise between USD 1.9-2 bn (up to AED 7.5 bn) from over c.4.7 bn shares, making it the largest IPO this year, trumping Lulu Retail’s IPO, which raised AED 6.3 bn. The upsized offering brings Talabat’s market capitalization up to between USD 9.5 bn-10.1 bn.

The increase in size was driven by strong demand from institutional investors, including sizable anchor investments from “global long-only and technology sector investors,” some of whom are investing in the DFM for the first time. Talabat’s orderbook was fully covered "minutes after the books opened" on 19 November.

The timeline: The subscription period for professional investors will wrap today, with the final price set to be disclosed tomorrow. The company’s shares are expected to start trading on 10 December.

REMEMBER- Cornerstone investors including UAE Strategic Investment Fund, Abu Dhabi Pension Fund, and Emirates International Investment Co, committed around USD 250 mn in shares.

ADVISORS- Delivery Hero appointed Emirates NBD Capital, Morgan Stanley, and JP Morgan as joint coordinators and bookrunners, with Abu Dhabi Commercial Bank (ADCB), Barclays, EFG Hermes UAE, First Abu Dhabi Bank (FAB), Goldman Sachs, ING, and UniCredit also acting as joint bookrunners. Emirates NBD is the lead receiving bank, with ADCB, Abu Dhabi Islamic Bank, Al Maryah Community Bank, Wio, Emirates Islamic Bank, FAB, and our friends at Mashreq are also acting as receiving banks.

JLL is the latest to report resilience in the UAE’s real estate market in 3Q 2024, with strong activity across all sectors, according to a press release referencing JLL’s latest UAE Market Dynamics report. Investor confidence in Dubai and Abu Dhabi remained steady, driven by government policies and demand for high-quality developments.

RESIDENTIAL-

Off-plan sales drive Dubai's residential market: Off-plan property sales in Dubai rose by 50.3% y-o-y, contributing to a 35.6% increase in total residential transactions y-o-y, mostly due to limited secondary offerings. Apartment rents climbed 19.1%, while villa rents increased by 12.5%, reflecting high demand in well-serviced areas and pushing more tenants to renew existing contracts instead of finding new places.

Rents are expected to moderate slightly due to the increase of contract renewals and increased supply, the report said.

In Abu Dhabi, secondary market sales grew by 44.3%, but off-plan sales fell sharply by 67.2%, resulting in a 40.8% decline in overall transactions. Rents in Abu Dhabi also rose, with apartment rents up 9.3% and villa rents up 3.9%. Prime properties in both cities continued to attract buyers, sustaining upward price trends.

HOSPITALITY-

Tourism supports hospitality growth: Abu Dhabi's hospitality sector saw a 23.6% YTD increase in revenue per available room (RevPAR), fueled by rising tourism and government support. Meanwhile, Dubai's hospitality market experienced a 2.7% increase in RevPAR, supported by steady tourism, and existing hotels adjusting rates to stay competitive.

COMMERCIAL-

Demand drives up office space rents: Limited availability of Grade A office space pushed rents up in both emirates. In Abu Dhabi, vacancy rates dropped to 4.1%, contributing to a 10.8% y-o-y increase in average rents. Dubai’s vacancy rate fell to 5.2%, with prime rents rising 14.7% y-o-y. Occupiers faced tight conditions, with many renewing leases as expansion options became scarce.

RETAIL + INDUSTRIAL-

Retail expansion: Dubai's retail sector thrived, with a 14.9% y-o-y rent increase for super-regional malls. In Abu Dhabi, community malls led rental growth at 9% y-o-y.

Industrial market: Dubai's industrial and logistics market posted strong performance in 3Q, with rental registrations up 7.9% y-o-y and rents rising 12.9% YTD through September. Abu Dhabi also saw healthy demand, especially for premium assets in key areas like Kezad, which boasts a 92% occupancy rate. Rental registrations in the emirate rose 32.9%, while warehouse rents increased 8.6% y-o-y.

Our friends at Mashreq, along with Emirates NBD, have made a strategic investment in fintech — and owner of EMEA-focused loan syndication platform LoanBook — NewBridge Fintech, according to a press release. The size of the investment was not disclosed, but the funds will be used to grow the platform and increase access to market participants, the statement said.

Mashreq is making the investment through its fintech-focused venture studio, NeoVentures. The venture studio will invest in “disruptive fintechs, [incubate] new ventures, and [co-create] tailored digital and AI-driven solutions.” The investment in NewBridge will see Mashreq “co-create and commercialize solutions across the EMEA markets to bring modernization to the syndicated loans market,” Global Head of Investment Banking Chiradeep Deb said.

Meanwhile, Emirates NBD aims to capitalize on this transaction to “accelerate the loan syndication process” and drive “technological advancements that enhance both our operations and the global loan market,” Head of Strategy Neeraj Makin said. This transaction will be Emirates NBD's first investment in a fintech based outside of the UAE.

What does NewBridge do? The startup, which aims to automate the loan syndication and private credit space, is based in the UK and Dubai, and offers a loan trading platform to find and identify loan prospects and execute the transaction. The platform was used “successfully” to execute a multi-bn primary syndication for a large GRE, the statement said.

Eyewa secures more funding from General Atlantic: Dubai and Riyadh-based eyewear retailer Eyewa raised USD 100 mn in a Series C funding round led by US private equity firm General Atlantic, increasing its total funding to USD 130 mn, according to a post on LinkedIn. Last May The round also saw participation from Badwa Capital and Singapore-based Turmeric Capital.

REMEMBER- Eyewa secured an undisclosed investment from General Atlantic in May. It is unclear whether the earlier funding was part of the Series C funding round.

Next up: Qatar + a bigger push in KSA. Eyewa plans to continue its expansion with the goal of opening at least 100 additional stores across six countries by 2025, including entering Qatar for the first time, TechCrunch reports. The company is also set to establish a production facility and fulfillment center in Riyadh.

About Eyewa: Founded in 2017 by Mehdi Oudghiri (LinkedIn) and Anass Boumediene (LinkedIn), the startup is the largest online eyewear retailer in the region, offering products from both its in-house brands and international fashion brands. Eyewa has expanded into the retail sector with 150 stores, including 100 in Saudi Arabia, where it is the biggest eyewear retailer by store count. The company is profitable and is growing its revenues at a 50% rate y-o-y, the founders say.

AGRICULTURE-

Silal inks agreement with Kezad Group for agtech initiatives in Al Ain: Abu Dhabi-based agrifood and technology company Silal has signed a Musataha agreement with Kezad Group to launch two agtech initiatives in Al Ain Industrial City, aimed at sustainable farming and local food production, Wam reports. The first initiative involves a 50k sqm indoor farming project focused on cultivating premium berries in collaboration with sustainable agri-climate tech company Iyris. The second uses advanced controlled-environment agriculture to cultivate high-value crops across 100k sqm, while minimizing water consumption.

REAL ESTATE-

#1- Deyaar Development launched Park Five, a AED 1.5 bn residential community project in Dubai Production City, according to a press release (pdf). Phase one of the project is scheduled to wrap up in the summer of 2027, featuring Elm and Ember towers which offer studios and one- to three-bedroom apartments.

ICYMI- The company’s first residential project in Abu Dhabi, Rivage, was completely sold out last week.

#2- UAE-based developer Avighna Group purchased Emaar Business Park’s building 3 on Sheikh Zayed Road for AED 233 mn from Oman’s Bank Muscat’s Izdihar Real Estate Fund, according to a press release. The property holds 150k sq ft of commercial and retail space and is fully tenanted.

E-COMMERCE-

Telr to adopt Samsung Pay: UAE-based online payment gateway Telr partnered with Samsung Gulf Electronics to integrate Samsung Pay into its platform in a bid to ramp up the use of mobile payment solutions in the UAE, according to a press release.

ACCOUNTING-

Audit firms Ahmad Alagbari Chartered Accountants and Firm Harbour Aegis formed an alliance to provide cost-effective financial and advisory services, including audit, assurance, corporate taxation, and VAT compliance, Gulf News reports. The partnership looks to address the growing demand for affordable, reliable solutions by targeting the mid-tier market in the UAE. The integration is slated for completion in 2Q 2025, after which revenues are expected to exceed USD 15 mn in 2025.

More to come: The firms plan to onboard additional firms specializing in asset valuation and counseling services and expand operations beyond the UAE, aiming to double or triple revenues within five years. The alliance’s workforce currently includes 150 staff members, with plans to expand it by 10-15%.

FMCG-

Bateel sets up shop in South Korea: Gourmet dates retailer Bateel opened its first store in Seoul, South Korea at Lotte World Mall, according to a press release. The new shop — larger than Bateel’s flagship stores in the UAE and KSA — is its first in Asia. Bateel now operates in over 29 countries across the GCC, Europe, and Asia.

More to come: Bateel plans to launch its Bateel El’an Concept — a modern café format offering dine-in, takeaway, and delivery — in South Korea in early 2025. The company is also eyeing entering new markets such as Singapore.

AUTOMOTIVE-

Chinese automotive brand Omoda & Jaecoo tapped Galadari as its first UAE distributor under a new partnership, according to a press release. The brand’s flagship Omoda C5 and Jaecoo J8 models are set to launch in the UAE in 2025, with showrooms and service centers in Sharjah, Ras Al Khaimah, and Fujairah.

DEFENSE-

UAE eyes Russian-Indian missiles: BrahMos Aerospace, a Russian-Indian firm, is in talks with the UAE, Vietnam, and Indonesia about supplying its BrahMos missiles, which target both land and naval sites, Azernews reports. Developed by Russia’s NPO Mashinostroeniya and India’s Defense Research and Development Organization, the supersonic cruise missiles, which can reach speeds up to Mach 3, are currently in service with the Indian military.

BUSINESS-

Bank of Communications Co. (BOCOM), China’s fifth largest bank, opened an office in Dubai International Financial Center (DIFC), in a bid to boost economic, trade, and investment cooperation between China and the the Middle East, Africa, and Southern Asia (MEASA) region, according to a DIFC statement. BOCOM joins over 230 banks at DIFC and is the fifth Chinese bank to establish a presence in the DIFC.

CULTURE-

Dubai is getting a Dubai Photography Museum, which is set to attract cultural institutions to set up presence at the museum, according to the Dubai Media Office.

All may not be as it seems on Wall Street, with investors increasingly looking to protective puts, volatility hedging, tail risk hedging, and other strategies to insure against the potential of market volatility and even market crashes, even as the Dow Jones, S&P 500, and Nasdaq all hit multiple all-time records in quick succession this month amid a post-election market rally.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

To say that US markets are bullish would be an understatement, with the S&P 500 up 3.7% since the election on 5 November, the Nasdaq is up 3.8% over the same period, and the Dow Jones is leading the pack up by 5.9%. Some big name and established companies have also seen their share prices rise more in just the last few weeks than many do over several years, with Axon Enterprise seeing its share price an impressive 44.0%, Tesla stocks up 37.1%, and Vistra Corp witnessing a 26.8% rise in the price of its stocks.

But some traders are preparing for the possibility that the good times could come to an abrupt end sooner than expected, as trackers that gauge the uptake of protection measures against market volatility picked up in the second half of this month. The Nations TailDex Index

— which measures the market’s expectations of a potential dramatic drop in equity prices — initially reacted well to Trump’s electoral victory, but is now noting a souring of the mood among investors, having picked up 28.2% since 14 November. It’s a similar story for the Cboe Skew Index — which measures the perception of tail risk in S&P 500 investment returns in the next 30 days — with the gauge picking up 19.7% since 12 November after a brief post-election respite and now sitting firmly in high-risk territory.

Caution, more than panic, is what is driving the buys, RBC Capital Markets’ Amy Wu Silverman told Reuters, as investors are more likely being cautious in the face of the likelihood of an uptick in US inflation and unpredictable trade disruptions from Trump’s proposed draconian tariffs — as opposed to a full-fledged market crash. “While investors broadly remain long equities, the tails are fatter … this is partly from a rise in geopolitical risk premium and certainly potential policy risk as Trump returns to the presidency and potentially enacts tariffs and other measures," she explained. Susquehanna’s Chris Murphy, agrees, explaining that “the general idea is there is an 80-95% chance of pretty low volatility … but there’s just more of a tail event being factored in.”

MARKETS THIS MORNING-

Asian markets are mixed in early trading this morning, with Japan’s Nikkei leading in the green at +0.5% and Korea’s Kospi at +0.3%, while China’s Shanghai index is edging into the red at -0.1% and Hong Kong’s Hang Seng is down -0.5%.

THE CLOSING BELL-

The DFM fell 0.5% yesterday on turnover of AED 650.6 mn. The index is up 18.4% YTD.

In the green: Dubai National Ins. & Reins. (+14.8%), National Cement Co. (+14.7%) and National General Ins. (+11.1%).

In the red: National International Holding (-8.7%), Gulf Navigation Holding (-8.0%) and Agility The Public Warehousing Co. (-4.6%).

Over on the ADX, the index fell 0.1% on turnover of AED 1.2 bn. Meanwhile, Nasdaq Dubai closed down 0.6%.

CORPORATE ACTIONS-

e& increased its borrowing cap temporarily to up to twice the consolidated net debt to EBITDA during the past 12 months, during a general assembly meeting, according to an ADX disclosure (pdf). The company will reduce the cap to 1.5x within 18 months. The cap applies to all interest-bearing liabilities, including, bank loans, facilities, and bonds or sukuk.

The telecom giant distributed AED 3.6 bn in dividends for 1H 2024 on 16 August.