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The Gulf Cooperation Council is on track to see its debt capital market exceed $1 trillion in outstanding issuances by the end of 2025, driven by government initiatives aimed at market development, economic diversification, and the need to fund fiscal deficits and upcoming debt maturities. Fitch Ratings reports that the DCM in the GCC reached $940 billion by the close of the first quarter of 2024, marking a 7% year-on-year increase.

Saudi Arabia and the United Arab Emirates lead the region’s DCM, holding 43% and 30% of the market share, respectively. Approximately 40% of the GCC’s outstanding debt comprises sukuk, with the remainder in conventional bonds. Fitch Ratings, which assesses over 70% of the GCC’s US dollar-denominated sukuk, notes that 81% of these are investment-grade, with no defaults reported.

The anticipated growth in debt issuances is attributed to several factors, including projected declines in oil prices to $65–$70 per barrel in 2025 and 2026, which may prompt increased sovereign borrowing to cover budgetary shortfalls. Additionally, government-led initiatives to enhance debt capital markets and diversify funding sources are expected to play a significant role. Bashar Al Natoor, Global Head of Islamic Finance at Fitch Ratings, emphasizes that “most GCC countries have come a long way in developing their DCMs, with the bloc now accounting for almost a third of total emerging-market dollar issuance, excluding China.”

Despite these advancements, the GCC’s debt capital markets remain less mature compared to more developed regions and exhibit varying stages of development across member states. Saudi Arabia and the UAE possess the most advanced markets, while Qatar and Oman have seen contractions due to debt repayments. Kuwait’s absence of a debt law limits its funding options, and Bahrain continues to rely heavily on DCM access and support from other GCC nations amid persistent deficits.

In the banking sector, GCC banks are projected to issue over $30 billion in US dollar-denominated debt in 2025, a decrease from the record $42 billion issued in 2024. This decline is partly due to the maturation of approximately $23 billion in existing debt, with Qatari banks accounting for about a third of these maturities, and UAE and Saudi banks each representing around a quarter. Fitch Ratings anticipates that most additional Tier 1 instruments with first call dates in 2025 and 2026 will be called, given favorable financing conditions.

The US Federal Reserve is expected to reduce interest rates by 100 basis points in 2025, potentially leading to more favorable financing conditions for GCC banks. Strong credit growth, particularly in Saudi Arabia and the UAE, is also anticipated to support further issuances. In 2024, GCC banks’ US dollar debt issuance reached an unprecedented level, driven by high credit growth in Saudi Arabia, efforts to diversify funding bases, and substantial debt maturities.

Dubai Electricity and Water Authority has announced a significant change in its water consumption measurement, transitioning from the imperial gallon to the cubic metre starting with the March 2025 billing cycle. This move aligns with Cabinet Resolution No. of 2023 and Ministerial Resolution No. of 2024, issued by the Ministry of Industry and Advanced Technology, which mandate the discontinuation of the imperial gallon unit in water meters across the UAE.

Saeed Mohammed Al Tayer, MD & CEO of DEWA, emphasized the importance of this transition, stating that adopting the cubic metre as a uniform and globally recognized measurement unit is a significant step towards enhancing alignment with international best practices. He noted that this change would facilitate benchmarking across sectors and support DEWA’s efforts to provide world-class services, ultimately benefiting customers and stakeholders.

To ensure a smooth transition, DEWA has confirmed that the current smart meters installed for customers are already compatible with the cubic metre measurement system, eliminating the need for any changes to customers’ meters. During the preparatory phase, DEWA will include both units in water bills and on the customer dashboard. The final adoption of the new unit will take effect with the March 2025 billing cycle. Customers will be informed of the change through official communication channels.

This initiative reflects DEWA’s commitment to adhering to local and international regulations to ensure services meet the highest standards of quality, efficiency, reliability, and availability. By aligning with international best practices, DEWA aims to enhance its leadership in innovation and sustainability.

The adoption of the cubic metre as the standard unit for measuring water consumption is expected to provide customers with a clearer understanding of their water usage, promoting more efficient consumption patterns. This change also aligns DEWA with other utilities in the UAE, fostering a unified approach to resource management across the nation.

In the lead-up to the March 2025 implementation, DEWA plans to engage in extensive customer outreach to ensure that all users are well-informed about the upcoming changes. This will include detailed explanations of the new billing units and guidance on interpreting water consumption data in cubic metres.

The shift from the imperial gallon to the cubic metre is part of a broader strategy to modernize utility services in Dubai. By standardizing measurement units, DEWA aims to improve transparency in billing and enhance customer satisfaction.

Abu Dhabi National Oil Company and Austria’s OMV have confirmed ongoing negotiations to establish a new global leader in the polyolefins sector. The merger, which would combine ADNOC’s Borouge, OMV’s Borealis, and Canada’s Nova Chemicals, is poised to create one of the world’s largest polyolefin groups. The two companies described the discussions as progressing in a “constructive and positive manner.”

Both ADNOC and OMV have been increasing their focus on expanding their footprint in the chemicals and petrochemicals sectors, particularly in polyolefins, which are critical for manufacturing a wide range of products, from packaging materials to automotive components. The merger would not only boost the companies’ market positions but also position the new entity as a major player in the global chemicals market.

The polyolefins industry has seen steady growth in recent years, driven by demand for packaging, consumer goods, and industrial applications. The merger, if completed, would give the combined entity a significant advantage in this competitive market, leveraging the resources and technological expertise of each participant. Experts suggest that the combined scale and enhanced capabilities could make the group a leader in producing polyethylene and polypropylene, two of the most widely used plastics globally.

ADNOC’s Borouge, based in the UAE, has been a key player in the polyolefins market for years, with a focus on high-quality, innovative products. Meanwhile, Borealis, controlled by OMV, is a leading European chemicals company with an established presence in polyolefins and advanced chemicals. Nova Chemicals, a wholly owned subsidiary of Canada’s Mubadala Investment Company, brings further expertise and production capacity to the table.

The merger would allow the three companies to capitalize on each other’s strengths. Borouge, for instance, has extensive experience in the Middle East and Asia, while Borealis has a strong European and North American footprint. Nova Chemicals’ established position in North America would be complemented by the global reach of the other two. Together, the companies would form a formidable force in both developed and emerging markets, ensuring a diversified supply chain and the ability to serve a broader range of industries.

This deal comes at a time when the polyolefins market is facing new challenges and opportunities. As the global demand for sustainable materials rises, the new entity may also benefit from growing interest in recyclable and eco-friendly plastic alternatives. Industry analysts speculate that the merger could help the group meet these demands by accelerating research into more sustainable production methods and product offerings.

The proposed combination would also be a notable shift in ADNOC’s strategy. Historically, the company has been heavily involved in the exploration and production of oil and gas. However, the increasing focus on petrochemical expansion aligns with broader regional goals to diversify the economy and reduce dependence on crude oil exports. By increasing its stake in high-value industries like polyolefins, ADNOC could secure more stable revenue streams in the coming years, particularly as global demand for petrochemicals continues to rise.

For OMV, the deal represents a significant opportunity to consolidate its position in the chemicals sector, aligning with its long-term strategy of enhancing its refining and petrochemical operations. The company has been expanding its portfolio in this space and aims to increase the contribution of chemicals to its overall business, helping to buffer against the volatility of oil and gas prices.

The announcement of the merger talks has raised questions about the potential regulatory hurdles the companies may face, particularly in Europe, where anti-trust laws are stringent. The deal would need to be assessed by competition regulators to ensure that the merger does not significantly reduce competition in the polyolefins market. Both ADNOC and OMV have stated that they are committed to ensuring compliance with all regulatory requirements.

Despite these challenges, analysts remain optimistic about the potential benefits of the deal. A merger of this scale would enable the combined company to drive innovation, improve efficiency, and leverage economies of scale. The global polyolefins market, valued at tens of billions of dollars, could see a new dominant player emerge, with the capacity to set trends and dictate pricing across key regions.

In addition to the market implications, the merger could reshape the supply chain dynamics for polyolefins. By merging production capacities and expanding global reach, the new group would be better positioned to serve large multinational customers who rely on polyolefins for various applications. This could include sectors like automotive, packaging, and construction, all of which are seeing shifts toward higher performance and more sustainable materials.

MANTRA, a blockchain platform for tokenizing real-world assets , has finalized a significant $1 billion agreement with DAMAC Group, a leading investment conglomerate in the UAE. This strategic partnership, announced on January 9, focuses on the tokenization of various assets within the Middle East region, bringing blockchain innovation into a thriving market.

The agreement underscores MANTRA’s commitment to expanding the use of decentralized finance solutions for asset management, leveraging blockchain’s potential to revolutionize traditional industries. DAMAC, known for its prominent presence in the real estate sector, will collaborate with MANTRA to tokenize a range of physical and financial assets, making them accessible through the blockchain.

DAMAC Group, founded by billionaire Hussain Sajwani in the early 2000s, has diversified its investments into several sectors, including real estate, hospitality, and entertainment. The company’s high-profile developments include luxury residential towers and resorts, which have shaped Dubai’s skyline. With a reputation for delivering upscale properties, DAMAC has long been recognized as one of the most influential developers in the region. By embracing blockchain technology, the firm seeks to modernize asset management and broaden the scope of its investment strategies.

MANTRA, on the other hand, has been gaining traction in the blockchain space for its unique approach to tokenizing real-world assets, including properties, commodities, and financial instruments. The platform’s capabilities allow users to invest in traditional assets using blockchain technology, enhancing liquidity and enabling fractional ownership. This process democratizes access to high-value assets, which was previously out of reach for smaller investors.

The partnership’s centerpiece is the tokenization of real estate assets, one of the most significant areas of focus. By converting physical properties into digital tokens, MANTRA and DAMAC aim to make real estate investment more inclusive and accessible. Investors can now trade or hold fractional ownership of properties without the traditional barriers of entry, such as the need for large capital investments or navigating complex ownership structures.

For DAMAC Group, this partnership represents an opportunity to broaden its investor base, reaching not only institutional investors but also individuals seeking exposure to high-end real estate. The ability to tokenize properties provides greater flexibility in managing assets and allows for more efficient transactions, as blockchain technology ensures transparency and reduces the need for intermediaries.

On a broader scale, the partnership aligns with global trends in digital finance, where the tokenization of real-world assets is seen as the next frontier for blockchain technology. While still a relatively new concept, the market for tokenized assets is rapidly growing, driven by increasing demand for alternative investment opportunities and the potential for blockchain to streamline asset trading.

The collaboration is also expected to have a broader economic impact in the UAE. The country has positioned itself as a global hub for technology and innovation, with several initiatives promoting the adoption of blockchain and other emerging technologies. This agreement between MANTRA and DAMAC highlights the UAE’s continued efforts to integrate cutting-edge technologies into traditional industries such as real estate.

Tokenization has the potential to address several challenges in the real estate sector, including illiquidity, high transaction costs, and the complexity of cross-border investments. Blockchain’s decentralized nature provides enhanced security and reduces the risks typically associated with traditional financial systems. Through tokenization, investors can gain access to a much broader array of real estate opportunities, including properties that were once considered inaccessible due to geographic or financial constraints.

The agreement between MANTRA and DAMAC could pave the way for future collaborations with other players in the real estate and investment sectors, both in the UAE and beyond. With the rise of digital assets, there is an increasing need for traditional businesses to adapt to the changing landscape of finance. Blockchain and tokenization offer a solution that meets this need, providing greater transparency, security, and efficiency in asset transactions.

The tokenization of RWAs is not just limited to real estate. Other sectors, including commodities, art, and even intellectual property, are beginning to explore how blockchain can enhance their operations. This trend is expected to accelerate in the coming years, as more businesses realize the potential benefits of tokenizing their assets. In this context, the MANTRA-DAMAC partnership could serve as a model for other companies looking to tap into the growing market for blockchain-based asset management.

As the global economy continues to evolve, so too does the role of blockchain in reshaping traditional industries. The MANTRA-DAMAC collaboration is a clear example of how blockchain technology can be leveraged to unlock new opportunities, reduce friction in asset transactions, and foster a more inclusive financial ecosystem. The success of this partnership will likely have far-reaching implications for the future of asset tokenization, setting the stage for further innovation in the years ahead.

Aldar Properties, a prominent real estate developer based in the UAE, is set to enter the international bond market with its debut offering of hybrid notes, aiming to raise significant capital through a benchmark USD-denominated issuance. This marks a strategic move as the company seeks to diversify its financing options, reflecting growing confidence in the Middle Eastern property sector despite global economic fluctuations.

The move is seen as a key step in Aldar’s long-term financing strategy, which includes bolstering its liquidity and securing funds to support its extensive pipeline of real estate developments across the UAE. The planned issuance of hybrid bonds will likely appeal to institutional investors seeking higher returns, as these notes are designed to offer a more attractive yield compared to traditional debt instruments.

According to industry experts, hybrid notes offer the flexibility of both equity and debt instruments. These securities typically carry characteristics of bonds but can be converted into equity at the issuer’s discretion. In Aldar’s case, the hybrid notes will be structured to provide flexibility while enhancing the company’s capital base. This initiative is aligned with Aldar’s goal of optimizing its balance sheet while maintaining a competitive edge in the rapidly evolving real estate market.

The hybrid bonds will be issued under Aldar’s recently updated USD 2 billion Global Medium-Term Note (GMTN) program, which was approved earlier this year. The company intends to use the funds raised through this issuance to support its growth initiatives, which include several high-profile residential and commercial projects within Abu Dhabi and across the UAE. These developments are expected to contribute to the company’s steady revenue stream and help it capture a larger share of the region’s expanding real estate market.

Aldar’s decision to tap into the hybrid bond market comes at a time when investors have shown increased interest in hybrid instruments due to their unique risk-return profile. With these notes, Aldar is looking to capitalize on favorable market conditions while maintaining its financial flexibility, as hybrid securities are less sensitive to interest rate fluctuations compared to traditional debt.

The UAE’s thriving real estate sector has demonstrated resilience, despite global challenges such as inflationary pressures and geopolitical tensions. Aldar’s strong performance in recent years, along with its reputation for high-quality developments, positions the company well to attract investor interest in its hybrid bond offering. Analysts predict that the offering could provide Aldar with a competitive advantage, allowing the company to continue its expansion plans while managing financial risk more effectively.

Aldar’s hybrid notes will appeal to both global and regional investors, with its strategic location and robust development pipeline making it an attractive investment opportunity. The company’s portfolio includes high-profile projects like the Yas Bay waterfront development, which features residential, commercial, and entertainment spaces. These iconic projects are poised to enhance the company’s brand recognition and drive future demand for its properties, ultimately increasing the potential for returns on hybrid bond investments.

Investor interest in the UAE’s real estate market remains strong, particularly in Abu Dhabi, where Aldar holds a dominant position. The UAE’s government initiatives, including plans to diversify the economy and improve infrastructure, have further contributed to the positive outlook for the sector. These factors, combined with Aldar’s track record of successful developments, are expected to bolster investor confidence in the company’s bond issuance.

The company’s strategy of diversifying its capital structure by incorporating hybrid securities is not only about raising funds but also about ensuring sustainable growth in a competitive market. By issuing hybrid bonds, Aldar is able to strengthen its capital position without overly diluting equity or taking on excessive debt. This approach ensures the company can maintain a healthy balance sheet while executing its ambitious growth plans.

Aldar’s hybrid notes offering is part of a larger trend within the Middle Eastern real estate market, where companies are increasingly turning to innovative financing structures to meet their funding needs. As other regional developers explore similar hybrid instruments, Aldar’s move could set a precedent for future debt issuances in the sector. It also reflects the growing maturity of the Middle East’s bond market, which is attracting increasing attention from international investors.

Market experts believe the debut hybrid notes from Aldar will be a bellwether for other companies in the region. Should the offering meet with strong demand, it could encourage further issuances from both established developers and newer market entrants. This would signal an increasing acceptance of hybrid securities as a viable alternative to traditional financing methods, which may have been less attractive due to rising interest rates and market volatility.