tv Bloomberg Markets Middle East Bloomberg April 25, 2017 12:00am-1:01am EDT
time to fly in. it's 8:00 a.m. across the emirates, this is bloomberg markets: middle east." david: markets are doing well. on myt my function bloomberg. it is green just about across the board. a reminder that australia and new zealand are close. .hat being said sovereign bonds, yields are backing up. the move for them malaysian ringgit stronger by half a point percent. the ringgit malaysian currency is going back over six months. the other big story we are of data today, lots coming out when you talk about china pmi. do we get a second leg up when it comes to the ppi? that is a reflation story. we heard from the governor that had bad bones in the sector. all of been tracking
last week after the selling pressure we have seen since 2015. that has helped steady. things could change by the minute. yousef: some breaking lines hitting the bloomberg earnings are in the company reporting first quarter revenue of 2.2 6 billion francs. two point one billion swiss franc -- swiss francs and a key figure at 179 million swiss francs. we will get you up to speed later on in the program as we digest these numbers. meanwhile, just under two hours away from the opening of the emirates markets, that is dubai and abu dhabi. we saw the global euphoria and a lot of the markets. take a look at the gcc index. tells you thehat story right here. you could see a significant amount of pressure on your
energy stocks. saw a brit of a bright spot in consumer discretion. pressure after an unexpected loss. you are looking at dubai spot -- device docs being the worst -- dubai stocks been the worst performers. others that we are watching is the price of brent crude. not getting that much. up a half of 1%. the spread over treasury for gcc bond training just a little bit. south african rand still at 13.01. david: lots happening outside of markets and business. let's head over to deborah with the first word headlines. debra: details of president trump's tax plans are you merging.
the white house says he will call for lower individual tax comingith corporate tax down 15%. the final proposal is not expected until june. the tax release will come as the white house and congressional leaders work on a spending bill to -- to avoid a partial government shutdown. marine le pen is stepping aside as the leader of france's national party, saying she wants to be above partisanship in mays residential run off. it is being painted as a referendum on the eu and globalization. she is anti-euro and anti-immigrant. wantsel macron immigration. he has no clear policies but supporters say he will be good for europe. >> more europe is needed, not , but also totary assure european citizens for growth and jobs. something they have not been delivering well on. debra: the u.s. has imposed
sweeping sanctions on syria. treasury secretary steve mnuchin says the sanctions target 271 individuals connected to the government agency responsible for serious chemical weapon program. more than 80 civilians were killed when nerve gases were used for an attack. sendingnited states is a strong message with this action that we will not tolerate the use of chemical weapons by any actor and the intent to hold the assad regime accountable for its unacceptable behavior. qatar airways says it will finalize its 49% stake in the next few days. airline is also about to submit an application for a new carrier in india. he told bloomberg that passenger numbers to the u.s. are down half a percentage point since the trump administration's travel restrictions. that one not upset lands for san
francisco service for next year. would have not announced a new destination if i did not have the confidence that we would be able to carry enough passengers to make our route feasible. debra: global news 24 hours a day powered by more than 2600 and analyst and analyst in more than 120 countries. this is bloomberg. david: the turkish prime minister says that his country treating iteuropean like -- he told the executive country will not tolerate being talked down to any calls for the eu to be more honest about turkey's membership. the plans to provide financial support for over 3 million refugees in turkey, and a visa raise it -- visa waiver have been left in limbo.
there was supposed to be a support of 3 billion euros so far, the amount that has been sent is 790 million. it has been a year, where are the 3 billion euros? lastisas or implemented year. that is also gone. there is nothing to be seen. that is also not going to happen. to all of this, we see finger-pointing at turkey with ensure action's to do this, and not to do that, as if they are the teachers and turkey is their students. -- student. that kind of thing will not be accepted by this nation. these won't increase, but will reduce the interest to the eu in turkey. of course our nation thinks this
has been intentional. we cannot they they cannot -- they cannot say they don't want us, they are trying to distance us with the actions. we have not entered and are not in the position to execute. -- exit it. >> are you continuing to push for membership or are you changing your mind? what is your idea solution? we invite the european union to honor us on the membership. they shall determine their visit for future. will they continue to welcome turkey or not? this clearly.ut we shall see their decision and determine our own path. there are elections for some members of the eu, therefore it is very different. we will see if those different types of rhetoric will continue after the elections are not. -- elections or not.
it is clear what some members of the eu did before the referendum, therefore the eu should determine its future vision for itself before the things can proceed on a healthy path. it should put forth what type -- type of a path it wants to walk on. this nation needs to find out what goes on in their head. did these -- do they see europe as a union of religion, and they need to put it earnestly. if they have the idea that a non-christian company has no place in this union, otherwise there is no place for both sides. turkish prime minister, let's get you up to speed with what has going on in the turkish
asset classes i will put this up on a chart. markets on the back of this release rally, yes that is a record high. right there, very top, bottom panel. you can see this crossing into the seven-day territory. 72 is the indication that this is overbought. it is not just the equity frank, you are looking at gains in the turkish lira. if you look at the extent -- expanded mangers, you can see the turkish lira has been one of the top performers. note saying there is room for further appreciations in currencies like the turkish lira -- lira and that south african rand. is hitting airports, but other see if flickr of hope. interview exclusive , where hei finance
yousef: this is "bloomberg markets: middle east." david: i am david ingles here in hong kong. click check of the business headlines. highest level since 2008, the company reporting record profit in the first quarter. rose 13 in one and a quarter billion. that is compared with a year back. ambitiouselping the in areas such as telco next weekend. yousef: saudi aramco has chosen an adviser for its much-anticipated ipo. the ceo made the announcement at a shareholder meeting in hong kong. last month bloomberg was told
jpmorgan and morgan stanley were also working on placement for what is the world's oil company. looking for 5% and could raise as much as $100 billion. david: first quarter profit at 20%,habi's pink rose coming ahead of expectations for money set aside for bad debt, selling for a quarter of 1% for conservative lending. signs of recovering in this ua economy. bettert had reported earnings due to a wider economy turnaround. qatar's finance manager says they are performing to expectations. that is despite the drop we are seeing in global oil prices. told bloomberg that taking a long-term approach and teaming up with local partners help to keep the qatar's successful project in the u.s.. >> when we put the numbers in
2015, i think there was a discussion of it trillion dollar -- of a trillion dollar infrastructure. we like what we see in the u.s. and what we have an infrastructure. we will look forward in to doing more things. a do you think of it as typical portfolio manager, or do you think of it the same way foreign governments would two willed influence in a certain region? yousef: if you look at -- ali: if you look at what we do, it is truly commercial. we go where we think we will have value and where we will have profit. it goes with asset location, currencies. we like what we see. lastrform very well in the two years. the market has been very good for us. hopefully we can to desk can continue the same chatterjee in the u.s.. diversification?
the it is not about short-term strategy. our investments are very much long-term strategy. this is the way we would like to look at it in the u.s.. anyre not here to flip gains. we have seen the markets and we are very happy with it. we will continue investing here. >> when you are putting money to work for infrastructure with private lenders, how do you avoid reinventing the wheel? do you look at venture firms and look to partner with them as they go through those startups and joint ventures? our investors here is through partnerships. i just came from washington d c and they have the best investments there. when we started this, it was a very difficult project. nobody wanted it. it was one of the best projects
that we have had. we have a very good american partner. to see how we would like most of our investments in the u.s.. if we cannot find the right partner, this is right for us. reportingal times was that you are rotating in safer assets. can you confirm that? we adjusted our budget four months ago. if you look at where we stand we oil prices as a budget, are enjoying 50-52, this is average. we are comfortable with what we see in the oil prices. i think they have managed much lower oil prices. comfortable where we see the oil prices. a very minimumg deficit. but if oil prices remain in this range, we are close to what we wanted. the qatari was
finance minister. he was talking about oil prices. we are seeing that rebound slightly after falling more than 7% after the past sessions. next in the markets will be the weekly yet a reports which is expected for a further drop. more on this from abu dhabi. again, it feels as if we are stopped in the middle between opec in u.s. shale. who is winning? exactly right. it is a familiar story, but it is getting familiar now, particularly since we had a bunch of oil ministers who gathered in abu dhabi last week. mini meetingivate on wednesday and the outcome of that meeting seems to be that there is a consensus building that we will get another extension about opec production cut, at least according to what the saudi minister said on thursday. at the same time you have the market reaction.
oil was down significantly on thursday and friday. if you look at the cftc positioning data, you could see the hedge funds are coming back on their bullish positions in oil. that suggests that market is losing faith in opec. withall this -- yousef: all this talk of a eccentric, you look at russia and they cannot do that. pricess of how the oil are putting pressure on, let's talk about the producers. what is the latest there? interestingther development is we have another round of consolidation coming through on the sovereign golf fund. people bloomberg have been speaking to suggested that oman is trying to combined it state fun with the investment fund, that would create an entity worth about 25 billion in assets. no decision has been made, but this does come off the back of another sws merger in the region
here in abu dhabi. they combined to create an entity with one hundred 25 billion assets. quite big bear. of course that -- quite big there. the thinking is you combine cost and that helps you get through a lower oil prices. combining companies funds is quite an endeavor. the i pick merger is still merger is the ipic still ongoing. there is a huge complicated corporate structure involved here. lots of people that need to be moved back and forth. it really speaks to the -- the determination on some of the gulf economies to deal with lower oil prices. that is tracy alloway joining us joining us live out of abu dhabi. here is what is to come on the show. we will be looking ahead to thursday's ecb meeting, and
david: equities across the asia-pacific are extending their gain coming off of the french election first round. central banks are tying all of this. head of research for asia and joins us out of singapore. thank you for joining us on the program. especially what we saw for equities in europe overnight. it is something you don't normally see. i am wondering what your normal call was like and what you get in at these levels? certainly we have seen a huge rally in markets across europe and into asia.
atdon't get too carried away this stage, while the concern around the french election have subsided. i think we are coming gupta to the ecb meeting coming up this week. this one where markets could be getting a bit ahead of expecting the ecb to perhaps signal some paring back of the program at this point. in thethe only hurdle way, and this is based on a lot of people that we talked to, for an upgrade of european equity, if not already was the french election. now that the risk has mostly gone away, if you will. to asia,of threat where does that reallocation come from? are we seeing that come from asia in europe -- into europe? to asia, where does that reallocation comekhoon: i think that is stila lot of liquidity that is still out there in the system. we are starting to get to a
situation where, in terms of the u.s. federal reserve, they are starting to talk about shrinking the balance sheet. market something in a that has not been prepared for or focused on. if there is any hint that perhaps they might be thinking of the boj, then all of a sudden that could be a huge, major development for markets, which had been relying on the liquidity provider by the major central banks. they are starting to taper. they are not being some form of impact on financial markets. yousef: what we have been seeing, the sigh of relief in markets has been nothing sort of incredible. it is rare that we see days like this. i put this up on the chart. bullet up on your bloomberg. volatilityhanges in on an expanded major level. you could see all those red bars
there for the euro. the turkish lira, the market reading a clear sigh of relief. in terms of the volatility play, if someone wants to trade ball, what is the best strategy now? i think it will continue to subside in the near term. we have seen one of the big potential risks in europe clearly subsiding. i think we are probably going to see it edge down. we should not get too complacent . in the near-term a big we will see volatility retreat. there are also starting to come a biteriod where we see of recovery in the u.s. oil in the month of may, thanks to the month where the u.s. stages have brought recovery against emerging market currencies. that kind of seasonal password to play out.
given positional that is pretty one-sided. u.s. dollar, that might be triggered for a little bit of a pickup as a month of may progresses. get your would like to thoughts briefly on the lines we are getting in terms of donald trump's tax plans. white house officials suggesting a possible cut of 15%. what will that do to the u.s. economy, and how will that affect your strategy? what we have seen quite clearly is that, and he talks coming out from the trump administration has to be taken .ith a bit of salt what we need to see is concrete action. this is where you will get the more difficult in trying to get the numbers necessary to really pass any major piece of legislation. while any announcement around theoutlying -- outlining of
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you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. yousef: breaking earnings hitting the bloomberg from to importing companies on the do by index. with an early figure at first kurt -- first -- first quarter 206 5 million durham's. dirhams. total returns down 3.6% or we will have numbers up on capital. there has been a lot of transactions over the last 12 months. first quarter revenue coming in at 31.8 million durham's. dirhams. in the coming in at 28.4. those are some of the key numbers. fors cross over to debra
first word headlines. expectseutsche bank first-quarter profits to jump by an average of 46% from a year earlier. lenders are seeing benefiting president erdogan's administration. they are planning to boost spending. turkish prime minister told bloomberg they will be putting more money into infrastructure. we are going to accelerate infrastructure investment. bigey will make very investments in railways this year and the next. we will invest around 100 billion euros in railroads over the next decades. this means investing in turkey's desk turkey's future. nigeria will let the market exchange it's exchange rate. the central bank governor told
senior bankers that he would tolerate the weakening in the window, which started on monday. the contract jump to the highest since march. nigeria is struggling to revise its economy and faces a shortage of u.s. dollars. qatar's president may not issue any sovereign bonds with the budget nearing its balance. finance minister told bloomberg that oil above $45 a barrel have relieved pressure on the though's finances, even it has a $200 billion spending feet. fee. spending >> we are expecting a minimal deficit. we are very close to what we want. 24 hours aal news day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. let's have a look across
markets in the region. very short gains. david, a do love to be the bearer of good news. we are seeing sent to make continue across asian markets. china markets are recovering today. we had him on bloomberg radio saying you cannot read into that 1.4% drop that was in the chinese market, because it is a volatile market and has no rhyme or reason. we are seeing come back coming through on the cfi 300. you are seeing the japanese nikkei up for a fourth consecutive session of gains. the dollar is very much in focus ahead of the trump tax reform plan. korea is looking good, even though today is a worry in terms of political concerns and is the anniversary of the north korean army. of 1%.p 6/10 hong kong markets are looking good.
we have australian and new zealand closed today. just having a look at commodities, mostly well. if we pull that out i want to show you the current cfs market. it is an interesting wanted a. the fact that you do have the dollar in focus, but you are seeing the latest ringgit at a five-month high against the dollar. that is leading up to the big rally that you saw in em currencies across the last couple of sessions. malaysia missed out because it's market was closed. the korean won is looking good, but you see most currencies weaker against the dollar. kiwi is down for 10th of 1%. sawr that fell down that we in the market in yesterday's session. but have a look at some of the stocks we have been focusing on in the asian region. highkong hitting a record of 6%, up 77% year to date, versus a 9% gain in the hang seng index. backout soon rising on the
of caterpillar sales in the u.s.. itss a little weaker after quarterly profits. a look at full share. it is suspended now in hong kong but it fell 12% before that suspension. yousef: we have a busy day in terms of earnings. some numbers. their 2017 sales growth's are at a speed of 5%. first quarter in the line with plan 2017 growth in the first quarter revenue coming in at 1.9 6 billion euros. this is the company he remember that manufactures and sells plastic and glass lenses. 19 out of 25 analyst are in this. let's cross back to another story. egypt is making sweeping changes with financial sector as it looks to bring its economy in billion loan from the ims. we spoke to the country's
minister for finance. >> egypt is open for business. we are improving the business environment and making sure that more investment comes in from the u.s. and other countries. on investment loans. to remove all the bureaucracy and states, which we have concerns about over the past years. there has been concern about the rule of law and how it works in egypt for in investor coming in. what is the timetable on having those reforms in place? sahar: we are moving very fast. we are currently discussing the investment low it is re: finalized for the economic policy. the others on the pipeline. framework,ing at the
so it is not just the investment, it is also other things that affect our financial includes in -- inclusion. we are amending the capital --w, that would suggests allowing for new financial products to allow for more diversification. that is one challenge the private sector has faced. >> egypt has been given a $12 billion guarantee on a loan from the imf. two of the three have been released. you have an estimated timeout when the third will be released? sahar: we have been working very closely on the world bank on the budget control program that supports major economic reforms. before.ot happened it has been labeled by the executive board as the most ambitious.
have already released the first to based on a program that is homegrown. the program that has been prepared not just by the government, but has extensive concentration with people, stakeholders, private sector. -- the third is on the way. meetingterday i had the with the managing director and the vice president and we are almost there in finalizing the package. it focuses on mainly the business plan, government and transparency. we are one area that politically dedicated to accomplish. >> is it a matter of weeks or months for the third tranche? it will takely another four months to finalize, because we just released the second 12 months back. we are in the operational process in the bank paid --
bank. let's all widen out this conversation get additional context. we are joined by the founder and president, great to have you back on the program. we just heard from the minister of investor -- investment in egypt. some of the realities when it comes to foreign investment and equities. this is what it looks like. you can see that there is, in terms of net flows, easy inflows in egyptian equities. the one side of the recovery story, is the country doing enough to make its case to the global investment community, that this is a place that is stable and where you can find yield on your capital? >> the inflows of course follow .he egyptians everybody had anticipated a big depreciation. you have large outflows. you will now see the inflows coming in, accompanied by broad reform taxation.
we just heard about capital markets, investment flow. there is a broad reform agenda. it is also very encouraging to get a professional. is a professional, and it is good to have a woman in my opinion. what you are seeing is the egyptian economy responding to these measures. there is a cut off of subsidies. we at the beginning of the turning point. yousef: this recovery after the big devaluation may last year. the imf has weighed in and they have said, you might need to look at monetary policy tools to try to curb the inflation levels with the numbers reaching 13.9% year-over-year. is the central bank going to step in here?
nasser: there has been a buildup of reserves. theomes as a result of depreciation. there is a beginning of return of confidence. the other point i would make is apple the imf and the bank, as well as the country of the gulf sea egypt as a country that is too big to fail. they will support it and they will provide guarantee. the issue is that, will you have sufficient recovery to get the fiscal deficit down? has beent of inflation large. if you go to egypt today, you can feel that property in the streets. the question is, how fast will you get that recovery? criticalts will be from that point of view. passing the law is one thing, attracting the investments is a different story. the equity markets is a precursor. what you need is to create the
jobs. we still got to see the job formation. david: david here in hong kong. i just want to pick up on one of your points and i am glad yousef brought it up. these reforms, these things take times. change daily.an i am just wondering, with inflation at these levels right have tos the government worry about things likes toast -- social stability? it is the poorest people that get hit the most in times like this. nasser: the short answer is, yes. i think we have years in terms of social stability. our property levels have gone up and it is the poorest areas being affected. the danger here is that, we are in agenda, but not having a safety net put in place. we have these attempts at targeting subsidies, but we are still a long way from creating
the jobs for young egyptian youth. remember that egypt has a very, very young population. fast-growing. egyptian youth growing the labor force every year. you havepast few years not seen a lot of net drop formation. that is adding to the unemployment on the ground. the other big story has been the changes when it comes to fiscal reforms in saudi arabia. some amendments and some reversals, they are arguing they are seeing improvements. ncb capital coming out with a note saying, the idea of having money back and investing into a liquidity isdire very significant. they are estimating, 30 to 40 billion saudi realities is how restoration will cost. what is your read on this? i know you have been a close observer of the saudi story. it is very clear that it
was put in place. the saudi economy just tanked. if you look at the forecast of imf's and others, that is half a percent growth. you have oil prices, we are talking about $52 per barrel or that has replenished some of the government profits. there is wide concerned that the and tries to compensate. the timing is interesting. it is really intended to deal with social unrest potentially. whatwill this -- yousef: will this do with the country's credit rating profile and trying to put through reforms in times of crisis? that you have to deal with the short-term to do with the long-term. you have been a champion and have always argued for it. even as light as it may be, how
big of a step backwards is it? nasser: i don't think we should read too much into it. i think the main point we need to focus on is the aramco ipo. what we are focusing on is trying to maintain a high enough valuationof that the of aramco remains in the range of one trillion to $1.4 trillion. if you look up a little bit on the budget at the moment, but you get some growth, and you focus on the ipo, i think that is the main focus of policy at the moment. 1.4 trillion, that is your policy whether you turn out to be right. nasser: that is what the government is hoping for. yousef: what is your call? nasser: it would be in the lower ranges. yousef: founder and president. airlines says the
yousef: you are watching bloomberg. david: i am david ingles here in hong kong. let's get a check of the latest aviation stories. he rejected a restructuring plan. the airline is 49% owned. they have projected measures including salaries and job cuts. italy's economic developer said that in the event of a no vote, the government could act as a special administrator for about six months for liquidation. hoping qatar airways is to take advantage of money talia'ss flights -- ali flights.
qatar has been negotiating with the privately owned airlines for over a year. we see there is a huge potential. italy does not have a national carrier. is a nationala carrier, but it is struggling. i know it is the right time for us to invest. david: turkish airlines have called for the trump administration -- coming into the u.s.. international passengers fell almost 12%. he told us he remains optimistic. all of the demands and passenger increase has been started. we finish 2017
within increase in passengers. 2017, very optimistic for now the turkish airlines start to pick up again. yousef: do by air space enterprise, the middle east biggest plane has agreed to buy its rival a w a s. the multibillion-dollar deal repels ye into the top rank of aircraft leasing segment. joins us live with the details. is this deal a sign that the by is feeling more confident? absolutely, to buy has spent times fixing its own books following its own deck prices. that companystate says they are confident about participating. -- why deal of valuation task while the's
deal is valuation -- paid 5.6 and 7 billion euro, we know that withrice was paid by dae significantly above that. david: i guess the bigger picture is, when you talk about the leading sector, i guess this is where china gets involved, is this part of the consolidation we are seeing within that space? definitely, it extends the wave of consolidation in the sector that we saw last year. last year we saw them agreed to buy cit. for $10 aviation billion. it is an add-on to expand its own holdings. behind aha andds market leaders and general electric, it still joins the next year along japan's aviation capital. and i cbc financial leasing.
yousef: some teachers we are watching for you, let's take a closer look at emirates telecommunication, they are expected to report the company's first-quarter markets today. 6%, to buys to a hold seven sales of the ratings. dor in mind, competitors report earnings early on in the program. 24% drop in first-quarter profit. the number is a miss.
74 million, two hundred 65 is actually what materialized. the stock has taken a beating since the start of the year. down nearly 28% of the worth. concerns about domestic demand. production analyst expect to continueuction on that sector. there is optimism from analyst with a price target of 69.8 saudi riel's. the share keeping out for saudi's qatar. down by nearly 12% so far this year, the average sale rating is what it stands with the analyst. him on over to hospitality group, they have unveiled six new products and international expansion plans. the ceo says the project asked portfolios of upcoming projects. hotels for profit
owners is one of our key developments going forward. ,e look at such projects globally. we have identified 58 the markets we are looking at. mostly in the gcc, but also in india and in china. and key places in europe. toolis a key development for us. in addition to the hotels that we are continuing to build. this is ongoing also. david: it is time to go over to london and see what is coming up in europe after that session we saw there in monday. anna is standing by for us there. anna: the twist and turns of the french political story keeping markets and investors on their tolls. -- toes. there is a bit of a global rally over the last line for hours. now marine le pen has stepped
down as the head of the front national how, the party that was founded by her father. round ofnto the second the vote that takes place on may the seventh. it is not clear if this is a temporary or permanent move as we head towards may the seventh. who created his fiscal movement and marine le pen who is part of the fiscal party. yousef: politics is one side of the story, what about transatlantic m&a? earning reports coming up your we are keeping an eye on those and an eye on m&a, which is the biggest health care provider. transatlantic, one of them is a transatlantic deal. we see some momentum there at $3.3 million -- $4.3 billion. tpp industriesn
anna: macron rally. global markets soar after the centrist candidate is seen as the favorite in next month's french presidential runoff. meanwhile, le pen steps down as leader of the national front party in an effort to expand support. president trump wants to/personal income tax -- wants to slash personal income tax. an outline of the overhauls. anna: and we are officially in european earnings season. the latest figures from novartis to ericsson, and ppg sweetens an offer.