Transcripts For BLOOMBERG Bloomberg Markets Middle East 20171218

Exchange, but regulation of their trip to currency is demanded. This is Bloomberg Markets middle east. I am yousef gamal eldin in dubai. Coming up, we speak to Scott Morrison after the government in australia forecast a never arrower budget deficit. Some headlines out of india, the index down 1 . The indian rupee down. 1 . That would be risk for the reforms the Prime Minister wants. The rest of the picture is largely positive. The handoff from the u. S. At record highs. Midweek boats and the house and ate and plans for folks senate. The new Zealand Dollar is firmer. The metals space, take a look at that, copper leading gains. Other key asset classes, brent crude looking to updates on a pipeline. Not the extent so much, but a possible restart date. Watch out for that. Downdownside pressure,. 1 , 60 doing a historical volatility the low since 2001. A big week in emerging markets with dollar rand on the downside there. Key here is the votes of the ruling party, the leadership votes scheduled for monday. I tried to stay up for that, but it was too late in the night for that. Lets check in on first word headlines from around the world. Russian president Vladimir Putin has called the white house for the second time in four days , this time to thank the cia for a tipoff that led to the breakup of a suspected militant cell. That information help to target a group that was planning explosions across st. Petersburg. The Russian Security services seven people have been arrested, all claiming to be followers of islamic state. South africas Ruling National Congress has started voting for a new leader to replace president jacob zuma. It is a tight race between his former wife and deputy. As vote in johannesburg fall a over the decision to exclude delicates who the party ruled were not properly accredited. The rand hit a high ahead of the vote. Has swept toera victory in chiles election. Economic to double growth and create 600,000 jobs and easy industry regulations and never of the budget deficit. His probusiness agenda help to push the stock index to a record before the first round of voting. Secretary Boris Johnson has stepped back into the brexit debate, telling the sunday times that he wants a deal that would give the u. K. Government the power to reject eu laws and said failure to do so would render the country a facile state. On the other side of the channel, the chief eu negotiator confirmed brussels has no intention of offering the u. K. A more favorable deal than it currently has with the block. Wars film metr the High Expectations set by movie fans and analysts with an Opening Weekend of 220 million in the u. S. And canada. That puts it squarely ahead of last years spinoff movie rogue one, which took in 158 million in the Opening Weekend. Overseas, reaching 230 million around the world. It opens in china next month. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Yousef thanks. Lets talk about asian equity markets. All three Major Industries search to records at the end of last week. Frenzy ofound a optimism that tax cuts will go through as President Trump says the economy will rock when the tax code is finished and has gone as far as suggesting growth could hit 6 . Closing in on his first major policy victory, but one expert says the stock market highs may have little to do with President Trump. A Senior Investment strategist at Goldman Sachs says the election pattern always sees stock markets pulling back ahead of the vote only to see them rise following the vote. Lets see if our guests thinks the same way. He is with the Canadian Imperial Bank. These tax cuts that are about to be passed, how much of a meaningful impact will they have on the u. S. Economy and u. S. Assets . I think we have seen these. 2 ,. 3 ofore, gdp, which is not insignificant, but there are a lot of good things going on in the u. S. Economy and Global Economy in this market has momentum regardless of these cuts. This additional perspective for our clients come at we put together a lovely chart here,s chart 6793. It tells the story here, chart 6793. The last two years are little bit down. Some investors are thinking that tax cuts could reinvigorate the stock buybacks and reinvigorate a fresh rally, can you subscribe to that view . I am not sure they will reinvigorate the rally from here. We have some lofty and rich levels. We are seeing that over some time. I think the crux of the matter ande have had ample cash still have a accommodative Monetary Policy in the u. S. And globally. They have not been short of cash to invest for buyback shares and we have seen that strong pattern over an extended time, which has been good for shareholders, as it should be at when a company has extra cash, it should return it to its shareholders. That is what we have seen. We are not convinced we will see a different scenario unfold from where we are now. Issef the bond market showing little signs of fears from the inflation bogeyman. Im looking at the treasury five30 levelhe is the flattest since october 2007. Who is wrong on this one . Does the market have it wrong . Q you believe inflation will pick up in 2018 . Do you believe inflation will pick up in 2018 . The Federal Reserve can have an Unemployment Rate at this levels for a sustained time without it leading to wage growth, but that said, we will not go back to a time where we have rampant inflation. We have technology, efficiencies and a number of markets, which is keeping inflation low, so we think inflation is low for an extended time. We are seeing that through the flattening of the yield curve. What the market is looking for is what is the Federal Reserve going to do next year. It does not make sense that the market will not be impacted by this removal of the socalled quantitative tightening, quantitative easing has driven yields to these levels and kept them here for a long time, when we start to see quantitative tightening take place, we will see the yields pick up. Yousef in terms of the impact on the greenback, investors we have been speaking to say that tax cuts are a doubleedged sword and longterm would add to the deficit and that raises questions about sustainability, where do you see the trajectory of the greenback . We see it under pressure for 2018. When we look at Interest Rates and see how they affect markets or currencies, that is supportive in the early stages of the tightening cycle because the economy is starting to expand more, but we see the dollar now as being quite mature depreciatingalue further from here and other economies around the world start to pick up in a cyclical movement, so we see the u. S. Economy towards the peak of its cycle, and other economies picking up, so on a bilateral basis, we see the dollar underperforming next year. Yousef what is the biggest risk in your view briefly for the u. S. Economy . That we dont see these tax cuts and we start to see the economy cap pass and cant move through Infrastructure Spending and cant expand the fiscal deficit the economy needs to have that. If that does not happen, the economy will underperform. You are sticking around. Patrick bennett will be with us throughout the program. If you are on twitter later today, make sure you follow the first Global News Network built for social media. It will offer live video coverage and update top news reports verified by bloomberg and our 2700 journalists and analysts direct, realtime insight. Here is what is still to come and why you should stick around. Bitcoin futures fall as they trade on the Worlds Largest exchange. More of i am, more volatility, but frances finance minister says he wants regulation in the cryptocurrency. I will have the latest on that. But first, north korea declaring some of the worst Case Scenarios for 2018 and beyond help bad could things get question mark we take a depressing look at that next. This is bloomberg. Yousef this is Bloomberg Markets middle east. We are live on bloomberg tv and radio. Here is how middle east markets closed. The best way to describe it is synchronized swimming. Blames weaker, 80 of the threemonth average. Abu dhabi pulling in some gains. The saudi index up. 25 . Were looking to the saudi budget decision. Will they bring in stimulus and back off austerity question mark egypt following austerity . Egypt also on track. Lets look at the first word headlines. Power outage hits atlanta airport. And othersa airlines to cancel thousands of flights and led to the divergence of many others. Local utilities set a fire may have caused extensive damage in underground facilities. Its first cared three years after being founded and undercutting tesla. Es8 has a range of 500 coal measures sells for 68,000. Tesla model x is 126,000. Nio raise more than 1 billion from investors. Spacex has completed its second supply trip to the International Space station. The dragon capsule was launched from Cape Canaveral friday. It is the first time spacex has reused a recycled rocket to carry the space capsule. It is trying to drive down costs by reusing as much equipment as it can. That was your Bloomberg Business flash. Back to conversations around the markets with quite a few things to keep in mind. If you look at equities markets, a couple of weeks away from completing their best year and some time, but what if things go wrong next year . Our pest a misguided to 2018 is out and on the bloomberg. Pessimisticup 20 28 is out and on the bloomberg. You can scroll through the different years, risks, expectations, valuations, trump wins his second term scenario. Those are the four thinkers. Who thinks about next year . Those are forward thinkers. Who thinks about next year . The lastay to 2028, one there, investor guidance as well. What check in and see keeps Patrick Bennett up at night. He is at the Canadian Imperial Bank of commerce in hong kong. The longer term view starting with 2018, what are the key themes, bitcoin, north korea, not the fed . I dont think it is the fed. The fed is well underway with its removal of accommodation. I dont think that will be something that will trip us up, but id like the way people are talking about and that is where we will focus on the things that may trip us up next year it seems to be very clear that markets are headed to the end of the year having a banner year and nothing really seems to be obvious to trip is over. Removal of accommodation, i guess thats what it comes down to, removal of accommodation, and does it happen at a faster pace and what would be the triggers for that. Having a was conversation with the major investor yesterday around bitcoin. While people missed out on bitcoin is because a lot of us operate within institutions and within the status quo and cannot for seat necessarily the big next trend. That is also part of the theory around the black swan for example. Int else is on your radar terms of major risks that could fit into a pessimist guide like that . One thing that stands out is trade. We know the nafta negotiations are going on, quite fracturings, trump fracture ous. We know there are other trade agreements looking fragile. We believe if we have a breakdown in free trade, then that leads to higher prices, a faster pace of inflation, which would beget a faster pace of removal. We dont believe that is something well priced into the markets of the moment. We see that is a major risk in 2018. To af i will take you shortterm horizon. We have chinas rising interbank rates. We have seen several metrics. How much anxiety are those interbank rates giving you . Not a great deal of anxiety. We often see rates going higher this time of year, but there is something more at play here, and that is trying to reduce leverage in the economy them a so we like that there has been a realization that china leverage is unsustainable in the medium or longterm, and that is why we see rates pickup and we see more than modestly come a moderately over the last few months, and that is likely to continue into next year. That means the cost of capital in china is starting to be more expensive and means that chinese growth is likely to face more headwinds next year, notwithstanding the economy will grow at a decent pace, probably mid 6 range as it has this year but certainly the fact it has been dealt with give us some its stanceher than against or alongside the actual fact that rates have moved higher. Yousef good to see you this morning. I can see you are calm and light of those key risks. G usick bennett joinin live out of hong kong. Coming up, who will replace as jacob zuma . , the party under way choosing the next successor, and it is shaking up markets in terms of domestic assets. We will break it down for you next. This is bloomberg. Ruling south africas anc has started voting for a new leader to replace jacob zuma. A tight race between jacob zumas former wife and deputy and follows the bitter dispute over the decision to exclude a 10th of the delegates. Lets get more from our emerging markets reporter. We have put up this chart, the rand volatility, most since Lehman Brothers collapsed. It is not clear who will emerge is a winner. Is what the chart is showing, the market expecting a lot of volatility and uncertainty about the outcome of this vote. The spot price for the rand is trading below 13 to the dollar for the first time in three months, which suggests some people are putting money on one of the candidates, but it does remain uncertain. He has the most branch nominations, but it is not clear how the delegates will vote. It is a secret vote. Some could go against the branch directive. Yousef is that the bet that will bring this up african economy act . That is what it appears to be but it will be a tough one either way. South africa has had a rough time in the past few years. The economy has really not done anything significant at all. As theeen businessfriendly manned, talking about reviving the economy and addressing this grotesque 28 Unemployment Rate and turning things around. He is the investment communitys is the where as zuma black empowerment choice, so it has divided the anc down the middle, and that is why this produce a crucial. Yousef thank you for stopping by and the insight on the ongoing anc conference. Majortalk about the other story, Bitcoin Futures started trading on a second exchange. This time it is the cme, flipping the switch overnight. ,his is how they are trading bitcoin up 6. 7 , futures less than that. Bloomberg customers can use the ca to monitor the active contract. Cmeimportant is this Bitcoin Futures trading . It will bring down the premium . That is how things have worked out so far. The premium for the futures on when cboerrower than started trading last week. One analyst described it as when cboe launched Bitcoin Futures, it was the minor leagues. The cme futures are the major leaks. Major leagues. Yousef what is the key risk in terms of cme futures differing from the cboe ones . Is that a story of consolidation, or price discovery . Looking at the way it is structured, cme futures is based on four exchanges, as opposed to one first cboe, and also you have similar kinds of structures for limits in terms of price halts and price swings limits, so that is what people are looking at most closely. When we had the debut, there was a real rush into Bitcoin Futures, then a pullback on must as quickly. What we are seeing is a steady pace of trades in the new futures, so everything looks calm and collected. We are not seeing the volatility we saw when the first futures contract started with the cboe. Yousef very briefly, the one event i should be watching out for next in this evolving cryptocurrencies story . What we are seeing with bitcoin is increasing interest from government regulators and Central Banks around the world. You have the finance minister from france and he would be lookht up with the g20 to at the collective regulation of bitcoin. That is something we will definitely keep an eye on. Yousef thank you very much update on markets. Japan is headed for the highest close since 1991 for the topix. We will talk about that and talk as well about the austrian aovernment forecasting 8 narrower budget than forecast. This is bloomberg. Yousef it is 11 30 p. M. In new , a live shot of the Empire State Building in manhattan. Up, some upfutures higher. We are looking at the bloomberg dollar index giving away some gains, down. 1 . We are 90 minutes away from the market open in dubai. Lets check in on first word headlines with debra mao. Vladimir putin has called the white house for the second time in four days to thank the cia for a tipoff that led to the breakup of a suspected militant cell. That information hope to target a Group Planning a series of explosions across st. Petersburg. Russian fsb Security Service says seven people have been arrested, all cleaning to be followers of the islamic state. South africans Ruling National Congress has started voting for a new leader to replace jacob zuma. It is a tight race between his former wife and deputy. The vote at the anc conference in johannesburg followed a bitter dispute over a decision to exclude a 10th of the delegates who the party ruled were not properly accredited. The rand hit a three month high ahead of the vote. Ra has swept to victory in chiles national action. He has pledged election. He has pledged to ease industry regulations and narrow the budget deficit. His promarket agenda push the index to a record high before the first round of voting. Boris johnson has stepped back into the brexit debate, telling the sunday times he wants a deal that would give the u. K. Government the power to reject eu laws. He said the failure to do so would render the country a facile state. On the other side of the channel, the chief eu negotiator confirms brussels has no intentions of offering the u. K. A more favorable deal than it currently has with the block. Deepers looking for a Financial Link with the u. K. Postbrexit. Trade talks in beijing involving and announcing 33 billion dollars worth of support for u. K. Businesses taking part in chinas wealth and road initiative. Other agreements include speeding up the london shanghai stock connect will which allows investors to be able to trade shares on the other exchange. China is reinforcing its desire to be attack leader by announcing that self driving vehicles will be tested on the roads in beijing. Authorities are determined to ease clogged streets and tackle air pollution from trucks and cars. China is the worlds biggest auto market and president xi jinping has determined the country will be a leader in autonomous and new energy vehicles. Film mett star wars t expectations with an Opening Weekend of 220 million in the u. S. And canada, putting it squarely ahead of last years been off movie rogue one him at which took in 150 8 million in its Opening Weekend. The latest installment brought into an 30 million around the world, except china, where it opens next month. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Now for a look at markets here is juliette saly. It is looking good regionally. The regional index up. Friday, so a solid rebound on the back of u. S. Taxsaw as those reforms looked like they will be pushed through. The nikkei important to watch, up 1. 5 . Topix headed for its highest close. 40 minutes ago, we had a huge plunge in the sensex. It is up at the moment. The rupee and the sensex did well as it looked like Prime Minister modis party would keep that, but there is now weakness in the currency. Hong kong hang seng looking good. Consumer stocks driving gains there. Lets look at some stocks in detail we have been watching in the region today, particularly in hong kong, up by 3. 8 . On bloomberg tv earlier, they said they would revamp ipo rules and allow companies with dual class structures to list in hong kong. Nex up 44 after oracle agreed to buy the company as it pushes deeper into new markets to gain customers in cloudbased collaboration space. 4 optical following falling 4 . It told the market it was not aware why there had been such a big selloff. Morgan stanley saying it is one of the companies and favors, but still seeing weakness in that tech space. Having a look at the regional index, consumer stocks looking good. 1. 3 , andlayers up youre finding it hard to find a losing sector today. Butos flat with energy, overall we have rebounded from that selloff on friday. Yousef thank you. Lets get back to the story around saudi arabia. They will release their 2018 budget tomorrow. Sources say the kingdom plans to raise gasoline and jet fuel prices. More fiscal reforms are expected and subsidy reductions as well. Lets get to the managing director and cio and head of investment management. The key question is for the saudi budget, whether we will see a meaningful shift in policy from a policy that focused heavily on austerity to keeping it a bit more stimulative. Willl bets are that you see some expansion in terms of fiscal situation, so we believe that expenses will increase. It is cliche to say this year is knowsfor saudi, but mobs there is mbs belize room for improvement. Stabilize. Prices the oil price is not high enough, so they have to issue reforms. On the other hand with the improvement of oil prices they are much more relaxed to go with less fiscal austerity, so key points to watch tomorrow, publicsector wages more than 50 of the budget come key for shortterm, and many upside could be on transport where we expect something. Also, more stimulus for the economy to turn the corner in 2018. Yousef does that change how you position yourself in terms of allocation in the gulf, specifically saudi arabia . We saw some cement stocks rally. Is it time to make a just mr. Portfolios . Make adjustments to portfolios . This improvements for saudi, uae, it seems to indicate next year and gcc will be better. We continue to be cautious with saudi Consumer Companies because they could be impacted by things like vat. We like banks because of rising Interest Rates, Insurance Companies, but saudi is part of our allocation. Yousef we have built a chart on the basis of some of your research. 6808 on the bloomberg. This is the question that needs to be asked. Barely below the flat line. You compare that to the msci emerging market index of 38. 1 . This is over a oneyear horizon. The disparity is huge. Arab stock markets have lagged. Where is the bottom . You should invest when the headline flows have been difficult. This year was very tough. , chart tells a thousand words the performance has been huge, markets are cheap. The news flow is expected to in proof, and the good news is that it is full of opportunities. Even though your chart shows flat performance for the year, some stocks are up 50 or 80 . Theser one was up 40 , so markets are full of opportunities. That is key for active management. Market ise bond arguably come especially government bonds, has outperformed equities. Verse charts you can look at. In terms of the highlights they are various charts you can look at. In terms of the highlights, are you bullish on the egyptian fixed income story . Fixed income leads equity markets usually. T has been fantastic this year high Interest Rates have been attracting international investors. The development is shifting to equities. In egypteen building from 10 to 15 to 28 . Storiesnue to find there, chief valuation. Real estate is also interesting, so egypt remains high on our agenda. Yousef are you a betting man . We have the anc conference. One person will emerge. Which side of the trader yuan on the rand . The rand could be the Biggest Surprise next year. This ugabes dismissal could be the start of an african spring next year. With the reforms in south africa and improvements in commodities local equity rand, performance could be very interesting next year in south africa and the rest of subsaharan south africa. It is a busy week with south africa and many others. Thank you very much. He is the managing director, cio, and head of investment. Is up next. The austrian government forecasts and never narrower budget, but we speak with Scott Morrison to flesh it this is bloomberg. Out and get to the bones. That is next. This is bloomberg. Yousef this is Bloomberg Markets middle east. Andre live on bloomberg tv radio. Embraer i am yousef gamal eldin. A power outage it atlantis airport has forced airlines to cancel thousands of flights. The fire may said have caused extensive damage in an underground facility. Its first cared and is undercutting tesla. Columbusrange of 500 and sells for 68,000. The model x is 126,000. Nio raise more than 1 billion from investors recently. Spacex has completed its supply trip to the International Space station on friday using a previously flown falcon rocket. It is the first time spacex has used a recycled rocket to fly a reused recycled capsule. That is your Bloomberg Business flash. Lets talk about the ninth chinau. K. Economic and financial dialogue that has wrapped up this weekend was some reward for british Financial Services. Figure in the u k delegation spoke exclusively to bloomberg and explained how western Asset Management with china will drive growth of the next decade. Just last week we were given we were given approval to start arm asset start our asset business in china. We were given that license a year ago. We were given permission to start business, and that business will be manufacturing and selling Investment Products in china. This is a big first for us, and potentially an important development. , they welcomed an application to get a pensions license come at making us the First Foreign Company to have a pensions license and china. It is a complex process, and rightly so. It is complicated by the fact that the regulator, which is a fine regulator, pagenaud chairman at the moment. Organization of these things in china takes time. Growth prospects for the Asset Management side come are you adding headcount next year . Are. S, we it derives largely from the fact that chinese portfolios are massively undiversified internationally. The insurance sector has meant the Insurance Companies can now invest in a larger range of. Ssets overseas there are still quotas and licenses, but the direction of travel is opening up. Into andet management out of china being one of the great growth areas in Financial Services for the west over the next 10 years. On the Life Insurance side, have you had conversations with your partners and willing to give you full control of the business at some point . Partner is important for successful businesses in large emerging markets. If you get on very well with your partner, as we do with ours, and some would say our joint venture is characterized by some of the best relationships in china, in terms of do i want to take control of this, that question is not compatible with the Partnership Spirit of a joint venture, so it is there for the future if we needed, but our strategy does not depend on getting control of that business at some point in the future. Are you interested or du have an appetite for chinese bonds now or in the future . Our emergingmarket bond fund is one of the largest. Stocka great idea, these connect and bond connect programs. Im sure eventually that the chinese will be very cautious at the speed of development of them. I think we will see a number of baby steps. I think it will be some while the for you see complete fungibility between u. K. Or hong kong stock exchanges and china. Lets turn now to the Australian Government forecasting an narrower deficit as profits boost the tax take. T even as there is we each week wage growth. Lets kick off with wage growth or the lack there of. You have shaved off a quarterpoint afford estimates. We do say you are being over optimistic . No, i wouldnt say that. We look at this every six months. What has been happening in australia is the Mining Investment boom and the impact on trade, Commodity Prices has disrupted normal transmission in the market. With that now passing through the economy, we are expecting the normal relationship in the labor market to come back into action, and that would mean as the labor market tightens, we will see stronger wage outcomes over the next four years. The other part of this was september low consumption figures, but overall, we have an improvement in the budget positionposition that has come from budget payments because of stronger reforms in the welfare sector and keeping welfare spending under control. Suchf why has there been little improvement . If you look at your peers around the world, the Unemployment Rate is lower. Why is australia different . For the reason i just said come and that has to do with the impact of the Mining Investment boom on the labor market in australia and the difference between producer and consumer wages. That was impacted by exchange rates, which meant consumers were able to realize wages that were not paying well above where productivity was at. Some years later now, that impact is working its way out of the system. We are seeing those two lines coming back together in a normal transmission on wage market outcomes starting to prevail. Yousef you have corporate profits that are being swelled by higher commodities prices. Conservative enough given the volatility we often see in those prices . We dont see conservative enough given the volatility we often see in those prices . Anything in todays update on a budget that has anything to do with what is happening with commodities prices. We have been extremely conservative on those things our have an impact given resources focus come up but we factor that in some time ago. This budget has a price of 55 on ion are, so we have derisk to the budget around those issues and you are seeing an improvement in the overall economy and it comes down to the Mining Investment boom. NonMining Investment is expected to be up 5 . Private investment is up 7. 5 , Public Investment up 12. 5 , so it is an investmentdriven story in our economy at the moment. Minister hasrime foreshadowed efforts to lower the income tax. Shot in thea huge arm for households. How realistic is it . Totally realistic. That is what we are focusing our attention on. We want to put more back into the pockets and households of australia, andin that is the focus of our efforts between now and going into next year. That will be done while at the same time not risking our aaa Credit Rating in a challenging environment. It is one of the few economies that has maintain that. Just making sure our expenditure is under control and we are maintaining our trajectory back to a budget balance in 2021. We are having this conversation he year ago and it was forecast to be 1 billion, so there has been real improvement over the year and a lot of that has come in just the last two years. Yousef the rba has been on hold for 1. 5 years. ,s you look to the road ahead how much tolerance do you sense that all strains have for higher rates . That australians have for higher rates . There is no risk of that right now. This is a decision for the independent reserve bank in australia. One of the things we did earlier in the year was derisk the environment particularly around the Housing Market. We had some hot markets in sydney and melbourne and there drivingrest that was that some by supplydemand balance. We changed the rules around interestonly lending and that has taken heat out of those top and markets meant which means it has come back to a soft landing, and that is derisking the Housing Market significantly in australia, so that has proved a more stable place going forward, rates more for generally, the cash rate, it means there is no real pressure on the cash rate to deal with Housing Market shocks because we have been able to have a very calibrated policy response, which has got us into pretty smooth territory. Yousef the u. S. Dollar has been going from weakness to weakness. As you look to 2018, will you get relief on the currency front . A weaker aussie dollar is so that you could use right now. That has happened a bit of late, but we dont wake up every morning and make our decisions based on where it is trading on that particular day. We take a longerterm view on these things, but the big issue at the moment is what is happening with Corporate Tax rates. Its not just the trump tax cuts which are not that far away, but the french government, the u. K. Government, our own region, were seeing similar efforts. Even the japanese government has been making noises. We have our own response to that with our enterprise tax plan would see corporate rates come down to 25 . We have half that through parliament and remain committed to getting the other half through. Yousef im looking at the statistics, would see corporates come down to 25 . You are the first treasure to enjoy better revenue than forecast. How confident are you on the outcome for 2021 in terms of achieving the surplus you desire . A projection, but a sound projection, and it has improved over the past two years. One of the reasons we put ourselves in that position is we have just been very sober when it comes to the forecasts we have made. Eral years ago when i made became treasurer, i took difficult calls about derisking the budget and we have continued to do that. I think that has been well received by the ratings agencies and people looking in on the Crane Company that the numbers they have seen a real him a credible, and the government has a plan to return the budget back to balance. Takese had five budget up , and all of them have maintained projected balance back in 2021, and that balance is only gotten stronger over that period. Yousef when key risk for 2018 that could derail your forecast . Something that makes you a little bit nervous for 2018, what would it be . The two issues we always have to a managed in australia as a big trading nation, china are biggest partner, but there arent any short or medium term risks that make us anxious. We maintain an excellent relationship with china and continue to work that relationship practically. On top of that, we have been getting ahead on managing the risks in the housing sector, which i know from overseas that there has been interest in that over the course of this year and we have that in the overall level of Household Debt under control as well. We are seeing a real shift back loansncipal and interest as people are converting across and that is the risking the market. Is derisking the market. Yousef Scott Morrison, thank you for joining us on the program. We are counting you down to the market open in the emirates and the region. Lets tell you what is in focus. The National Bank of kuwait is considering opening branches in germany and india. They are one of the biggest banks in this part of the world. Also, developments in israel around the teva job cuts. The Prime Minister is helping to buffer workers from the turnaround plan. 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