Timeline for the National Peoples congress in beijing. He says it should remain stable over the year. But it does remain a sensitive market. They have a new offer for striking workers at the mine in chile. If these negotiations are to resume, the unions involved have yet to respond to news of the improved offer. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. A quick market check now. Later on. Ve in update this is bloomberg. Welcome to the best of Bloomberg Markets middle east. Major storiesthe driving headlines. President trump signed a new travel order. Six muslim majority nations are on the list. But iraq escapes the ban of this time around. Arms fighters in libya seized the biggest oil port. Futuristicto bring transport system to the gulf. Developer has gotten International Attention on the back of this deal with donald trump. Business at home will be in focus. Groupke to the damascus chief officer. Lets start off with your sense of the operating environment. This chart tells a story of highend dubai property. You can see this going back to 2009. You can see the downsides pressure rise. This is size per square foot. Both highend of villas and apartments. What is the property story . To understand where we are today we need to take a step back and look at it going into the crisis and coming out of the crisis. Until 2008, the dubai market had been growing. Not unlike the rest of the world, dubai had a tough financial crisis in which asset prices have crashed. It took to buy for years to come back. To compare that to london in the early 1990s, it took them nine years to recover. It took to buy four years to recover. In 2014. A great run yousef what happens after this . Good in 2017. In reals worrying estate property is when prices go up very strongly in a short period of time. Especially when products are sold on a credit basis. Yousef one of the key themes over the show, how is this affecting your business . A lot of exposure in dubai. This is a place that is easily. Ffected i changes the strength of the dollar reflects the strength of the dollar in the uae. It is a safe haven for investment on a longterm basis. Remain, theyets remain whether currencies are pegged. That does not impact of the strength or weakness of the dollar. The asian markets, we have seen more demand from them with a Dollar Strength because here is a great motivator. People think things will get worse before they get better. People look for a flight to safety and dubai offers that for the region. How much cushion do you have against downswings in that dubai market where you are highly concentrated . Are you planning to expand your assets from beyond that city, more than you have already . If you look at our history, we have been predominately dubai focused. 90 of our deliveries came from dubai over the last 10 or so years since we started delivering in 2006. Dubai will continue to be a core market. Our land bank and operating profits will continue to come from dubai. I get asked about diversification all the time you read it is difficult to find a market as attractive as dubai on a risk adjustment basis. Some analysts have downgraded your stock on concerns that rising cost well impact your profit margins. Will this be a problem . This industry by its very nature, the Development Business is cyclical. You cannot wish it away. But we can run with it. Assets actually acquire at interesting prices when markets are down and deliver and position your products in a way that will allow you to achieve a financial result. Margins, there are down cycles that come under pressure. But it is a function of how you have positioned and developed your land. Business, look at the on a longterm basis as opposed to a shortterm cycle, that business goes in and out. They key is to manage liquidity. Yousef that is key. 8. 5have a cash balance of billion, what do you plan to do with that kind of money . Maybe exotic adventures on the agenda . I think not. We are conservative. There are good and bad markets. Our stuck to our debt guns and done what we have always done. There are regulations where money comes into the project that can only be spent on that particular project. We have a very healthy cash balances. But we are near enough to the cash. Latest band the from muslimmajority countries, the six countries, does that concern you . Do you regret having that with donald trump . We create value for ourselves and our we associate ourselves with good brands, including the trump organization. We are proud of the partnership, it offers good value to us. We got the first golf course in dubai. It is a success. Yousef you are not reconsidering that . You might have had new projects on the radar but perhaps those are no longer a consideration . With President Trump coming can the office, what they and cannot do would be a decision for the trump organization. However, we are proud of the association, like we are with all our print brands. Does that mean you are looking into other partnerships . We continuously look for partnerships consistent with our brand and positions that will add value to our partners. It is what we do as a course of business. Yousef lets look at this function to give our viewers an overview. Where do you stand in terms of your peers . These are blended earnings. The orange lines is where your peers spend in terms of average. You are trading an average of 4. 9. Is the market miss or misunderstanding what the market is about . The market will do what it wants and it is not for me to comment. But time and again, for our investors, we have a fantastic investment. For example, people who came in recently on investor summit day where we met key shareholders. Especially shareholders that came in from an ipo and have doubled their fortune. Forward we feel strongly about the returns we can generate for shareholders. Still to come, our interview with of the ceo of Hyperloop One on plans to bring the superfast transport system to the middle east. Yousef welcome back to the best of Bloomberg Markets middle east. Elon musks vision for a superfast transport system he says is a mix between concordes and then air hockey table is on the way. They are in talks with sovereign wealth funds to bring the project to the region. Here is Hyperloop Ones ceo. Lets start with a preposition in terms of opportunity. I will pull up this amazing function. With as a map of the gpp different countries. What i have added are the road networks, which are quite scarce in terms of connecting different countries. You can see in the uae, the road network is more dense. How long would it take me with your system to go from dubai or abu dhabi to riyadh . With our system we could go to any city in less than an hour. Considering the gulf region does not have developed rail network, considering some of the challenges we have with road systems and their development, it is a new mode of transportation that has the speed of an airplane, a safe environment, and allows us to do that at the cost of a bus ticket. And transform the potential of an economiccc powerhouse, as well as based on an oil economy. You said you are in talks with several wealth funds from four of the six gulf states. What can you tell us about your efforts to raise 300 million from Global Investors . What else can you tell us about these ongoing talks . We are in talks with investors around the world. Some are in the gulf region. We are a very interesting investment hypothesis. We are a technology company. It will take a lot of money to develop this mode of transportation. We have already raised 160 million. Not only will we develop the technology, we will create partnerships with a funds and other Pension Funds to finance those projects. We are particularly happy we recently were joined by the cfo at uber, at a similar phase of their development. Join the company with 300 employees, raised that to 3000. And he was the treasurer at google where he invested in green energy. We are a interesting, unique investment opportunity. Yousef clearly on the line of expansion. But to pick up on what you are doing in this part of the world. You are looking to set up a subsidiary, a local presence. How big is that going to be, who are you talking to . We do see the region is one of the areas where hyperloop could happen first. Our Business Plan is to find an environment in which we can select a route. We have been worked working with the land and transport authority in dubai, the emirates, and across the region. We have to start with something that makes sense at the beginning to build that first leg of a longer route for a golfwide network. It may be 30,that 50, 70 kilometers. That first leg of the hyperloop we are building will take a partnership with the government, regulator, transport authorities, and those required to fund and Infrastructure Project of this magnitude. The gulf region could be one of that places this happens first. The uae could be one of the places where this happens first. You see some of those factors aligning in a positive way. But there is a lot more work to do. When you mention bringing in an executive from uber to help the company grow does that mean you are planning to add staff to your business . Yes, we are growing at about 25 employees a month right now. We just passed the 250 employee point. We will probably double by the end of 2017. We expect it will have a Significant Growth of our team here in the emirates. We plan on opening up a subsidiary here. That the projects we working on continue to develop. We will need engineers, people developing technology around the world. That is one of the most intriguing opportunities for any country that moves first, the first mover advantage to building that ecosystem, creating jobs, partnering with universities, to develop part of the system that will be built over the next three to five years. Yousef lets cross over to our top stories. Chinas number two Telecom Company fined for being selling technology to iran. Zte will pay as much as 2 billion. Peter, tell me the details of the settlement. Has agreed to pay 1. 2 billion in this settlement. Their pleading guilty to three felonies including violating export rules of the United States and interfering with the investigation. The u. S. Is trying to make an example out of zte. You saw government officials, including wilbur ross, come out aggressively and say they are making an example of the country to show what they will do when countries of violate the export laws. Zte was contrite. The ceo admitted they had wrongdoing and that Company Detailed a long list of changes they will make inside the company to scrutinize more carefully how they comply with these regulations. Of 1. 2 billion. What are the allegations . That is the question. Zte is a Chinese Company and how it falls under u. S. Export rules is important. Buys components from companies in the u. S. Including qualcomm, and packages them into their technology and exports them. The allegation is, they exported equipment worth 32 million to iran without proper approvals from the u. S. Government to ship that technology out. Yousef what does this mean for zte Going Forward is a business trying to grow . It is interesting to see reactions. Shares are up as much as 9 . They see it as a positive move because the company is getting uncertainty behind it and terms of dealing with u. S. Authorities on this issue. The investigation has been going on for a while. It is important to them to have access to the components from companies in the u. S. Like qualcomm, it is critical. They want to sell more gear directly to the u. S. , both Communications Equipment and mobile devices like smart phones. We will see if they are able to use this to build a business in the u. S. Egyptsup next, privatesector activity contracted for a 17th month. The kleins are slowing. Yousef welcome back to the best of Bloomberg Markets middle east. Sectoroil private extended 17 straight months of the declines. Its deterioration rate is improving. We went through the numbers. As you know, some of the data in terms of pmi, looks like strengthening is happening in the underlying the drivers in the economy. I will have a chart to showcase what is going on with of the pmi. Fascinating, this change in terms of sentiment, isnt it . Another milestone, a remarkable turnaround story in a very short time. That is right. We are looking at a contraction in activity or an indication iso the emi showing Activity Still in contraction territory, below 50. [no audio] the last two or three months characterized by pessimism and insecurity, about the Exchange Rate. Resolved with a significant evaluation. In the initial impact was one of concern. And uncertainty. Coming out of that you are starting to see the benefits of such a bold step, by way of renewed confluent influence. Yousef where does that leave us . One of the best currencies has been the pound. Analysts say this is going way too far and needs to scale back. Where do you see a relatively realistic level of a Foreign Exchange rate . I think it consolidates over the course of the year. In the first few weeks and months of such a dramatic change, flows will come back, Interest Rates will be higher. The Downside Risk is much less now on the Exchange Rate. It is understandable you are getting flows back into egypt. At the same time, there will be demand for foreign currency. These alternating flows will theribute to consolidation, 16 to 18 area. A dramatic pick up as you well know. We are still in contraction. I guess that is what you would expect. 40 , youncy is that would hope you would get improvement. What i want to ask, what measures from the government can we expect, should they try to solidify the momentum . I am not sure the objective government policy is to get above the 50 line. The growth will start to recover. What you are seeing in egypt is not isolated. You have to recognize the pmi globally and regionally are looking very good. The export order index rose above 49, just short of that 50 area, indicative of two things. One, and Exchange Rate benefit coming through. Environmental looking that much better, allowing exports to flourish. Confidence, boost but at the same time reforms that will be ongoing in terms of subsidiary reform. These are headwinds to grope, to some extent. It will be a slow process. But the context of Global Recovery is a good one. The steps taken show a little bit of fruit. How would you describe the Employment Situation there . We are still seeing the rate of waslosses, not as bad as it. That is understandable. You will not see a dramatic turnaround in that outlook immediately. The employment picture will change with a significant lag when you start to see a more consistent trend of improvement in activity. Expecting a dramatic change in the Employment Situation. But it will take place over time. So long as policies are maintained throughout stability. Yousef we will talk about the fed a little more in a second. But in terms of the impact of the u. S. Dollar in these parts of the world. Are dependentbai on Foreign Investors. What is your take on the uae and saudi economy . Adahe elements in the pmi have an aspect, a global aspect, you would expect those to be towing some vulnerability the strength of the dollar and local currencies. Order growth has been strong. One of the stronger parts of these surveys. What you are seeing, companies in the region are withstanding the dollar. That is not to say any further strength in the dollar would make it would make things tougher. At the moment, the dollar appreciation were seeing in the past few months is something that has been managed reasonably well. Orders look good across the board. But the export order side looks good. Yousef next on best of markets middle east, a developer giving us updates on his abu dhabi it is 12 30 here in hong kong. South korea, a big story. The military on heightened alert after the Constitutional Court upheld the impeachment of former President Park geunhye. The law. Ted park now loses her powers and immunity. An election must be held in the next 60 days. Wider effects of these legal acts are critical. The advantages we gain from dismissing her will be large. We announce the very unanimous opinion of the judges. We dismiss park geunhye. Trader has been convicted in singapore, pleading guilty to eight of 23 charges, fraudulent orders after he traded. This is the first case brought jointly by authorities. News,gapore, the big property developers, look at that, top gainers. The government is easing rules. Revised,es are to be Holding Shares of three years, down from four years. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Juliette will give us an update on the markets. Awaiting the u. S. Jobs report coming through later tonight. We are seeing the yen go up, the nikkei up 1. 3 . A lot of good support coming from those exports. The hang seng index, there has been weakness coming through from energy players. Crude below 60 a barrel. Outside 9 . Saying they will not be coming back into the struggling operator in hong kong. The shanghai composite fairly flat. Year,derstatement of the the markets are sensitive. Difficult to forecast the movement of them yuan. I, were seeing gains up for tens of 1 . Theres been some movement from those chinarelated stocks in korea. And we are counting down to the opening in hong kong and china at the top of the hour. This is bloomberg. To best ofome back Bloomberg Markets middle east, i am yousef gamal eldin. Now seeperty developers brexit and a stronger dollar environment. Tracy alloway spoke to mall magnate in abu dhabi. Currently in the process of building very Large Properties uae, including a 1 billion Shopping Mall in abu dhabi. Thank you so much for joining us today. Start with outlook for property developers. We have had some caution in the industry here in the gulf. Are you seeing that . I think everyone has gotten more cautious over the last few years. The price of natural resources, world trade, and a slowdown in economies in many parts of the world. Tracy what about retail, specifically . Your building a mall very close. Firstl house the gulfs macys store. Is now a good time to tap into retail demand in the gulf . Ken we think it is a particularly good time to develop something of this scale. Of aeason is, this is part mixeduse project, which is what we love to do. It is not just about retail or Department Stores or entertainment and restaurants. Hotels,out two great rosewood and four seasons. A major center of commerce here. The Abu Dhabi Global Market where we are standing today. Mixeduse is key to the success of our projects and it will be the key to this projects success. We are developing a project here combined with a gallery of that we opened three years ago. When finished, it will be the luxury, forform for midpriced, for family, for entertainment, food and beverage. It is a true destination here for abu dhabi and the uae. Give us some color on the consumer demand you are seeing right now. We have the drop in oil prices that is hitting government budgets in the region. Is that feeding into local consumer demand . Ken i think it has hit everyone. If you were to gauge and pull poll the regional retailers you would see many of them are down. One can say that about retailing around the world at the moment. I do not think it is generic to this particular region. I think it is cyclical and temporary. In this part of the world, one of the incredible things we know about how people shop, eat, entertain, is that they spend on average between four and six and a half hours in a shopping center. Many times they come for two meal periods. You have to look at these local trends in local profiles. I think what we are going to do is change the number of trips people make from abu dhabi to go shopping and dubai. Give us additional contexts. When you look at the Global Property market it is hard to find markets in different parts of the cycle. Where would you deploy Additional Capital right now . In addition to abu dhabi, which is the only location here in the middle east that we are deploying this kind of capital, because we believe so strongly in abu dhabi, with its airport expansion, cultural facilities, and the commitment the government has made to quality growth in tourism, we see that as the pillar, the foundation for why we are here. The other parts of the world where we are investing a lot of money happen to be in the united dates. Two of the key places, west side of manhattan, and Silicon Valley, santa clara, california. Two of the major markets we are going into. Plus, investment in southeast florida. One of the things i am interested in in the wake of the grand avenue project in l. A. Is whether you see more potential for teaming up with chinese investors and companies, especially here in the gulf region . Ken we have not seen that much interest in developing development hear from the chinese. Not as much as in the United States. We were fortunate that year and to find a great partner in cccg who joined us in developing a designed project in los angeles, it is just getting underway. Have been going into major cities in america, gateway cities they are looking at. But i cannot tell you how long that cycle will continue. It is not something you can predict that carefully. Tracy lets stick with the u. S. Property market. We have had worries about a slowdown in commercial realist eight. Now we have a fed rate rise next week looking all but certain. What is your outlook for commercial real estate . Ken the industry is gravitating toward core Quality Asset development. That is as simply as i can put it. Best developers, markets, locations, programming, design. It has to move to the top of the chain in terms of quality. Otherwise you are not going to attract the tenants and users. You want to attract the consumer. It is about bringing the right programming once you have the design. There is still opportunity in our markets. It is very selective and you have to be very careful, but there is still opportunity and we are seeing it on the west side of new york, southeast florida, Silicon Valley in california. It is difficult to talk about u. S. Property without talking about trump, who of course has been vocal about infrastructure spending, stimulus. How would that affect your business . Talki am not going to political persuasion, but i will tell you, there are some things i do not agree with what he is doing. But the things i do agree with what he is doing, involved deregulation, infrastructure investment, and encouraging Foreign Investment in our country, and further exports. Those are things that are going to be very helpful to our industry. I am pretty bullish. Yousef coming up on best of Bloomberg Markets middle east, oil prices saw of brief dip. We look at the conflicts impact on crude. Yousef welcome back to best of Bloomberg Markets middle east ,. Have interrupted oil supplies this week. The rebels that seized Oil Terminals and infrastructure in the divided country. We have the details. Walk usgin with, through the actual impact on production. We did see a price rise. Our investors getting ahead of themselves and misjudging the impact . This is a very volatile situation in libya for production and exports and oil prices. It is a big, unknown situation where we know production can increase. Howe is uncertainty about damaged fields have been through work there. One of the main blockages is the exports. When these ports switch between hands of one group versus another, or they are blocked for political reasons or to get kneesge, that takes the out of production because they cannot get it out of the country. It is a very fluid situation. It will continue to impact the market because more production is bad news for opecs plan to try to cut production and increase prices. We will see that going backandforth. Yousef how is opec doing with the program in terms of cutting out oversupply in the market . Out, youticle points come back,hale 2. 0 they are leaner and faster. There are pressures on opec. Some within the group, as well. The group and needs to comply with a cuts, according to our survey of production for february. They did meet the cuts. The members of the group that agreed to reduce production did what they said they would do. Some numbers, libya, nigeria, iran, are left out of the agreement. They do not have to reduce production. They can increase because they were at artificially lower numbers before that. That has brought overall production up because those countries are increasing output. It is an issue within opec. You have shale coming on more strongly. That will put pressure on the market because we still have those stockpiles out there if production does continue to ramp up. Delays are drawing down those stockpiles and that will put pressure on prices. We will see prices bounce back and forth, especially with strong news like out of libya last week. This rising tide of u. S. Up sevenlatest numbers to 609, that is the sixth straight week of gain. They are now above 9 million again. They are sort of where they were. Opec is stillat having critical impact on the overall oil market. They have some open people to decouple the oil price from the dollar over the last month. That is quite remarkable. I would say overall, i see oilwhere a cap to the price, not too far away where it is now. You have increasing production in the u. S. , as long as oil prices are above 50. Going forward, we will see some slowdown in the global economy. We will see a stronger dollar, you will see china breakdown. Europe and japan are ultimately more recessive than anything run massive they commercial surpluses. It is wise to be prudent, rather than to optimistic on oil price. And want to pick up more on the oil price. In ave seen oil trading really tight range. What is the prospect we actually get some sort of break on the downside or upside before opec meets in may . Very difficult to say. I a will have to pause on that. Marginsspeaking, those it is difficult to forecast the veryrice in nearterm. I think it is important to have in mind there is a cap there. It cant go too much higher. Region, the governments are prepared for that and taking fiscal measures to that extent. It, that is very difficult. Yousef still to come on best of Bloomberg Markets middle cut its outlook from negative to stable. We look at the reasons why. Yousef welcome back to best of Bloomberg Markets middle east. S p changed its outlook from stable to negative. They say it reflected the external position that could deteriorate further. We spoke with managing director. Lets kick off with the story. Our you surprised, given the amount of the sovereign wealth . An example of changing times. You look at what is going around in the region, oil prices, political instability. You do not expect to be surprising for countries like qatar when their income is nondiversified. Spending, hosting the world cup hopefully soon. They still have to keep things going with no diversified income. This could keep on going in this direction for a while until you see a change in the way things are done. Whether oil prices come back to where they were a couple years see a longterm plan where income starts to be diversified. In qatar or similar countries. One of the big stories has been sales of middle eastern debt. Most governments and companies we have this qatar change in the outlook. Will that not the appetite for qatari debt or gulf debt in the region . I think the rates will go higher. They will keep skyrocketing. We mentioned that earlier. The first time you borrow, your Balance Sheet is clear. The next time you have at rages debt. The third time, you are a risk to the borrower. Your rating goes down and then you will have to pay higher. Also, the recapitalization plan. Have they laid out details, what they will do in the next few years . You spent some time digesting this plan. What is it mean in terms of how you see this company . As we all know, they have a great legacy. They built many of the prominent projects in dubai. Sellingstarting with assets, which was outlined in the new Business Plan is a good start. You do not need a aramco assets. They will have operating cash flow and be able to get fees to submit and apply for new projects. They do have projects in the pipeline. I believe this company could make a comeback if the Restructuring Plan goes in the right direction. But selling noncore assets is a good way to raise cash and release burden on the company. Out to oneoaden and of our big themes for the show. That is the possibility of the said raising rates as soon as march. What do you think the impact of fed tightening will be on this still have a we dollar peg from a lot of countries . The first one or two increases i do not think will affect us much. On the short term, i do not think it could really affect us. Medium or long term if they keep hiking the rates by three years, or every year, you will have problems in borrowing. Yousef i want to start off with this story before we get into dubai volumes. How will this spring momentum back into people looking for proxy trades . It is very clear to see this is an intention that goes along well with all the different measures the stock exchanges are taking in the region to bring liquidity, to present to investors alternatives they can have to have exposure to stocks in the region. Ets have never been popular among investors in the uae. But the stock exchanges are doing everything they can to promote them and make them more popular. This new platform is integrating all of the Market Players as they are supposed to be together in order to hold market functioning as good as they can. One etf being traded. There are many signals that they are presenting more products and options for investors to come and put their money into the uae. Lets take a step back. Another product investors have access to at the moment. There is obviously some argument the levels that we see getting exacerbated. That is another topic. What i want to ask you, what are the first highlights of the trading session as we count down to the first day of market their . Inliquidity is an issue here the uae market at this moment. We saw a slow day of trading here on sunday. The average volume trading in dubai and abu dhabi was around 50 of its 30 day average. It is quite low. Interesting to see, most of the trade was done with a small and mid sized gaps. We do not see a lot of trading happening with the gold chips recently. That is natural. The sunday of the day we do not see a lot of Foreign Investors in the market here. Starting today we should see a pickup. But off to eight slow start. Yousef what else is catching your attention when you look at equity markets . An interesting point right now, one was closed yesterday. S p changing the outlook for the sovereign region from stable to negative. Some people say this could bring some sort of pessimism to a market that has not been very exciting recently. Qatar resumes trading today. It could be the focus of attention. Yousef that is all we have for this best of Bloomberg Markets middle east. Busy inardon this this part of the world. Do join me then. Is 1 00 p. M. Here in hong kong. Heres an update of your top stories. South korea has but the military on high alert. Live pictures out of soul. The Constitutional Court upholding the conviction of President Park saying she had continuously violated the law. More details within the next 60 days. In china, the outgoing governor said President Trump and the fed are among the many reasons for this years volatility