Infrastructuredriven investment growth across this region. Taking a look elsewhere around the region, a bit of a faltering when it comes to japanese markets. D. E 20,000 level being eye the topix in the red. Some gains in the austrian stock market on the back of the australianoil stock market on the back of the rebound in oil. The gold miners doing nicely. Ofdid have a brief period her spite when it came to the goal prices. Take a look at the movers. Respite when it came to the gold prices. Take a look at the movers. This is the first chance investors have had to react to that 100 30 million profit warning, expecting that to be Million Dollar profit warning, expecting that to be a loss. , a 14 yearg sold off low for noble group. The bonds are getting sold, the most on record since they started trading two months ago, the 2022 bond dropping the most on record, and some concerns about Revolving Credit Facility coming due. Company that has that 130 million loss in the back of being on the wrong side of coal bets, and it is the latest hit after it came under attack from Iceberg Research for accounting practices, got caught in the global commodity selloff, cut staff, and management does not seem like it can get its head back above water. A quick check of the first word headlines. Told thatrt has been beenphone calls had rded saidmer numura manager traders were warned not to live. Calling on policymaking police to make three more hikes this year, and start shrinking the Balance Sheet to avoid overheating the economy. Ngren still expecting growth to bring unemployment down and would represent a sustainable overshooting pays. Chinas acquisition frenzy ending as it began. Dealmakers are now facing tighter capital controls and increasingly wary counterparties. 67 in the first four months, the biggest drop for a comparable period since the financial crisis. Indias gold imports quadruple driven by anticipation of a recovery in demand driven by the traditional wedding season. 98rces saying shipments rose tons from 22 tons a year ago. Jewelers were protesting and excise tax on julie made and sold locally. News is your global tax on jewelry made and sold locally. Emergingmarket stocks have rallied 23 in the past 12 months, but the bears are saying watch out. Phthisis guest in advises investors to stay the course on developing markets. She is with us now. You are always bullish, arent you . It always seems that way. , we are more conservative on china, more lish on india. People are well past looking at emerging markets as blocks, individual countries with individual dynamics. I get a bit tired of this. You can have a broad brush because there are so many nuances to it. See clients moving towards countries as regional strategies. What would be interesting is if you sat at the airport in hong watchedin singapore and where International Investors from asia are going. They are going to latin america, also out of the middle east, looking at some stabilization, improvements in brazil, even mexico. Investors still looking here, but more at india, cambodia, thailand, and still worried about china. You have called for a shifting towards the e. M. Space for some time now, but given the valuations we are seeing and the , calls to go long emerging markets, do you see this becoming too crowded . In equities right now, the first thing you think is developed markets. Developed markets still have gape a bit of a valuation to emerging markets in terms of pricing, so from that perspective, emerging markets are interesting. Lets bring in what has been going on, going on since february last year, this ramp up of investment flooding into this space. Forget about the different is again the search for return, but are they getting it . It is starting from a base of severe under allocation. Investors sell out of emerging markets from a low base to begin with and the low race and equities overall, which is why you see them sticking with places like the u. S. Where there is some clear nervousness with the way devaluation czar valuations are. There are still lower allocations than historically, so there is a buildup there. You are bullish on the new economy, and we are seeing that push up the china index. 8503 shows you the index has surged to a new high given that drive in tech shares. What do you make that it is now more expensive . First of all, people have differentiated within em. If you look at em indices, they only represent 600 stocks of 8000. It is very light on many stocks exposed to the new consumer, the new middle class, so you see a rally here, but when you look at active investing, they are banking,t tourism, mobile, Internet Technology in terms of shopping, so it is a differentiation. Cpi numbersad the out of china, it was air travel costs that pushed that number up to that one point 1 range, so what other dynamics do you see than mobile banking and the Digital Space driving that middleclass consumer story . Middleclass consumer wants the tech, toys, and Home Technology people see on television, amongst the middle class around the world. There is an aspirational aspect of it, and we have been through the phase of conspicuous consumption, and it has been stamped out. It is great to have a washing machine, a drier, and a dishwasher. It is nice to have a bigger tv, the latest phone, your favorite pair of sneakers, the brand you see your favorite artist wearing, so there is a place where that aspiration can head, but the key thing is not heading into Old Technology or the old investment sectors, and not necessarily towards stateowned enterprises. Some are calling for caution when it comes to this drive yourds em classes youd do agree there should be room for preparation for a correction . Only em,n em not but equities globally. Andgs are quite well valued there is low volatility, but over all, if people are selective rather than index oriented, there are good opportunities still. The same for fixed income. Especially asia credit. That is something people have been looking at for a while. Isnt that getting crowded . Doesnt it worry you with a rising Interest Rate environment with dollardenominated debt abroad that that has implications for credit . Is a component of the analysis people in people are looking at asia credit, they are looking at corporate, saying where are the corporates exposed, are they trading with the u. S. , with europe . David there is a great deal of local looking at thee broadening of the asian fixed income markets generally, and that is something we are excited about. To have thath stability, and it is always about liquidity and depth in em. Stay with us. We will be looking ahead to that one belt, one road program. China looking to cement its future, and the nations biggest cement maker sees big opportunities. We will hear from the chairman next. This is bloomberg. We are taking an indepth look at chinas economic plan to revive the old silk road, called one belt, one road, and willnments and officials meet to discuss how to push the projects ahead. Rishaad our very own steve engle speaking with the worlds biggest cement company, bedding big betting big on this program success. He has built 312 reduction lines in the belt and road region of the past 10 years, making up 65 of the overseas market. Road nations will have an norm us demand for cement as they embark on infrastructure construction. Demand for cement as they embark on if a structure construction. The number will be astronomical. The material industry will start off before the others in the belt and road initiative. If you want to get rich, held a road first. If you want to build a road, you need cement. In march 2015, you talked about foreign acquisition as a relates to one road, one built the what is planned and where . Cnbm has grown large through m as. On our expansion overseas, we m as first. I we would also like to accelerate pace. Familiar with investors as we have helped to build most of the cement factories in the region. We speed up under the one belt, one road initiative. Cnbm will hold up the winwin thinking when doing m a. We would not think only about our own interests, but those of our parties so both can be profitable. Of our partners, so both properties parties can be profitable. We just heard from one of chinas biggest cement makers. China presents it as a winwin, but will it create that stimulative catalyst for the silk road economies, or will they be stricken by corruption and instability that we have seen . Corruption,es over instability, over all of this involvement with state owned enterprises at the same time you are trying to see reforms going on, is a concern. Day, itnd of the adds to the mobility of people, mobility of resources, mobility of jobs and industry potential. The road is only good is what it connects, not just the initial jobs to create the roads, but what is it transport . Rishaad this is it. There are some many different aspects of this. Good to have be this infrastructure place in the longer term. In the buildup to it, well, Chinese Companies using chinese labor, so they are not benefiting the local economy at that point. Finance. Ishaad finance, and this not free money. You have to pay it back at some stage. Most of it is alone. A loan. Those economies and the overall drive to be successful would be that the silk road connects people to the chinese middle income consumer. If you think about what is going on in china, you are seeing challenges in the manufacturing space because it is cheaper to get your diapers from vietnam extent the so to the silk road enterprise actually preserves and create a benefit that allows people access to that Chinese Consumer and continues it down the road of becoming a more consumer driven economy come at that could be a real plus in this Infrastructure Project and is a great comparecontrast with infrastructure in the u. S. , which is talked about, needed for the same reasons, and now stalled. To the trump is looking infrastructure stimulus to help gdp growth. In to already trickled the emerging markets space, take a look at 7769, a broad story where em growth has been fairly resilient and has outperformed the developed market space. We have some risks out of the way, the french election, the korean election. What might you see as catalysts for developing markets in emerging markets going forward, and what would be the biggest risk in your view . Been fascinating in the most recent surveys we have done of asian investors at the beginning of this year, and also most recently did a review of global views. For years, it has been about the fed, u. S. Growth, china and the debt bubble. Every Client Survey we do and every conversation i have from dubai to hong kong to london or zurich is the geopolitical risks. At the same time, you see opportunities because it seems like there is another leg to. Row in dm and em you see people not wearing about the fed, about economics and a whirring about geopolitics. Do politicians mess things up because of way word policy choices, protectionism, or populism, or do you see geopolitical issues around syria and north korea . It is an interesting shift, and that is where we have to keep an eye out. Rishaad you dont mess in emerging markets without knowing about that risk, and that risk is why you have a discount in the first place. It is a nobrainer at the end of the day. There is always that worry. Emerging markets has always been a story of china and how is the u. S. Doing. There is a trickled through of how the performance goes come up but now the question on geopolitical goes, but now, questions on geopolitical risks, specially syria. Sophie we did have the firing of the fbi director comey, and it would put the leadership at loggerheads, so what might that mean for reforms and decisionmaking there, and how might that affect the macro picture . I am the least to claim being a political expert, but what you have to look at is first of all, you can see the market shrugged off that news interestingly. Did you see the u. S. Equity markets or the globe overnight have trauma question mark no. Trauma . No. Theou have to look at logjam and does a create an negotiationshe that have to happen on capitol hill to get infrastructure and tax reform done. Rishaad we are waiting for that. Final point, emerging markets versus s p etf trade . Walk us through this. This is showing strong gains. You are suggesting you by the emerging market etf and sell the s p one . You are saying people are doing both. Obviously people have been buying both. If you look at etf flows since the beginning of the year, 77 ahead of where they are running compared to last year. People are buying etfs for what ever exposure they want. Been tilted towards , and theytowards spy have been buying em. This comparison is useful, but is it about em versus i think its about about your about your equity allocation. Rishaad always a pleasure. Thank you for coming on. Oyota, ames for terri Second Annual decline in profit. Welcome back to bloomberg markets. Saying profit will decline for the second year in a row. Sophie what are we take a look at a wider picture. Corporate profits in japan have been suffering when it comes to sluggish sales, so what is the outlook here . , theecifically for toyota biggest businesses in the u. S. Japan is doing ok for them. Sales have been recovering somewhat, but still relatively smaller market. They make most of their money in the u. S. , and over there, sales have fallen in the last couple of months. Rishaad they want the only wants to see sales fall, were they . No, it is across the industry. The other thing we should mention is the switch to pick up trucks and suvs, where it is withfor toyota to compete americans, because they are wellknown for the big suvs, big , heavy duty pickup trucks. Sophie how can it entice customers more, incentives . Yeah, it will be tough. Toyota say they will control incentives, but if one cuts prices, they will have to follow. Rishaad i want to bring up a 8481. You look atcome if it against volkswagen, nissan, honda, all of those three are under book value. Toyota isnt. I think volkswagen is a good comparison to toyota, because both a very global. Even with theing, gm, for the top spot in global sales. Volkswagen has been down because of the diesel in emissions scandal. Toyota is actually coming back to the norms. If you look at the chart before to almost twoup times price the book, and it was of the weak yen, juicing up their profits and they are lower now. Rishaad thank you so much. Sophie coming up next, we are back at the World Economic forum. How saudi arabias answer to uber is expanding. This is bloomberg. Announcer from our studios in new york city, this is charlie rose. Charlie we begin with late breaking news from the white house. In a remarkable development, President Trump has fired fbi director james comey. The white house said that the president acted on the clear recommendations of both the Deputy Attorney general and attorney general jeff sessions. The sudden firing raises a host of questions, including whether the firing is an attempt by President Trump to influence the russian probe. It brings to an end what has been a turbulent year for the fbi chief and onetime career prosecutor. Here is a report from cbs