Transcripts For BLOOMBERG Bloomberg Markets Middle East 20170504

Investors are looking to an end of five years of declining revenue. Yousef also, Blackstone Group and cbc Capital Partners among the likely bidders for staying the emirates. This is Bloomberg Markets middle east. Manus i am shery ahn in hong kong. Let us take you to the markets right now because they are mostly in the red. We had japan closed on holiday but they are turning slightly more positive. Shery Industrial Metals just losing ground. In theighed on australia aussie dollar and australian stocks. Aussie dollar right now unchanged, but it was one of the worst g10 performers. Of course, just hit by that route in metals. Iron ore falling the most in three months in china. Yieldthrough the 10 year is losing ground. We have hsbc as well with firstquarter earnings out. Atre adjusted protect profit 5. 94 billion. That would be a beat of estimates because adjusted pretax profit was expected to we are hearing they came in at 5. 94 billion. Now, their Dividend Per Share is also at . 10, and of course, firstquarterts dividend that was maintained at . 51 per share. . 10e hearing that it is Dividend Per Share. Pretax profit beating estimates of 5. 94 billion, compared to the estimate of 5. 3 billion. Also, we have capital ratio as well at 14. 3 , which is higher than the First Quarter Fourth Quarter ratio. Waiting on the revenue. Bloomberg survey suggesting among analysts looking for a figure of 12. 6 billion. 9 decline. The profit number coming in precut profit of 5. 94 billion. That is a beat in terms of expectations. Onare looking for guidance possible further stock repurchases. If you look at what Deutsche Bank has been saying, a return to growth, that is what will be important. Theseld be telling you details. Have aof 30 analysts hold to you are looking at stocks having outperformed on a oneyear basis. At what theing stock has done compared to the ftse all share bank index. That underperformed. The hsbc firstquarter net at 6. 7 9ncome billion. That is the figure we were looking for there. Shery also slightly higher from 6. 9Net Interest Income, billion. 6. 79 billion. N at they will continue to remove low return riskweighted assets. Their costsaving Program Remains on track. Costsaving was one of those things we were expecting to keep coming down. Costs to keep coming down in the First Quarter. They were saying that costsaving Program Remains on track. Also reduction targets set in 2015 have been exceeded hear it again, Net Interest Income at 6. 79 billion. Also, their capital, firstyear ratio of 14. 3 , which is slightly higher than for the at 13. 6 . Arter we will have more details of hsbc. Right now, we are hearing from the ceo, saying this is is a good thing this is a good set of results. Yousef we have not heard anything about the size or tightening of any further stop purchases. You will recall that capital is being released from hsbc, shrinking u. S. Business. The expectation was that as much as 2 billion could come in the second half of the year. For now, let us cross to this part of the world, under two hours away from the emirates market. That is dubai and abu dhabi. Index. I here is the pulse, the beat, the melody. You can see Downside Pressure in line with what is happening in the oil prices. Really come around what is going on with activity and materials. Lots of Downside Pressure. We did see bright spots when it comes to industrial, when it comes to selective real estate stocks. We did see a major bright patch in egypt with capital inflows. Those gains reported. Some of the key risks we are watching for you on our risk radar. Copper. We spoke about what is happening in the metals complex. What is being factored in as what is happening with demand in china, concern about that. You look at what is happening on the supplyside side of the equation. Lots out there. Spread gcc bond spread over treasuries, shrinking just a little bit further. 1. 9 . South african rand holding relatively steady against the u. S. Dollar. Let us check in with the first word headlines from around the world. Here is deborah miao. Has attackedkel rising protectionism. Addressing the be 20 business arm of the g20, she said there may be shortterm benefits. Merkel did not name any Single Person or country but pointed to the difficulty of making progress at the g20. President trump won the white house, campaigning on the slogan america first. Russian president Vladimir Putin is pushing his plan to establish safe zones in syria, which may include an end to bombing raids. Deborah he held talks with erdogan in sochi. Thanks to the role of russia, turkey, and huron, it was possible not only to achieve a ceasefire between Syrian Government forces and armed opposition, but to bring them to the conference table in astana. Talks,ay of the astana we are trying to reach the goal asfortifying the ceasefire soon as possible, but something was are spending their time trying to sabotage the process. We know very well what those elements are doing to provoke the field and to eliminate the green buds of hope. The most obvious example is a chemical attack. Deborah the two leaders made progress on ending a trade standoff to list sanctions. Tomatoesons on turkish are inspected to last for three to five years. Peace in the beer purity government have agreed to thee state institutions and army under civilian leadership. This came after talks in abu dhabi. They also agreed to jointly fight terrorism. After l into turmoil was toppled. An independent report says the u. K. May have to accept the Free Movement of people from the European Union for years because introducing controls will be too complex. The institute for government think tank says successful implementation of new immigration laws by the 2019 exit deadline is unfeasible. Thousands of new Civil Servants would be needed to deal with residency applications. Global news, 20 four hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im deborah mal. This is bloomberg. Yousef just a reminder that we will be speaking to the cfo of hsbc to shed further light on the latest figures. The ceo. A good set of results. You can follow in on the blog for insight. Let us get to the cio of falcon private bank. There is a conversation to be had about what went on at the fomc. Great to have you on the program. Not very exciting, arguably. When is it ever from the fed . When it comes to the fed funds and what is expected, you can see at the moment that that funds are pricing in just one more height in 2017. Let us get your topline read out of this statement. Guest it seems we are at an equilibrium state with expectations on interest rates. I think we saw, you know, potential further rate increases lead to reduction in auto sales. We saw a little bit of a disappointment last week and i think the fed is cognizant that fast,y go too far, too they could jeopardize further expansion of the u. S. Economy. Therehat said, we think is a broad resilient recovery that remains underway. Yeah, let us get the latest lines out of hsbc one more time, because they are saying that incremental savings have been realized. 0. 4 billion. They were realized in the First Quarter of 2017. Now, remember, the adjusted pretax has beat expectations. We have not yet heard of any new buybacks, but of course, continuing the conversation on the fed, hsbc of course, from the european perspective, is one of the most geared global lead to interestrate rises, and the yield curve has flattened, and they hope when it comes to the Banking Sector in europe and the rest of the world, how much will this fed rate hike go in for this year affect their bottom line and their margin . David the rate hike in the u. S. Is as we said, telegraph and expected. It cannot be absorbed too much too fast. U. S. Economy, global economy, is moving towards synchronized expansion. The asian markets are potentially starting to discount aroundce in sanctions korea and other markets, so there is potentially Slower Growth being built into the asian markets, but we think europe is now going through a recovery. It has dismissed the notion of the french exits, and we still remain optimistic that economic expansion would be continuing globally. Yousef what some of us were hoping to find in the fomc statement were any clues about the reduction of the balance sheet. We did not get any indication of what they are going to do with the 4. 5 trillion dollars of holdings. How do you expect that to pad out . What kind of real impact will that have . David they are going to slowly unwind that. They will not do it in a dramatic or aggressive way. Whatdo not want to disrupt was an effective program. With that said, we do think the probabilities of rates moving towards the upside is higher than moving to the downside. There is also discussion about issuing a 50 year bond the other day, and to us, and to most investors, that makes a tremendous it makes a lot of sense because the u. S. Has an enormous need to improve its infrastructure. For those of us that have traveled around the world, especially here in dubai, and you go back to the united states, it is clear, it is evident, it is really appalling how pathetic the infrastructure is. Offset a 50 year bond to an investment in a 50 year Infrastructure Improvement makes a lot of sense, so i would imagine, given where rates are, that they should go ahead and do that, issue longterm bonds and use the proceeds to further expand the quality of u. S. Of the structure. Yousef hold that thought. We have plenty to get through. David pinkerton. That us get you a little bit of a preview of what is to come. Joins us to mckay discuss the banks earnings beat your it is about half an hour from now. Shery the ugly mood in europe. The french president ial debate turned personal. David pinkerton stays with us and gives us his take, next. This is bloomberg. Shery this is Bloomberg Markets middle east. On bloomberg tv and radio. Im shery ahn in hong kong. Yousef i am yousef gamal eldin in dubai. Very quickly come hsbc now saying they are contemplating a share of buyback as and when appropriate. No figures on timing on size. And you are looking at Deutsche Bank, one point 5 billion of stock to be bought back in the second half. Up to 2 billion according to some estimates. Let us keep a close eye on that. Let us get back to david pinkerton, cio at a bank. Let us talk about what is happening in europe and the french election, specifically with the latest president ial debates. What were your Key Takeaways here . David it was clear after the first round of the election in that the market was relieved that le pen would not likely be the victor, and even now, she is kind of backing off with some of the comments she made previously of, you know, france leaving the that clearly,ink if the polls and the current baked in expectations are such prevail,macron will there will be sort of a slight rally, but most of that is baked in already. If she surprises the expectations and prevails, then that would be a more remarkable selloff, but you know, our expectation is that macron wins this sunday and we are off to a expansion for the european economy and equity confidence. Yousef what is this going to do to risk and risk spreads when you look at the key Asset Classes and mainland europe . We have seen the decline in volatility, moves in the spread between french and the bund. Mean, the european economy has kind of sort of failed to really thrive and catch up to the states of accelerated expansion the u. S. Is in. Most of that has been hampered by all of these Political Risks and uncertainties. As we clear through those uncertainties, we hope that european expansion will then be released from what has been you know, it has been captive to some of these Political Risk premiums. Once these are cleared, we think that equity market confidence will return. We have already seen a decline in the euro versus the dollar. Over a longer period of time. For exports,mulus especially on the german side, so we think that all of these things are boding well for european shares. Which trade at a relative discount to u. S. Shares, which we all know it has been well commented on that u. S. Shares of in the top decile historic valuations. It is becoming quite rich. Shery cap. Good thing yeah, good thing you mentioned that, because i do have a chart on the bloomberg. If you look at this chart, you can see that all major global segment out of the u. S. Are actually trading at a discount. Does this mean that you are very positive about european stocks and there is more room to run . U. S. well, shares in the and in switzerland, for example, always are trading at a premium relative to other markets. They are also, you know, it is hard to compare markets to markets because every index is not comprised of the same industries, so the u. S. Command a premium because it has a heavy technology component, higher growth element, and some of the emerging markets and european markets have commodityoriented heavy factors. So they deserve a discount. You know, the notion of a ketchup trade for europe is one that everyone has been waiting tchupr a long time cat trade for europe is one that everyone has been waiting for for a long time. It is a great market. Shery we have been hearing about that for a few years actually. Talk a little bit about what is happening when it comes to exit negotiations, because may has accused e. U. Officials of interfering with the u. K. Election. How bad could this get . Will brexit negotiations risk breaking down . Quickly. Great question. That is tough to gauge, tough to forecast. There are so many dynamics, a lot of political posturing going in. Publiclys you heard are for negotiation purposes probably. We think it will proceed in an orderly way to everyones best interests. Ascribe that to be a huge risk for european shares. Shery david, thank you so much for your time. David pinkerton, cio of a private bank. The gulf equity markets have been stepping up their gains to lure foreign investors. There is plenty of opportunity in alternative assets. That, next. This is bloomberg. Shery you are watching bloomberg. I am shery ahn in hong kong. Yousef i am yousef gamal eldin in dubai. Let us talk a little bit about International Interest in gulf markets. We have been covering it out of saudi arabia. Of alternativee Investment Opportunities in the region. That is rising, and that is key. Tracy alloway joins us on the line from abu dhabi with more on this. Good morning, tracy. Good morning, yousef. I know you are excited. There is a wealth of thertunities right now in gulf, penned to saudi arabia opening up its markets. Tracy who better to speak about that than the doctor, ceo of golf capital . He is a huge player. Joining uso much for today. Let us start with saudi arabia because we did have that rare interview from the deputy crown prince where he was talking about some of the countrys economic plans, including domestic investment, the privatization drive. What does that mean for Capital Markets in the gulf region . It is what you mean a huge boom. It will open the markets again. There has not been much activity for the past two years. Wereu look at 2014, there 12 ipos, 10 billion. Last year, only for ipos him a 7 million trade. The ipo market are shot. Ipo like saudi aramco to open the market again. Tracy what about the dip in oil prices . We saw another fall yesterday off of the back of some of the u. S. Numbers. How do lower crude prices actually impact the private equity market in the gulf . To be honest, that is an opportunity for us here at with the drop in oil prices, valuations are coming down. Banks have we control the vacuum and provide Growth Capital or the liquidity. Tracy it is an opportunity because of growth, but when you talk to potential investors, what sort of concerns do they have about the region at the moment . Karim definitely the region is affected by the drop in oil prices. The gdp growth rate is going to drop, but with the governments are doing very well are diversifying, so you take the uae. 10years ago, it was 40 . Saudi as well. Them introducing taxation, doing the things necessary to balance the budget and keep on the growth coming. Tracy if we assume gulf countries, gulf markets are become really an investment destination thanks to this evolution, this opening up, where do you see the biggest opportunities, and could you start new funds to take advantage of the opportunities . Karim a huge opportunity today in the gulf as a consumer. We have the youngest population in the world and a very high gdp per capita. These consumers are spending a lot of money, so we follow the consumer. Anything that has to do with food, health care, education, these are very exciting sectors. Ecommerce. Early days. We have the highest penetration in the world, very high internet penetration, social media adoption, yet ecommerce is one of the lowest in the world. I think ecommerce account to only 0. 7 of gdp versus 3 for global outreach. There is going to be an explosion in ecommerce and we want to be invested in that sector. Tracy let me broaden it out for asecond because we did see giant of the industry say that politics is making the job of investing much more difficult. There is so much political uncertainty. Is that a problem for you as well . Karim if you look at the case of the u. K. , investors want stability and predictability. What the u. K. Have gone through is anything but that. Been regime change, currency collapse, dropping growth. That is making emerging markets look very good. I would rather be here in the gulf with stable leadership and growth, essentially. It is a good time to be in the gulf today. Tracy all right, thank you so much for joining us today. That was the ceo ulf capitalital g telling us about the opportunities the company is currently interested in. Shery it is 12 30 p. M. In hong kong. 12 30 a. M. In washington. I am debra mao and these are the first word headlines around the world. The french president ial tvction turned nasty as the debate thought the candidates on the attack. Mcgrawhill hit back, saying Marine Le Pen was unfit for power. Cron spokeives ma unassisted. President trump met the Palestinian Authority president at the white house. Worried about peace with israel on a two state solution. Mr. President , our strategic option, our strategic choice is to bring about peace based on the vision of the two states. The palestinians eight with its capital of East Jerusalem that lived in peace and stability with the state of israel based on the borders of 1967. Debra he called for a piece that is just and comprehensive. President trump says he believes abbas is the president leader who can get a deal done. I will do whatever is necessary to facilitate the agreement to mediate, arbitrate, anything they would like to do. Mediator or to be a arbitrator or facilitator and we will get this done. Tora foreign reserves rose 20. 6 billion at the end of april, edging up from march. Reserves have climbed since the imf agreed in november to a 12 billion threeyear loan. Egypt tries to lure back foreign capital. The company had 36 billion in reserves before the uprising scared away tourists and foreign investors. If im in the ministers if finance minister want to boost growth in an inclusive way. African summit, he said calls to nationalize banks made by one of his advisors do not reflect his administration cautious stance. He also says he wants to rebuild confidence in south africas economy. Our policyrica is is the South African government. [indiscernible] voicese will be various and those voices do not reflect the opinions of government. Global news, 24 debra debra hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am deborah mao, this is bloomberg. I am debra mao, this is bloomberg. Shery joining us now from the bank, is the ceo of ego one of nigerias biggest listed companies. Thank you so much for joining us. We have to point out the fact that you have a tough year in 2016. Given the challenges. I want to ask about your capital adequacy ratios, especially pier 1 and total. Where are you at right now . Tier one and total. Where are you are right now . Thank you. It is the latest South African institution, not a nigerian bank. Coveringank that is the oil in africa. Offices inee addition to four other locations around the world where we do business. It is why we have a big nigerian institution. Said, you asked the question about the ratio. We did put that out in the market. On a tear when business a t ier one business, we own it under the same. It is close to 17 . I think what we need to focus on are things that need to be resolved together with the management, the board, the shareholders, the regulators. Those things, we are taking into consideration and preparing for financials. We need to pay for it and look at the Business Opportunities an environment that we can execute again to be able to go to the theme of this economic forum. How do we move africa forward . Thank you. Shery you have been talking about consolidation the past couple of years, but we have seen little evidence of that happening. Why is that . Is that a move or drive you are going to pursue this year . It, when you look at we say consolidation, it means that we look at our business. We identify the core areas where we need to expand. We do not need to expand. We stop our expansion. Longere seen we are no opening across countries. We are trying to secure our foundation. Consolidation is securing our foundation, and doing business is where we feel comfortable. There are things we do not want from a Product Point of view, from a client point of view. There are things we want to do. Expanding in those things. We think the strategy we have is working. Hat will be businesses we will draw from those ones. It is possible that a Branch Network will reduce those Things Network that is what we call consolidation. If at the end of the day, [indiscernible] ade we will work with the countries that are not profitable. If we need to work with the country in the future, we will do that. We do not do that. We believe that consolidation is making sure we secure our foundation. Yousef absolutely. Let me pick up on what you said in terms of what is happening in nigeria. We put this up on the chart in terms of bad loans because that situation is one that a lot of analysts are watching very carefully. You can see in the purple line, that is your nonperforming loans to total gross loans. That is the line and purple. We also added the line in white, the Nigeria Banking ratios and malones to deposit. And the line in blue. Purple line you are closing 74 branches. How is the story in nigeria going to play out . How much faith do you really have that this territory can add value to your company . Ok, again, if you look at it, we said we are going to digitize ourselves. Us very efficient. In terms of closing branches, what we are doing is substituting it for digital. We are expanding Digital Opportunities and reducing his opportunities. Our clients are predominantly moving towards connecting with us digitally. When you reduce those bank that is consolidation. We believe that if you look at the ratio we have, we think it is important to reflect the issue that looks at where the economy is today. And we have taken appropriate measures for exhibitions to that. If you go forward into the future, this is a very big economy. With over 80 million people. They are interacting and transacting. We want to be part of that solution. Yousef the nigerian currency, then if you are looking at a volatile currency, you would look at the algerian one. What do you think the central bank should do. Ade it is always easy to stand to bankand give advice governors on the seats. The position of the governor like every chief executive is a seat, not a sofa. Therefore, be given advice, we will have to give it privately to make sure we do not do the wrong thing. I think the government understand that has to be liquidity in the currency. There has to be inflow of liquidity in the system. And the naira has to reflect the ability of the country to actually do imports. My point of view, most of the advice we need to give to the regulators, we are giving them advice. We will not give that advice in public places. The challenge that the country 2016 was a reduction in the price of oil. Production to 1. 5 Million Barrels per day from 2. 2 at some point. Therefore they had to solve a difficult problem and i think they are navigating the right way to get to a good outcome. Shery just quickly, you have talked about reducing or dropping unprofitable businesses. What about buying assets to boost thrills . Moment, we do not intend to buy any new assets. We do not intend to buy a new assets at this point. Shery right. Ayeyemi, thank you so much for joining us. He is live from durban. Asia looking mixed. Juliette saly is here with that. Karim we are mostly juliette we are mostly lower apartment again. Im going to talk about why we are seeing this weakness the sweetness in asian markets. It is really to do with this you can see on the gmm, and that is commodities. You have seen copper fall the most since 2015. Its biggesting slump, down over 7. 5 , playing heavily into the resource markets in the region, like malaysia, which is down. 8 . Australias asx 200 down by. 5 . Commodities players feeling the heat. If you have a look at korea, this is a market that has continued to outshine. Very interesting fundamentals on the bloomberg showing that the 9. 5 run we are seeing in the kospi so far this year has further links to go because of go. Fact lengths to it is below the 50 average at the moment. Because the hitting a record high in intraday trade. That a switch that out and have a look at some of the other movies on the gmm, particularly in terms of the bond market. The fed coming to rather hawkish overnight. Further tightening in june has sent bond lower. At the treasury in the u. S. Falling and bonds in asia following suit. Japane not seen trade in today because of that Public Holiday continuing. Also worth noting, the Malaysian Ringgit coming off for the first time in seven sessions. This is about dollar strength, although there was some signals the Malaysian Ringgit was overbought. That is have a look at some of the stocks we are following in the region today. Particularly, in terms of the slump you have seen in iron ore. Fortescue metagroup metals group. Hsbc opening in hong kong. It could signal downward pressure because it seems investors are upset there was not announced a further by back from hsbc. Amorepacific in korea showing a significant rally. Equities booking that downward trend we have seen across most of the rest of the region. Yeah, juliette, thank you so much. Let us get a quick check of the latest business flash headlines read barclays has completed the sale of this egyptian unit to a bank. The 1500 employees and 56 branches in cities such as alexandria, and have been transferred to the moroccanowned bank. It has been in egypt since 1864 and it was valued by some at half 1 billion. Barclays recently reported First Quarter profits that more than doubled year on year. Yousef in an effort to boost saudi arabias fannie mae equivalent has started approaching banks to buy their portfolios. We will have about 1. 3 billion of its own capital and will work with the governments Investment Fund to invest another 1. 3 billion. Saudi arabia has one of the world lowest mortgage penetration rates. Shery Kuwait Energy is planning an ipo that would make it the First Company from the nation to list on the London Stock Exchange through the firm hopes million. About 150 the filing says shares should start trading sometime next month. In a note to clients, they said the ipo would be a tough sell in the current market. Considering the risks in companies where countries where Kuwait Energy operates. Qatarbased phone carrier says it has no plans to expand through telecom our deputy ceo told us the company is considering purchases in Tech Services and a deal for Technology May close in the second quarter. You recall the past decade where it has served 150 million customers. Shery coming up, more on the hsbc numbers. We will be joined by the cfo, ian mccain. That is next. This is bloomberg. Shery you are watching bloomberg. I am shery ahn in hong kong. Yousef i am yousef gamal eldin in dubai. Big day for earnings. Nina Region Energy giant. They produced, naturalt, and refine gas. It looks like a strong return to profit. Net income for the First Quarter coming in at 1. 1 billion. The estimate was for 736 million, so a sizable beat on that front. The adjusted pretax came in at three . 3 billion. This is a company, you know yeartodate interesting how analysts are set on this. 18 by. 13,000 in terms of how does has a spread. Then again with the recovering oil prices, we are seeing of course some of that reflected in those numbers, and we will continue to digest that. Shery of course, we are also watching hsbc, which gained half a percent in morning trading here in hong kong. We have their latest earnings. First Quarter Results in fact, their First Quarter profit, surprise on the upside. Their adjusted pretax profit, which of course excludes they rose to 5. 94 billion from 5. 3 billion a year earlier. That is a beat on the estimate. Estimatingr analysts it would come in at 520 billion, but this was a surprise increase in First Quarter profit. 5. 94 billion. Of course, this coming at a time when hsbc has a lot of challenges. 100 businesses in 18 countries. Somef and is looking at of the reactions we are seeing out there. Put out new called on hsbc based on todays results. Ultimately, what they wanted to see with guidance and clear indicators about what they are going to do with a possible stock repurchase program. Again, as much as 1. 5 billion was what Deutsche Bank was looking forward for the second half of the year. Hsbc, you are looking at interesting changes on an executive level because the ceo, Stuart Gulliver, may be on its on al fullyear battle to restore growth and meet analyst expectations. If you look at what happened to revenue, 20 billion since he started in 2011. He started over 100 businesses. You can continue to see details emerging. There is no mention of brexit. I find this fascinating. 30 paid earnings dossier, not one mention of brexit to investors and analysts. You can follow more details, more insights, on the top five top livn, where im function. Linesle of additional coming in from the Norwegian Oil giants, specifically as to their guidance, so statoil maintaining 2017 organic guidance. 11 billion. They are seeing additional 1 billion in efficiency improvements in 2017. Some two key lines there. Forus cross over to anna more on these numbers from hsbc. Anna. Anna we are going to be speaking very shortly to the cfo of it as pc, it iain mackay cfo of hsbc, iain mackay. Not yet updating their cause as to how the market is going to perceive this. Is the market going to go with the beat on revenues and be encouraged by that were disappointed by what we are hearing about buybacks . Let us talk to the cfo of hsbc, who joins us now. Thank you very much for your time. You boosted revenues. Adjusted revenue tire. Many revenues hire. What is the positive surprise . Midterm for the Fourth Quarter of last year into the Fourth Quarter of this were encouraged by the fact that our three main global businesses delivered growth of 9 , which is a good or to the year. Adjusted profit moved forward by 12 over the same period last year, again encouraging. Focuscoming back to the in terms of delivering growth across the key markets. Asia is clearly really important for us. The u. K. Market continuing to build the mexican business. Good performance from the Canadian Business as all. Very much encouraged by Economic Activity we are seeing coming across the global businesses. Marshall banking, Global Banking markets. so youo you anna paint a strong overall picture. Some people were disappointed last year to see falling topline at hsbc. 2017, that pattern comes to an end . Iain i have to say, not being facetious for a moment, i would be a happy man if i did close out 2017 right now. We guided at the end of the year to see Revenue Growth over the course of 2017, and notwithstanding a very good start for the First Quarter, that is the guidance we are holding for the market as we move into discussions with investors over the course of the next few days. Anna can i ask about share buybacks . Some were disappointed not to see another by that today. What would you say to them . Last time we talked, you said the target if you are above that, you are well above that at 14. 3 . Why number cash right now . Anna we just finished iain we just finished a billion dollar buyback on the 12th of april. When you add that to what we did at the end of esther, that is 3. 5 billion. I would encourage investors. We are very happy with where we are from a Capital Position right now at 14. 3 . As we said, at the end of the year, our principal focus is taking our capital and putting it to work to grow the business is around the world. We are very strongly focused on maintaining and delivering dividends to our shareholders. Last year, we paid over 10 billion to our shareholders, which i think made us the thirdlargest dividend payers in the sector globally. We consider them from time to time as appropriate. We just finished one billion. We will have a check at the rest of the year develops. Anna you are taking a positive, use,h i understand a pa which i understand your date billion dollars could be freed up from the u. S. Business. How are we understanding the scale through 2017 . Thinkyou know, again, i we are making Good Progress in working through the restructuring of our u. S. Business. We completed it in 2016 successfully with no ejections from the federal no objections from the federal reserve. We will be looking to dividend some of our surplus capital in the u. S. That to the Holding Company in the u. K. And making that available for further deployment within the group possible return to shareholders. Right now, the guidance we ,rovided at the end of the year it is absolutely firm. Anna i want to turn to brexit. There is no mention it seems a brexit in the release today. I know you said you may need to to paris. Rom london from a finance management perspective, how are you planning for brexit. When do you have to put the contingency plans into practice . Iain absolutely consistent story, what you have heard from douglas, what you heard from Stuart Gulliver previously. We have a universal banking subsidiary based in france that has all the capabilities of our banking operations based in the united kingdom. Arises, we the need will have to deploy somewhere in the region about to 1000 employees, possibly into that French Business to scale up the thatrt, the requirements brexit may impose on us. We are in a very early stage in this. We have the capacity, the propensity, to phase that in overtime, given the platform we operationn the french area. Happy with where we are, absolutely no change on that front from our standpoint. It is early days from a a perspective. Anna pretty early days from a brexit perspective. Anna pretty early days. What kind of timeframe are you looking at . Iain we do not need to do it right now because of the strength of that french banking platform. Its propensity to serve customers across the four global businesses with the same capacity as our operations in the united kingdom. As we start to do business for our customers, as the limitations that brexit may impose become clear, then we will be able to scale the business in a progressive manner. That will develop, i suspect, over the next few years, but we have got started that process. We know what we have to do. We absolutely have to have a plan in place. It would be incorrect to say we are in the process of redeploying people at this point in time. Anna not in the process of redeploying right now. Seems indone well, it the Global Market business, keeping up in some cases with u. S. Peers who also had a good quarter. Is that sustainable . Wouldi think everybody say we always see volatility coming through the markets numbers. What we saw in terms of ficc First Quarter, we are very happy with that performance through the Global Banking markets business is an extremely strong quarter. Virtually every product line. Fxsaw volatility in the markets, down a little bit. Great, credit, all Global Banking, global liquidity, cash management, very strong performance. Very much ae are customer flow and transaction orientated, with less of a focus in terms of the trading activities day today. Very customer driven. We are encouraged by the numbers we saw coming out at the First Quarter, but we are always going to see volatility coming to the markets numbers. It is a good start to the year. The business is encouraged by that and folks will keep that momentum going. Thank you so much for your time this morning. Thank you so much for joining us, iain mackay, finance director at hsbc. Yousef. Yousef thanks, anna. To a busy morning, even more earnings this time from carlsberg. They are coming in with a bead on the First Quarter revenue line with 13. 70 billion danish krone. Dubai investment. That is all we have for this edition of Bloomberg Markets middle east. This is bloomberg. Anna french facebook. Macron and the penns bar in the only oneonone debate ahead of the french elections. The latest polls have macron winning with 67 of the vote. Manus some of europes Biggest Companies report. We break the numbers down. Anna fed unperturbed. The central bank leaves rates on turn unchanged. Table. Is on the anna