Awaiting in a valley a valuation for aramco. Branch toall of business. The u. K. Prime minister is set to office tax cuts when he speaks at the cbi annual conference and we are live at the event. A ban onng court rules facemasks is unconstitutional. The hang seng trades higher. Good morning, everyone. I am live from the cbi annual conference. And interestingly enough, this is the first time great to have you back, this is a percent they have been holding their annual conference in the midst of an election campaign. A lot of Political Uncertainty is hanging over this. The election will take place on december 12. We are used to holding it amidst the uncertainty of brexit. Boris johnson will be here later on perhaps offering and all of branch to business. Talking about property and r d. And in with that comes his deal on brexit. And on the other side, we have sir Jeremy Corbyn from the labour party who will also a here. He will be talking about taxation and adult education. Leaders attending here will be listening to all of them. Also other parties will be represented. We will be speaking with Jeremy Corbyn early on. Early afternoon u. K. Time. We will be talking about his radical program and he wants to be the next Prime Minister. He has a radical Program Including an expanded nationalized program that shook the u. K. Community here at the end of last week. Matt as we get ready for european trading in less than half an hour, i wanted to show you quickly a globe a chart of global pmi. The u. S. Is in purple. You also have in white, china. Blue, japan. These pmis are all under 50. Manufacturers around the world are in contraction. That is interesting to keep in mind as we see new records being made every week it seems for the s p 500. Look at the futures in terms of the equity trade. In europe, in fact across the globe, we dont see a lot of movement for futures that we do see green arrows. Dacurope, 0. 1 gains on the and ftse futures. And a new record on friday for the s p 500 closing. 3120. As if he futures, nasdaq futures gaining. Bullish even with the Global Manufacturing contraction. It does get to mark cudmore right now. He is the managing editor of the log in singapore. What do you make of this . New highs every week for stocks and an alltime record when it looks like the Global Economy really is contracting and getting closer and closer to a recession even as the data officially avoids that term. Mark absolutely. I hate to break it to you but we did address this last week on the program. I wrote a piece that Global Growth is not big key issue driving stocks. The Global Economy is in trouble. Than mostworried about the Global Economy and i still think the u. S. Is at risk of recession next year but overall, i think the s p 500 will drive higher. One reason is that we are seeing liquidity pumping into the system again. All of the Central Banks are pumping liquidity back into the system at a very aggressive pace. At the fastest these in aggregate since december of last year. Passed that the fed is past the easing cycle. Overall, we are not seeing the scheduled risk events that will derail this. We have momentum. Traders do not Like Fighting the trend for good reason. And there is a bit of a fear of missing out going into the market. The global risk on rally and the isities rally to year end sustainable. Even though the Growth Outlook is dire, yes. Anna good morning to you. I thought your team writing about those central bank talent sheets was really interesting stuff. Let me ask you about a lack of volatility in markets. It is something we have addressed recently. Barring 2017, the s p daily swings are now their smallest since 1993. When we low volatility seemingly have a long list of uncertainties . Mark again, it goes back to the liquidity issue. Until 2017, Central Banks were pumping in liquidity into the system. 2018 therentil early was a nonstop addition of liquidity into the system. That he doubt in march of 2018 which is why that year was so volatile. Haveyear, Central Banks been putting liquidity back into the system. Especially in the last month. Again. That will squash and we have seen some easing of interest rates. Banks are prepared to cut rates further. Switching back to quantitative easing. That also helps to lower volatility across assets. Matt you asking the question on the blog how will aramcos ipo affect other assets . Basicallyo me like what the saudis are doing is all of those billionaires who were treated to an extended stay at the ritzcarlton, they will be called to the table for money. Are goingthe saudis to let their bank extend even more credit to locals to raise money from a small stake scale and the grand scheme of things. What is your take on the saudi aramco ipo . Mark a bit of a split view. Small stake. This is why some people are saying this is a very hyped story that is irrelevant. Many have been quite negative on this. That there was an excessive valuation. Another sign like the big ipos or possible ipos that have failed this year including the wework one that failed. Others think the signaling is very important. It could encourage opec to continue to prop of the oil price because they want to have it high before they sell a much larger chunk of aramco. A small stakeh and increase it over time. And then there is also a signal for other countries and what they might do with their state oil companies. My colleague pointed out that malaysia is considering selling part of its state owned oil company. They will play this over a long period of time. More of different micro signals. That is a big takeaway. Anna 1. 5 is not much of a free flow. You do wonder how this trend towards missing the giant oil companies, how that rubs up against Climate Change and shifting mandates of investors. Thank you very much, mark cudmore. Firstget to the bloomberg word news from leeann garris in london. Unrest is escalating in hong kong. Police have closed the harbor tunnel as officers moved to clear protesters from the university there. Afterwas seen billowing multiple fires on the campus. Officials have warned that police may use live at rounds if the situation continues. The British Royal family is suffering another Public Relations disaster this over Prince Andrews attempt to explain away his relationship with the pedophile, the late jeffrey epstein. Why did he decide to talk to the bbc . The prince denied sleeping with virginia roberts. In london, house prices resumed their downward slide in november. An average of just over 600,000 pounds. Listings were down 27 . Another sign that political turmoil is hitting the uks housing market. Global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna . Matt . Up next, saudi oil we continue to talk about the kingdoms cut in valuations for aramco. Their push to get the ipo done. When of the Biggest Companies in the world with one of the smallest free flows you will ever see in terms of percentage terms. And remember, Bloomberg Radio is live on your mobile device or on digital if you are in the london area. Do turn in. This is bloomberg. Anna welcome back to the european open. 15 minutes to go until the start of cash equity trading for the week. Markets are expected to go tentatively higher. Itsi arabia has cut valuation target and is now seeking between 1. 6 trillion and 1. 7 trillion. It is down from a previous goal of 2 million. The free flow just 1. 5 . Then aboute learned the valuations and expectations there . This is a much more scaled back idea than the one we initially expected it to be. So far, the focus will be exclusively on the stock market in saudi arabia. The shares will not be marketed canada, or even japan. It will mostly be saudi and gulf investors and International Investors that could get into the market through qualified institutions within the country. The ipo is very much different from what many people expected it to be. Debutld be a aramcos internationally. A lot of cornerstones from around the globe. The prospectus did not come out with or name any cornerstone investors for the ipo which is usually what happens at this stage of the ipo. Instead, we are all indications show it will mostly local that will work. For hat does this mean what does this valuation mean for aramco and saudi arabias Development Plans . I suppose it is not much lower in terms it is still a gigantic number. Massive compared to almost any other company in the world. But it is a rare amount lower than the 2 trillion that nbs was hoping for. Nab it is substantially lower than the 2 trillion. Suspect of already aramco being able to achieve that number. Ouroes come above understanding of what International Investors believed the value is which was closer to 1. 5 billion and even lower. Of princecornerstone mohammed vision to transform the saudi economy away from the reliance on oil. In this way, investors and economists believe how the proceeds are used will determine the success of the impact of the ipo on the saudi economy. Thank you so much for joining us. Our gulf economy reporter talking about the aramco valuation and ipo prep. Breaking news, speaking of really exchanges, trading in stocks. The Swiss Exchange is announcing an all cash tender offer for bulsa e mercados. They have been wanting to purchase an eubased exchange in case there were bigger on swisswith the ban docs and trading swiss sto cks in the eu and it worsened. It looks like there is an all cash offer for bme, we will bring you the news or more news as the developing story headlines are spit out across the wire. Anna . Anna let us get to hong kong now for the ongoing story. A court has ruled the government the and on facemasks is unconstitutional. This comes as unrest continues in the city after a weekend of violent standoff between police and protesters. Emily lau spoke with bloombergs Stephen Engle in the wake of the latest conflict. The Hong Kong Government which of course is under complete order from the chinese president they have to respond to the peoples demand. If you look at turmoil elsewhere within an and bolivia, few days or weeks, they responded. So they have to. We are not asking for a resolution or independence. We just want an independent commission of inquiry. Now is jodig us schneider. Good morning. What is the latest situation on the ground . Standoff a tense between police and students. What has been happening . Jodi there has been a tense standoff at the polytechnic university. That is where we saw the violent clashes over the weekend. Students and protesters remained holed up there. The police came in this morning giving orders to disperse. In some cases they said they would start firing shots but the government said it was not a removal operation. That is not what was happening there. Be what weues to still see there. We dont know how that will end. There were some demonstrations at lunchtime in the financial hub. We saw that all last week. It really was centered though at the university today. Canceledntinue to be in hong kong as we saw yet another weekend of this violence. Matt jodi, anna thank you very much, Jodi Schneider for that up a. We are minutes away from the opening of the session. We take a look at the stocks on the move and those we will be watching out for including bme after the Swiss Stock Exchange has announced an offer. This is bloomberg. Matt just about six minutes to go until stocks start trading across europe. News from your stock the equity team. Focusing on bme, bolsas y mercados. Covering u. K. Home owners homebuilders. What is the developing story on bme . We are focusing on bolsas y mercados. We have confirmed this morning that they are in talks with the Swiss Stock Exchange over a possible acquisition. They say this may not lead to a final offer but it is confirming that they are analyzing bme. There was an offer made for 54 euros per share on bme. Let us see how that will develop in the next few days. Earlier this morning, i was speaking with investors. Intobelieve this will feed bigger competitors. , meanwhile, has been suspended here in madrid trading. Anna what is the story for the other stock . They had a Trading Update this morning and the focus was on the hearing aid maker. And the buyback program. They had to, suspend it because of a cyber attack. They were targeting 1. 2 billion krone. It is seen as a positive. Matt what is the story on u. K. House builders . Data came out over the weekend showing the asking price in london fell back by about a percent. It will be under pressure in todays trading. Anna we will be watching out for that. Thank you to all for the updates. You can check out the stock stories that we are following on first go on your bloomberg. This is bloomberg. Anna a minute to go until the start of the cash equity trading this monday morning. Good morning. Let us get to the European Market open. A positive set up so far especially when we look at the asian trading session. Up 0. 3 . The weekendna over during some concerns about the trade deal but the real support s pia sessions today 500, it has gotten a big boost with more traders coming back to the market after the s p market closed with yet another game. Futures, not as positive in europe as in asia. There is not that positive lift from hong kong. They will need Something Else but it has been clear that Central Banks continue to support markets. Four seconds until the open. In the u. K. , watching the pound which has been strong today. Up about 0. 5 . Boris johnson saying the conservatives are supporting his rice it plan if he wins the election. A lot has to do with the sterling affect. The strong currency means a relatively flat market. Spain is likely to be strong today with the bidding war with the bme. We are also rounding out the earnings season. Dividend players are under pressure. Weaker today. A flat market. The ibex only up 0. 1 . Is no longer suspended, we mays the a change there. Let us look at what some of these individual sectors are doing. U. K. Property buyers are likely to be under pressure today though we are seeing maybe some weakness. Apple came out with some positive data suggesting the apple suppliers are not picking up on that. Energy also under pressure. Much underipo is that 2 trillion market cap it was looking for. Health care tends to be one of the stronger sessions year to date. Staples looking spotty. Overall, the market seems to be flat. Matt, are you seeing any movement on the individual names . Matt 21 in terms of winners to losers. 400 stocks are up. 200 down. In terms of who is adding the most points, astrazeneca, roche on top. Bayer as well. Health cares docs giving the most Health Care Stocks giving the most lift to the stoxx 600. If you look if you look at the individual movers in terms of percentage changes, demant and homemakers like beasley on top. Unilever, s down. British american tobacco. The more defensive stocks are taking the most points away from the stoxx 600 index or holding it back from further gains. Also have total and bmp on prices that are falling. The defensive stocks in the Oil Producers are holding us back from bigger gains. Anna . , let us put this in perspective and talk about the Global Growth story. Opening equity markets higher as investors wait for new developments on the u. S. China trade talks. Constructive discussions were held over the weekend. Joining us now to discuss is salman ahmed from Lombard Odier. Good to talk with you. We are trading around these scraps of information. There was optimism and volatility around the trade narrative. Where are we on Global Growth . We spoke to our colleague earlier about where this story is going and why it was not necessarily all markets were focused on at this point. Salman if you look at the data, the hard court data coming out, there is some degree of stabilization coming through. And you are right, i think the market has moved away from spot data and is focusing on expectations. That is where the u. S. Trade developments have been critical. What we have seen since the q1 of 2018 is a sharp fall in global. That is where the market is focusing on in the sense that if there is a phase one deal, it may stabilize global and that could help Global Growth going forward. There is some sense of stabilization but it is not the prices weify are seeing in cyclicals. Matt Central Banks around the world seem to be going back to asset purchases. We have the ecb purchasing bonds. The u. S. , even if they do not want to call it quantitative easing, they are expanding their Balance Sheet again. Will this lead to more asset price insulation . Salman that is a good point. One inflation risk Central Banks are good at creating is asset price insulation. There was a uturn and then they ecb joined the party as well with more qe. Mr. Draghi left earlier this year. Real rate to have gone negative. If it were any other year, 2019 would be a recession year but because of the strong stimulus from the Central Banks, we have had a situation where the market knows very negative data which we saw for the first nine months and also ignored the escalation in the trade war. It has been supportive. And that is why i think in 2020, that will be an important