Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20170521 :

We have the world covered here on daybreak asia with the wrapup from the trade ministers meeting over the weekend. Help President Trump fared in riyadh shortly. This is daybreak asia. I am betty liu in new york. A. M. In just after 7 00 hong kong. Political risk will be dominating the headlines once again this week. The first leg of President Trumps middle east trip. It seems as so far so good, the opec meeting, the fed meeting this week, but plenty on investors place. Ceos like lots and lots of money being invested in their own home country, so pretty smooth sailing as you say, but there are still a lot of questions about the Political Risks. You saw Goldman Sachs taking down their target for the 2. 75 , ayield down to bearish a signal there. Markets have been choppy, but we have not seen total collapse. On jamesld depend comey when he testifies this weekend whether we get new information over the russian meddling scandal. See how things going. Asia kicking off so far, following the lead up from wall street on friday. We have erased some initial gains. , up. 2 . Minister saying opec is all on board when it comes to extending output cuts for nine months. Oil has already rallied more than 5 in the past few sessions. Futures up 26 points at the open in sydney. Japan, trade figures this hour, futures also pointing to some gains, but could be limited given the yen strength trickling through given north korea firing its eighth Ballistic Missile over the weekend, so something to watch. That is an early look at the region this morning. The sentiment so far has been beyondu need something the political noise to deter the balls from stock buying. You still have a strong Earnings Growth story, and Global Growth seems well intact. Betty thats right. The fundamentals looking good, although nothing changes the markets more than sentiment, right . Inn if the numbers come solid, but people are feeling as investors, they are little bit more nervous, then that can have a real world impact. As we talk about the markets, lets get some first word news. President trump has told arab leaders that the war on terrorism is not a fight between different faiths, easing concerns that america is at war with islam. Foraid they must not wait the u. S. , but in short terrorists find no sanctuary anywhere. The president has tried to ban people from various muslim majority countries from injuring the United States. When young muslim men and women should have a chance to build a new era of prosperity for themselves, it has to be done, and we have to let them do it. With gods help, this summit will mark the beginning of the end for those who practice terror and spread its vaio creed. Vile creed. Vows to continue its program after another test of the weekend with a missile traveling 500 kilometers across the sea of japan with defense official saying appeared as a shorter range weapon. North korea said it will continue to develop Nuclear Weapons and conduct more tests. Officially announces the first round of Capital Commitments for the Tech Investment Fund with more than 93 billion. The saudi public Investment Fund as well as apple, foxconn, and sharp are participating in the top 100und, expected to billion dollars and will focus on startups in the United States. Dimon remains optimistic about the Global Economy and the prospect of Regulatory Reform under trump. Exclusively with bloomberg, he said the imf feels the economy is growing faster than expected. Some of the guest of americas corporate names are in saudi arabia as the kingdom edges towards a more diversified economy. Growing more than in 15 years. Europe is doing rather well, all things considered. At 2 , is moving along give or take, so all that is pretty good. Even the imf is now saying the world will grow faster than expected. News 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Global trade and the threat of protectionism dominated talks in hanoi. A post summit statement was diluted, pressure on ministers not to criticize the protectionist trend. Lets get to our chief correspondent Haslinda Amin in hanoi for us. Good morning. It is interesting this water down communicate, that Team Following the g7 and the g20. You are right. The u. S. Pretty much topped the agenda and dictated the outcome, a diluted statement. Apec trade member servers pledged to remove barriers and regulations, but there was no mention whatsoever on resisting protectionism, and like you indicated, we saw this at the and g7 summit when secretary mnuchin refused to sign off on any strong wording resisting protectionism. It is suggesting that the u. S. Isrica first agenda dominating all talks on trade everywhere in the world. Newman of the hour is the , alltrade representative the trade ministers here at the aipac meeting wanted a bilateral meeting to get a gauge of what u. S. Trade policy will be with the respected countries in this part of the world trade dominated talk, but he apparently shares very little of what u. S. Trade policy would be ministers here could we spoke to get some clarity. Take a listen. Is everybody who wants clarity, what the u. S. Thinks about its trade policy. When they talk about the memorandum of the form, that were 20 countries that agreed, and one country that did not agree on anything. Intend todo you approach the u. S. For a meeting . Have they approached you . No. Haslinda your thoughts on trade under trump versus obama. There is a lot of u. S. Companies working in russia. Any pressureutting on those companies and they were doing business in russia and continue to do so, so we look at the economicsfrom and work with the companies. Haslinda countries are pulling back, the impact of that . All of the opec countries ths and work with the companies. Haslinda are supporting free trade and development and eliminating barriers. There was a strong position from china. Sense to does it make look east, the pivot to asia . We were working with Asian Countries before all these things happen it will continue to do so. We are intensifying our contacts with china, doing a great job in terms of improving trade relations with japan, and working with all the Asian Countries. It is always open. It is not us. It is the u. S. Haslinda what do you see as the biggest risks to Global Trading growth right now . The protectionism everybody was mentioning the story today, more barriers, higher tariffs supports all this stuff and will have a negative impact on growth. Trade is not growing that fast thise past year, so if negative trend continues, it will negatively impact Global Growth. A great interview, but what about clarity on u. S. Trade policy in asia and aipac . What did you get . Haslinda there is little clarity. There was some indications from the u. S. Issaying after free and fair trade. What that means, we dont really know, but the sense we get froms leaking to trade ministers here at apec is that it means what is free and fair to u. S. Industry. Essentially that translates to protectionism. Lighthizer did mention the u. S. Does have a big trade surplus, trade deficit, with a lot of countries in this part of the world, and that needs to be addressed. We spoke to the japanese trade minister to talk about what he hopes to achieve in the months to come. Take a listen. The tpp is the only agreement that has indepth coverage of things such as digital trade, intellectual property, customs procedures, and so forth. The tpp covers all these areas. It is highly regrettable that the u. S. Decided to withdraw, but even without the u. S. , trade remains hugely important. Tpp was also a key discussion point here. Apec ministers were also signatories on the tpp and decided to push ahead even without the u. S. , but challenges remain. Countries like malaysia say there could be some renegotiation because the reason why they signed up to tpp was greater access to the u. S. Market. Given that the u. S. Is no longer part of tpp, there is reason for them to consider. Thank you so much for that. In hanoi. Min looking ahead, counting down to the beginning of trade and the latest trade data out of japan. We will bring you those numbers of the cross to bloomberg later this hour. The former u. S. Ambassador to saudi arabia joins us to discuss the news from rihanna. Riyadh. This is bloomberg. Down toe are counting asias first major market open this morning. Higherfutures also following that strong lead on friday in new york. Toabout. 5 on the nikkei 25. This is daybreak asia. I am betty lou in new york. I am if unmanned and hong kong. The u. S. And saudi arabia have signed deals worth hundreds of billions of dollars during President Trumps visit. Walk us through all the cash involved here. Ramy it is a huge number. Seen donald trump tweet anything about these finances, but if he did, it would probably be in all caps, so big, so big lets listen to his own words first. Yesterday we signed historic agreements with the kingdom that will invest almost 400 alien dollars in our two countries and create many hundreds of thousands of jobs in america and saudi arabia. Ramy you can see that ornate there, about 50 u. S. Ceos and representatives of 40 Saudi Arabian Companies Come all part of the vision 2030, an attempt Itsaudi Arabia to modernize economy and diversify it self away from oil, especially with oil being so volatile these days. Lets look at some of these companies in focus in terms of the deals that have been done. You can see on the board, General Electric, dow, exxon mobil, and a plethora of defense companies, notably Lockheed Martin, raytheon, general dynamics. Up to belectric comes one of the biggest winners here, 15 billion in terms of improving saudi arabias power grid and energy capabilities. Of that is coming in terms of goods and services directly from General Electric. For theis a huge boom company there could Lockheed Martin is also a winner, six ian dollars in terms of building 150 100 50 black hop black hawk helicopters. Lockheed martin saying saudi arabia has expressed an interest in not just the 6 billion deal, but something four times more, 28 billion in terms of air and Defense Missile systems, combat shifts, and raytheon another one. Raytheon is saying it will not build anything, at least not yet, but will establish a new branch in saudi arabia called raytheon arabia. They will want to develop defense, aerospace come and security, and that will be based in riyadh. Companiese many that,g, but not only there is the largest weapons deal in u. S. History Rex Tillerson said 109 billion has been anchored in terms of tanks, fighter jets, combat shifts and thaad missile system. What is next for the president . Part one of a fivepart city or country trip. He moves west and gets over to jerusalem, israel, as well as the west bank. Why dont we throw up that map. That is a great way to illustrate what will be happening. He will be meeting Prime Minister Benjamin Netanyahu and the president of the Palestinian Authority, going to the western wall, and would be the first sitting u. S. President ever to go to the western wall. He will go into the church of the holy sepulcher, where jesus was buried and resurrected from that area. After may 24, rome and vatican city and meets pope francis here it you will remember that President Trump said the popes criticism of him trying to build , border wall was disgraceful so will he mend ties with the pope here . You can imagine that he might want to Say Something so direct to the pope, but then again he has set a lot of things, so may 25 goes to brussels where he visits the European Union headquarters, and he will have dinner with 20 heads of state to there. He has said that nato was obsolete, but last month, he said it is no longer obsolete, so changing tack their, and he in six trip insidiously at the gseven summit. Quite a trip. Thank you so much. One feature on the bloomberg we would like to bring to your attention is our interactive tv function. Yes, you can find it, type in tv to watch us live and see previous interviews and dive into any of the securities are bloomberg functions that we talk about. Pretty cool. You can become part of the conversation by sending us instant messages during our shows. This is for bloomberg subscribers only. Check it out at tv. This is bloomberg. Betty this is daybreak asia. I am betty liu in new york. Yvonne i am yvonne man in hong kong. All the Oil Producers on board for a ninemonth extension. Speaking to bloomberg in reality , khalid a. Alfalih said they wont pick up any slack from producers who dont agree to the limits. Have spoken or heard any country that is against the extension per se. Everybody once the extension because we realize we have not achieved our objective of bringing global inventories to the average. You concerned the market is pricing the production cuts in . Im not looking towards the market. Im not looking for a specific price. Looking for is in agreement, consensus coming clarity for the markets that we are steady as we go, committed to bringing inventories to the there is average, that a large group of producers, opec and nonopec, working together, and that should encourage investment. My objective clearly is clarity on where the market is going so that people invest. I am less concerned about prices and markets over the next 12 months than i am after three years come into this decade, short andies may be demand will be approaching 100 million barrels, and we have the annual decline that has taken place. Unless we invest and overcome with new,ne significant capacity coming in, we will face a shortage. We in saudi arabia dont want the market to be squeezed. I understand you are not targeting a price or want to talk about a price, but ive been covering opec for two decades, and shale producers are now part of the equation. Lets say your extensions dont have the effect longerterm, would you think of over pumping so the price goes down and you squeeze the americans out . Been part ofever the calculus. We never over pomp to squeeze anybody out. I think supply and demand need to balance, and we have said saudi arabia has Spare Capacity and opec will do what is necessary. Market was structured, was off with the diversions between supply and demand, and any opec action in 2014 would not have done the job with theof cutting, so restructuring of supplydemand trajectories that took place over the last two years, opec is now able to calibrate its supply with our partners from outside to bring the supplydemand balance together, bringing inventories down come and give clarity for investment to flow back into the industry. Again, that was the Saudi Energy Minister Khalid Alfalih with bloombergs francine lacqua. The latest check of headlines, subaru may make electric versions of existing models as it joins the drive towards batterypowered cars. Recordpany plans investment in r d and is considering putting a electric motors and current models instead of redesigning new ones. The ceo says that would let subaru capital rise capitalize on its repetition and eliminate the need to find a harder. Cathay pacific is to cut almost 600 staff and its biggest round of job losses in two decades. The South China Morning Post says 190 management positions are to go immediately, and another 400 nonmanagement roles cut by june. Cathay pacific is under pressure and cheaper chinese rivals middle east carriers expanding into asia and last year saw its first loss in eight years. Sharper may see its first profit in four years. It will pose earnings as much as 360 million this fiscal year. Topreport says sales could 19. 8 billion dollars, meaning a 10 gain from a year ago. Sharp is planning to apply for a really listing the Tokyo Stock Exchange as early as july. Plenty more to come on bloomberg television, the data out of the u. S. , home sales likely to show robust growth when they come out this week. We look at what investors should be watching in the days to come. This is bloomberg. Ive spent my life planting a sizesix, nonslip shoe into that door. On this side, i want my customers to relax and enjoy themselves. But these days its phones before forks. They want wifi out here. But behind that door, i need a private connection for my business. Wifi pro from comcast business. Public wifi for your customers. Private wifi for your business. Strong and secure. Good for a door. And a network. Comcast business. Built for security. Built for business. Yvonne 7 a. M. On this gloomy, rainy monday in hong kong. P. M. Sunday 7 30 evening in new york, friday markets ended up higher. , but netp almost 0. 7 loss after the big tumble beside market on the back of the coming regulation revelation. Comey revelation. Im betty liu in new york. Yvonne i am yvonne man in hong kong. Now to first word news with stephen engle. Stephen the south korean president has nominated a finance minister and deputy Prime Minister. He is the former chief of government policy coordination, faces but host of challenges including household debt, high youth unemployment and weak domestic demand. At talks inatement hanoi suggesting pressure behind the scenes to avoid criticism of protectionism. Regulation and red tape and contrasts with their september meeting in peru when they had the d