Transcripts For BLOOMBERG Bloomberg Markets Middle East 2017

Will be ok. It is 8 00 in the arab emirates. I 5 00 in london. Shery i am shery ahn in hong kong, where it is midday. Welcome to Bloomberg Markets middle east. You are seeing them reacting to a stronger u. S. Dollar, rising for a second consecutive session. People listened to john yellen, because people are reacting to that. This extends to gradually reduce the level of Monetary Policy support. Changes in Monetary Policy take time to work their way into the economy. Waiting too long to begin moving to the neutral rate could risk a nasty surprise down the road, because too much inflation, financial instability, or both. Shery the rate hikes is on schedule. This may increase over 40 now. Yousef this is about pricing pressures, and the fed pointing out some a district where there was an increase in inflation. Interesting for those smaller wall street bonuses, the rising costs of living in new york city will play a bigger role. This tells a little story of the fed. This is a chart can pull out on the bloomberg, 5603. You can see the cost of living down to the smallest level since 2013, rising 2. 1 in december from the same month in 2015. We saw a big increase in things like dining out, medical care and energy. The question becomes, our business is going to find ways to raise prices on the back of what looks like an improving economy, given the employment and population ratio . This is really critical. Labor markets as the fed points out were reported to be tight or tightening during that time. In the middle east under two hours away from the open. What are you watching . Yousef let a break this down. We have interesting moves in this part of the world. Look at what is happening in dubai. Aramark properties, they are really proving a bit of an upside into the equation. Also gains in abu dhabi, saudi arabia losses, down 0. 3 . The Oil Sentiment playing into that. Let it go across to egypt where we saw some interesting moves in global silicom holding. Turkish lira came out with a 3. 95, theing this First Quarter of 2017. A strengthening to 3. 75 by the end of 2017. Shery i am keeping an i on the japanese yen, because it is crawling back from the weekend he saw against the dollar. Let me check the markets of the how individual markets are trading in the asiapacific. Juliette saly has that. Juliette we are seeing mixed movement coming through across asia. It is interesting the comments from janet yellen, a few analysts including Mohamed Elerian saying is she looks more dovish, even though the market has been pricing in a likelihood of a rate hike in march. In hong kong, we are seeing weakness from the hang seng index up a couple of sessions from the gains we have been seeing. A little bit of a pullback in the energy space. We have seen crude and brent oil rebound from the 2. 7 slide during the wednesday session, but you are seeing Energy Players, the airlines really reacting of course to the best we had on the weaker oil price in wednesday. The shanghai, is pretty flat, and the yen is week against the dollar. We are seeing some nice upside on the nikkei, up 0. 8 , Energy Players rising. Southeast asia good. Jakarta is up for a second consecutive session after a week of losses. Thanks. Time to check in on first word headlines from around the world. Here is sophie. Sophie a korean court has rejected the request from this man, saying there is not enough evidence to detain him. He is accused of embezzlement and paying millions of dollars to a confidant in return for political influence. This includes two samsung affiliates. Has been warned its departure from the European Union will be challenging, and it must shed any allegiance it will be allowed to carry the best parts of the Single Market afterwards. The leading negotiator told the Guardian Newspaper that they will not punish written for its position, that they can enjoy all the cart. A la carte. There are further job losses for Deutsche Bank. Parts of the bank have been asked to identify the bottom 20 percent of performers for possible cuts. He also scrapped bonuses for top executives for a second Straight Year and slashed the competition for other senior employees. This is also af billionaire, shares at 16 up. The mumbaibased vendor is recovering from a low ratio. The Bank Reports Third Quarter have recovered from eight 10 day plunge in september. In september. Unge global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Shery thank you. Spike saw a spike after Janet Yellens talk. The stronger greenback could be a big risk for the emerging markets. The stronger dollar is the main risk for the economy and markets in 2017. Not only would it cost headwinds to growth and earnings, it would also fuel protectionist tendencies. Shery right. , the get the latest here maritalast ceo for the asset management. He breaks down the moves in the market. Thanks for joining us. The rising greenback, the u. S. Dollar, how much is a problem not only for the u. S. Economy but also the rest of the world . I think it is a huge issue because of course the outlook for Interest Rates in the u. S. Continues to look higher, and given what is happening in the rest of the world, we will see an increasing divergence between policy and the rest of the world. That will continue to put pressure on the u. S. Dollar. I think we will have the pain trade over the next two to three months, which will be the dollar strengthening against the other currencies. Yousef how realistic is that . You have donald trump coming in which does not favor a strong dollar, but few analysts pointed he might jump the gun in terms of verbal intervention. Everyone says, that will not happen. He did it 48 hours ago. Could he put a ceiling to the strength of the dollar . Tarek i and not sure about that. Job owning really worked in the currency market. Jaw boating hasnt really worked in the currency market. I think this will remain. The money flows into the u. S. Very strong, so the dollar will strengthen in the shortterm, and that will be difficult to mitigate. Yousef in terms of the impact on saudi arabia specifically, this is a great chart i have put together this morning for you. This shows the bank index in saudi arabia, and we have the line in blue, which is the u. S. 10 year treasury yield, and unconventional comparison, but still interesting here and there. We have earnings from this bank, the biggest listed company in saudi arabia, 11 of the saudi index. Amidst on net income revenue is this a sign of the bank being able to whether austerities . In fact, several banks have reported this last week, and the results in general have been slightly better than the consensus forecast. That has been a challenging time. The outlook i have to say is pretty good. Given the bank capital is about a third of the double index, that gives me hope this will be a related recently good year. Reasonably good year. Shery you can see after the financial crisis, the gulf region has performed pretty poorly, failing to rebound due to the volatility and oil prices with uncertainty over the past and reforms. Went and we expect it to catch up with the rest of the world . Towhen can we expect it catch up with the rest of the world . Tarek it will be difficult. Oil is a factor, we look for them to get to 60 over the next few months. That will be supporting prices, but to be honest, during this challenging time of reform, it will be difficult to see the markets substantially. The best Case Scenario is we get a little bit of capital appreciation, but the dividend yield is where you look to get returns. Yousef you are hanging around. We have plenty to get through. We will dies also into a conversation with the opec secretarygeneral on the program. And the Cartel Meeting in russia. Shery coming up next from china to south africa, a key concern among emerging markets is the rise of protectionism. And the risk of a trump presidency. This is bloomberg. This is certainly part of protectionism. So far the u. S. Government has not launched any censorship or control of the entertainment, but they have only done it to manufacturing and defense industries, but there are lettersmen writing saying there will be more examination and control of invest made to entertainment. That will be about protectionism in the u. S. The president elect said he would be bad for both it would be better for both parties. China is the most protectionist country of very large countries. They have high Tariff Barriers and very high nontariff trade barriers to commerce. So they talk much more about free trade than they actually practice. About the of concern noise about protectionism is it is coming out of the world like this economy, and should it materialize, you have undeveloped economies retaliate. They retaliate, we will have a situation where global trade declines. When global trade the kleins, you have rising antitrade moves with the middle east ceo of the management who is still with us. Are we getting ahead of ourselves . We have not heard anything concrete about the incoming u. S. Administration, or should we take serious those threats against the wtos, where do you stand . Trump president elect have made his views clear. A lot of people speculated that the candidate trump would be different to the president trump. So far we have not seen any evidence that is the case. So my real concern is in fact at least some of what president elect trump has indicated will translate into actual policy, and that is risky for the global trade situation, and also for the Global Economy in general. I am definitely concerned. Have jamiewe also just warning about what is happening in europe, and that there could be more discontent for populists across the continent. We have the ecb policy meeting. Investors are thinking it will be this news fast, more boring the better. The qe, do you expect continuation of that, or will there be pushed back from germany as we see inflation rising their . Tarek i think the ecb will be on hold for the foreseeable future, and that will create a problem as i indicated earlier in the currency markets. With u. S. Industry going up Interest Rates going up and the European Central bank staying put, that leads to a strengthening in the currency which will put more pressure on Global Economy in general. I think jamie dimons concerns are valid. They are increasingly popular amongst analysts and strategists, and there are concerns about the french and german elections later this year. Yousef the trump trends we saw emerging off of the back of the election are facing their first serious test, inauguration. Come inauguration. How much of this is present . Tarek very little is priced in, and we saw an initial rally for this recently, but if you look at what trump has indicated, he is going to be fairly proactive in terms of Economic Policy on day one. That gives the opportunity for the markets to continuously react. Yousef what about inflation . Before the break, you said i am concerned about inflation. The Inflation Numbers you are talking about, and what analysts are pricing in, are wrong. Tarek i am concerned it is sticky and structural. We have Inflation Numbers out from the u. S. Yesterday, and the headline inflation exceeded 2 since 2014 the first time. A lot of investors believe this could be transient, but i think it is structural. If you look at the Unemployment Rate in the u. S. , it is already fairly low. Donald trump has waltzed in and declared he will take more jobs than any other president. That is not what we need when Unemployment Rates are already low and wait pressures are increasing wage pressers are increasing. We have a pipeline in innovation, not just wages but health care, energy, so there are two or three major factors contributing to inflation that honestly speaking we have not had to worry about for several years. Shery inflation is a key issue when it comes to southeast asia. We are going to see the first intral banks sign on policy indonesia and malaysia. When it comes to emerging markets here in asia, what is your forecast for the central bank . Some people say they will have to follow the u. S. Tarek i think it is very likely that they will have to follow the u. S. For a couple of reasons, not least the fact that the asian economies are doing reasonably well. If the base Case Scenario is they continue to grow through 2017, that is the impact on exports and business generally in asia. I have reasonably optimistic on asia this year. Valuations remain attractive. The economies are in a good place. Gdp is strong, borrowing is low. For the chinese yuan, there is no basis coming from the trump administration. China does not look like it is proactively devaluing the yuan. Where will he go with that . Tarek china is a surprise continuously. Most analysts were concerned about china last year. They told good numbers on growth. The concern remains that this was a situation that is untenable in the longer term, but shorterterm, they can extend this reasonably strong growth. Yousef we will see how it plays off. Numerous asset management. All right, a preview of the plans to manage assets to seek higher returns. We can hear from the higher investment managing director. Yousef welcome back. You are watching bloomberg. Shery the Kuwait Investment authority is planning to manage more of its own asset, moving as much as 8 of allocation in house up from 1 or 2 . The managing director says the greater risk is needed to boost the current for the funds turning to private assets and infrastructure. I want to compare our returns the last 10 years. I dont think we could repeat this. That is why we want to do something different. That is why we are expanding in the infrastructure and the credit. I think we have to take more risk in order to maintain, maintain the returns. That is why three years ago, we start to invest in infrastructure in the u. K. , spain, australia. We invested around 3 billion in different sectors of infrastructure, and airports, seaports. This is a portfolio for our infrastructure. Reporter right now, it is difficult to find alpha. You are clearly looking for it. You are looking for it in infrastructure and credit. Where are you getting it today . Who is delivering that performance, what Asset Classes . Let me tell you what we are trying to do in the last three or five years. In the health, it is in the private and the credit. If you look for the s p the last 10 years compared to the risk related, you have to take more risk in order to make less especially in the public market. We have no choice, only to take more risk in order to maintain the returns. The election of donald trump actually changed the appetite for infrastructure. If you are trying to reinflate the u. S. By spending more, does it do the same for other countries . Bader the same is yet to be seen. This is the talks i have been. This is yet to be seen. This would not happen tomorrow. You would need a change in registration, so this will take longer. Reporter if the potential for policy change and Economic Growth to come with it to inspire or prompt you to allocate more geographically towards the u. S. . Bader if i look to the Global Economy, the u. S. Probably is ahead of everyone in terms of growth. Budget attitude after the election, the tax cuts, deregulation, this growthy will enhance the. Also what we have seen, fiscal starts to work. We have only seen monetary, but now fiscal starts to work. This is the Positive Side of that, the u. S. , and the Global Economy. Reporter are you taking money out of emerging markets or europe and reallocating to the u. S. Bader we still maintain the highest allocation to the u. S. Reporter how much what you add to that allocation, and how do you invest in the u. S. Right now . Different companies . Bader we are mainly in the public and in the private. In the last few years, we look into the west coast, to expand in the venture and startups. If what we try to check for longterm investments, you need to see that infrastructure. Otherwise there is no size. Yousef that is the Kuwait Investment managing authority davos. G in dallas still to come, could the World Largest petrochemical maker be on the hunt for extra credit . We have all the details next. 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. Are the first word headlines. Struggling airbag maker terracotta will takata will buy this after the they want to corporate restructuring. Shares are down. The key Safety Systems what them to oversee the turnaround. The company says the expert panel is still checking plans. All resumes gains after the biggest drop in more than a week. Stockpile of crude are reminding going down. Tremendous efforts to trim output. The International Energy agency is predicting a rebound in u. S. Shale output and oil prices to rise. The money markets are heading for a record. Chinas central bank cant 28 million to open Market Operations on thursday, taking big injections to more than 150 billion, unprecedented in weekly data going back to 2008. The purchase Bloomberg Markets<\/a> middle east. You are seeing them reacting to a stronger u. S. Dollar, rising for a second consecutive session. People listened to john yellen, because people are reacting to that. This extends to gradually reduce the level of Monetary Policy<\/a> support. Changes in Monetary Policy<\/a> take time to work their way into the economy. Waiting too long to begin moving to the neutral rate could risk a nasty surprise down the road, because too much inflation, financial instability, or both. Shery the rate hikes is on schedule. This may increase over 40 now. Yousef this is about pricing pressures, and the fed pointing out some a district where there was an increase in inflation. Interesting for those smaller wall street bonuses, the rising costs of living in new york city will play a bigger role. This tells a little story of the fed. This is a chart can pull out on the bloomberg, 5603. You can see the cost of living down to the smallest level since 2013, rising 2. 1 in december from the same month in 2015. We saw a big increase in things like dining out, medical care and energy. The question becomes, our business is going to find ways to raise prices on the back of what looks like an improving economy, given the employment and population ratio . This is really critical. Labor markets as the fed points out were reported to be tight or tightening during that time. In the middle east under two hours away from the open. What are you watching . Yousef let a break this down. We have interesting moves in this part of the world. Look at what is happening in dubai. Aramark properties, they are really proving a bit of an upside into the equation. Also gains in abu dhabi, saudi arabia losses, down 0. 3 . The Oil Sentiment<\/a> playing into that. Let it go across to egypt where we saw some interesting moves in global silicom holding. Turkish lira came out with a 3. 95, theing this First Quarter<\/a> of 2017. A strengthening to 3. 75 by the end of 2017. Shery i am keeping an i on the japanese yen, because it is crawling back from the weekend he saw against the dollar. Let me check the markets of the how individual markets are trading in the asiapacific. Juliette saly has that. Juliette we are seeing mixed movement coming through across asia. It is interesting the comments from janet yellen, a few analysts including Mohamed Elerian<\/a> saying is she looks more dovish, even though the market has been pricing in a likelihood of a rate hike in march. In hong kong, we are seeing weakness from the hang seng index up a couple of sessions from the gains we have been seeing. A little bit of a pullback in the energy space. We have seen crude and brent oil rebound from the 2. 7 slide during the wednesday session, but you are seeing Energy Players<\/a>, the airlines really reacting of course to the best we had on the weaker oil price in wednesday. The shanghai, is pretty flat, and the yen is week against the dollar. We are seeing some nice upside on the nikkei, up 0. 8 , Energy Players<\/a> rising. Southeast asia good. Jakarta is up for a second consecutive session after a week of losses. Thanks. Time to check in on first word headlines from around the world. Here is sophie. Sophie a korean court has rejected the request from this man, saying there is not enough evidence to detain him. He is accused of embezzlement and paying millions of dollars to a confidant in return for political influence. This includes two samsung affiliates. Has been warned its departure from the European Union<\/a> will be challenging, and it must shed any allegiance it will be allowed to carry the best parts of the Single Market<\/a> afterwards. The leading negotiator told the Guardian Newspaper<\/a> that they will not punish written for its position, that they can enjoy all the cart. A la carte. There are further job losses for Deutsche Bank<\/a>. Parts of the bank have been asked to identify the bottom 20 percent of performers for possible cuts. He also scrapped bonuses for top executives for a second Straight Year<\/a> and slashed the competition for other senior employees. This is also af billionaire, shares at 16 up. The mumbaibased vendor is recovering from a low ratio. The Bank Reports Third Quarter<\/a> have recovered from eight 10 day plunge in september. In september. Unge global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Shery thank you. Spike saw a spike after Janet Yellens<\/a> talk. The stronger greenback could be a big risk for the emerging markets. The stronger dollar is the main risk for the economy and markets in 2017. Not only would it cost headwinds to growth and earnings, it would also fuel protectionist tendencies. Shery right. , the get the latest here maritalast ceo for the asset management. He breaks down the moves in the market. Thanks for joining us. The rising greenback, the u. S. Dollar, how much is a problem not only for the u. S. Economy but also the rest of the world . I think it is a huge issue because of course the outlook for Interest Rates<\/a> in the u. S. Continues to look higher, and given what is happening in the rest of the world, we will see an increasing divergence between policy and the rest of the world. That will continue to put pressure on the u. S. Dollar. I think we will have the pain trade over the next two to three months, which will be the dollar strengthening against the other currencies. Yousef how realistic is that . You have donald trump coming in which does not favor a strong dollar, but few analysts pointed he might jump the gun in terms of verbal intervention. Everyone says, that will not happen. He did it 48 hours ago. Could he put a ceiling to the strength of the dollar . Tarek i and not sure about that. Job owning really worked in the currency market. Jaw boating hasnt really worked in the currency market. I think this will remain. The money flows into the u. S. Very strong, so the dollar will strengthen in the shortterm, and that will be difficult to mitigate. Yousef in terms of the impact on saudi arabia specifically, this is a great chart i have put together this morning for you. This shows the bank index in saudi arabia, and we have the line in blue, which is the u. S. 10 year treasury yield, and unconventional comparison, but still interesting here and there. We have earnings from this bank, the biggest listed company in saudi arabia, 11 of the saudi index. Amidst on net income revenue is this a sign of the bank being able to whether austerities . In fact, several banks have reported this last week, and the results in general have been slightly better than the consensus forecast. That has been a challenging time. The outlook i have to say is pretty good. Given the bank capital is about a third of the double index, that gives me hope this will be a related recently good year. Reasonably good year. Shery you can see after the financial crisis, the gulf region has performed pretty poorly, failing to rebound due to the volatility and oil prices with uncertainty over the past and reforms. Went and we expect it to catch up with the rest of the world . Towhen can we expect it catch up with the rest of the world . Tarek it will be difficult. Oil is a factor, we look for them to get to 60 over the next few months. That will be supporting prices, but to be honest, during this challenging time of reform, it will be difficult to see the markets substantially. The best Case Scenario<\/a> is we get a little bit of capital appreciation, but the dividend yield is where you look to get returns. Yousef you are hanging around. We have plenty to get through. We will dies also into a conversation with the opec secretarygeneral on the program. And the Cartel Meeting<\/a> in russia. Shery coming up next from china to south africa, a key concern among emerging markets is the rise of protectionism. And the risk of a trump presidency. This is bloomberg. This is certainly part of protectionism. So far the u. S. Government has not launched any censorship or control of the entertainment, but they have only done it to manufacturing and defense industries, but there are lettersmen writing saying there will be more examination and control of invest made to entertainment. That will be about protectionism in the u. S. The president elect said he would be bad for both it would be better for both parties. China is the most protectionist country of very large countries. They have high Tariff Barriers<\/a> and very high nontariff trade barriers to commerce. So they talk much more about free trade than they actually practice. About the of concern noise about protectionism is it is coming out of the world like this economy, and should it materialize, you have undeveloped economies retaliate. They retaliate, we will have a situation where global trade declines. When global trade the kleins, you have rising antitrade moves with the middle east ceo of the management who is still with us. Are we getting ahead of ourselves . We have not heard anything concrete about the incoming u. S. Administration, or should we take serious those threats against the wtos, where do you stand . Trump president elect have made his views clear. A lot of people speculated that the candidate trump would be different to the president trump. So far we have not seen any evidence that is the case. So my real concern is in fact at least some of what president elect trump has indicated will translate into actual policy, and that is risky for the global trade situation, and also for the Global Economy<\/a> in general. I am definitely concerned. Have jamiewe also just warning about what is happening in europe, and that there could be more discontent for populists across the continent. We have the ecb policy meeting. Investors are thinking it will be this news fast, more boring the better. The qe, do you expect continuation of that, or will there be pushed back from germany as we see inflation rising their . Tarek i think the ecb will be on hold for the foreseeable future, and that will create a problem as i indicated earlier in the currency markets. With u. S. Industry going up Interest Rates<\/a> going up and the European Central<\/a> bank staying put, that leads to a strengthening in the currency which will put more pressure on Global Economy<\/a> in general. I think jamie dimons concerns are valid. They are increasingly popular amongst analysts and strategists, and there are concerns about the french and german elections later this year. Yousef the trump trends we saw emerging off of the back of the election are facing their first serious test, inauguration. Come inauguration. How much of this is present . Tarek very little is priced in, and we saw an initial rally for this recently, but if you look at what trump has indicated, he is going to be fairly proactive in terms of Economic Policy<\/a> on day one. That gives the opportunity for the markets to continuously react. Yousef what about inflation . Before the break, you said i am concerned about inflation. The Inflation Numbers<\/a> you are talking about, and what analysts are pricing in, are wrong. Tarek i am concerned it is sticky and structural. We have Inflation Numbers<\/a> out from the u. S. Yesterday, and the headline inflation exceeded 2 since 2014 the first time. A lot of investors believe this could be transient, but i think it is structural. If you look at the Unemployment Rate<\/a> in the u. S. , it is already fairly low. Donald trump has waltzed in and declared he will take more jobs than any other president. That is not what we need when Unemployment Rate<\/a>s are already low and wait pressures are increasing wage pressers are increasing. We have a pipeline in innovation, not just wages but health care, energy, so there are two or three major factors contributing to inflation that honestly speaking we have not had to worry about for several years. Shery inflation is a key issue when it comes to southeast asia. We are going to see the first intral banks sign on policy indonesia and malaysia. When it comes to emerging markets here in asia, what is your forecast for the central bank . Some people say they will have to follow the u. S. Tarek i think it is very likely that they will have to follow the u. S. For a couple of reasons, not least the fact that the asian economies are doing reasonably well. If the base Case Scenario<\/a> is they continue to grow through 2017, that is the impact on exports and business generally in asia. I have reasonably optimistic on asia this year. Valuations remain attractive. The economies are in a good place. Gdp is strong, borrowing is low. For the chinese yuan, there is no basis coming from the trump administration. China does not look like it is proactively devaluing the yuan. Where will he go with that . Tarek china is a surprise continuously. Most analysts were concerned about china last year. They told good numbers on growth. The concern remains that this was a situation that is untenable in the longer term, but shorterterm, they can extend this reasonably strong growth. Yousef we will see how it plays off. Numerous asset management. All right, a preview of the plans to manage assets to seek higher returns. We can hear from the higher investment managing director. Yousef welcome back. You are watching bloomberg. Shery the Kuwait Investment<\/a> authority is planning to manage more of its own asset, moving as much as 8 of allocation in house up from 1 or 2 . The managing director says the greater risk is needed to boost the current for the funds turning to private assets and infrastructure. I want to compare our returns the last 10 years. I dont think we could repeat this. That is why we want to do something different. That is why we are expanding in the infrastructure and the credit. I think we have to take more risk in order to maintain, maintain the returns. That is why three years ago, we start to invest in infrastructure in the u. K. , spain, australia. We invested around 3 billion in different sectors of infrastructure, and airports, seaports. This is a portfolio for our infrastructure. Reporter right now, it is difficult to find alpha. You are clearly looking for it. You are looking for it in infrastructure and credit. Where are you getting it today . Who is delivering that performance, what Asset Classes<\/a> . Let me tell you what we are trying to do in the last three or five years. In the health, it is in the private and the credit. If you look for the s p the last 10 years compared to the risk related, you have to take more risk in order to make less especially in the public market. We have no choice, only to take more risk in order to maintain the returns. The election of donald trump actually changed the appetite for infrastructure. If you are trying to reinflate the u. S. By spending more, does it do the same for other countries . Bader the same is yet to be seen. This is the talks i have been. This is yet to be seen. This would not happen tomorrow. You would need a change in registration, so this will take longer. Reporter if the potential for policy change and Economic Growth<\/a> to come with it to inspire or prompt you to allocate more geographically towards the u. S. . Bader if i look to the Global Economy<\/a>, the u. S. Probably is ahead of everyone in terms of growth. Budget attitude after the election, the tax cuts, deregulation, this growthy will enhance the. Also what we have seen, fiscal starts to work. We have only seen monetary, but now fiscal starts to work. This is the Positive Side<\/a> of that, the u. S. , and the Global Economy<\/a>. Reporter are you taking money out of emerging markets or europe and reallocating to the u. S. Bader we still maintain the highest allocation to the u. S. Reporter how much what you add to that allocation, and how do you invest in the u. S. Right now . Different companies . Bader we are mainly in the public and in the private. In the last few years, we look into the west coast, to expand in the venture and startups. If what we try to check for longterm investments, you need to see that infrastructure. Otherwise there is no size. Yousef that is the Kuwait Investment<\/a> managing authority davos. G in dallas still to come, could the World Largest<\/a> petrochemical maker be on the hunt for extra credit . We have all the details next. 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. Are the first word headlines. Struggling airbag maker terracotta will takata will buy this after the they want to corporate restructuring. Shares are down. The key Safety Systems<\/a> what them to oversee the turnaround. The company says the expert panel is still checking plans. All resumes gains after the biggest drop in more than a week. Stockpile of crude are reminding going down. Tremendous efforts to trim output. The International Energy<\/a> agency is predicting a rebound in u. S. Shale output and oil prices to rise. The money markets are heading for a record. Chinas central bank cant 28 million to open Market Operations<\/a> on thursday, taking big injections to more than 150 billion, unprecedented in weekly data going back to 2008. The purchase Interest Rate<\/a> jumped the most in two years on wednesday. Reports claim that north korea may be planning to start a new Nuclear Reactor<\/a> after a pause of over a year. Reported satellite pictures of renewed activity at the site, either maintenance or refueling. And the north may soon fire and intercontinental ballistic missile. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Shery thank you. Oil prices have rebounded, some from their biggest drop in more than a week. Havecrude stockpiles declined, and the fed chair says Energy Prices<\/a> are something the fed is monitoring closely. Janet yellen the markets can be a source of volatility and have economic new product economic impact. You see fluctuations in energy and other commodity prices, and you watch that carefully. The opec secretarygeneral spoke to bloomberg in switzerland. This is paying off. Mark so far so good. The projections of infrastructure, the decision was taken in november and december, proved right by the outlooks of the various organizations, opec, iea, Going Forward<\/a>. We are seeing demand rising the 24y, and participating countries in this new broad platform, oilproducing countries making tremendous efforts to meet their commitments. So i think it is premature at the moment to talk about whether the numbers are sufficient or not. We are two weeks into this agreement, if you like. Reporter you are meeting again this weekend. Mohammad this weekend, 22nd of january in vienna. To look at the framework for the compliance, Compliance Mechanism<\/a> , which the committee will use to enforce compliance and all participating countries. Reporter how will you be assessing that compliance . Mohammad the framework is a work in progress. Alterations are ongoing. I have met with the chairman of committee ofg kuwait. We are going through a number of drafts, and we have shared some of the ministers who are in abu dhabi recently and are coming back from caracas, where the newly appointed minister, nelson martinez, who will also be a member of this committee. When we convene at the inaugural meeting on sunday in vienna, we will be able to the doctor a mechanism of how to implement it. Reporter saudi arabia does not see any need at this moment to extend the opec deal beyond six months. Do you agree . Mohammad at the moment, because we have to wait until opec convenes on the 25th of may and possibly meet with the 11 participating countries that form this platform to review the implementation of the joint declaration, which was performance then. Based on their crossed consideration of the market conditions, then a decision will be taken on this. Reporter speaking of market conditions, opec does not target oil price, but we are are we at the level the ministers want to see . Mohammad we are focusing on the level of stocks, and we are fortunately optimistic with the numbers we are seeing, including the numbers of the united states. Yousef that was our interview with the opec secretarygeneral mohammed barkindo. We are looking ahead to the bloomberg inventory, suggesting they declined by one million barrels, an important data point to keep. Bloomberg has been told the Worlds Largest<\/a> petrochemical maker will increase 2 billion of loans. We have Matthew Martin<\/a>. We are seeing more momentum behind this story. Reporter what we are starting to see his with the rights rates rising, the oil price has come back a little bit. Borrowing will start to come out and borrow more and more often. They are testing the market a lot over the past year to gauge what sort of pricing you can get if it goes out and borrows. And within that protesting, we could look at taking a load of 2 billion. Yousef what does this tell us about the wider story . Who else could we be seeing . Is it industry pacific specific . Tarek we will see it matthew we will see it across all industries across the region. The Banking Sector<\/a> is going far. They will have to raise rates from Capital Markets<\/a> to try to ease the funding situation. Petrochemical makers like sabic are struggling with the lowest selling prices, so they will need to raise some money to help fund the cost. And we have also seen a lot of the airline, the airlines in the region trying to borrow recently, lock in the funding before costs start to rise. Yousef this is a scramble not before the fed raises rates but before Inauguration Day<\/a> maybe, before they get serious about policies. Matthew there is definitely a case for that. Nobody likes the volatility that creates. We have seen a huge amount of volatility over the past 12 months and the Political Risk<\/a> has been something people talk about much more than they ever have done. Nobody has ever complicated contemplated risk in the u. S. Or the u. K. Now those are on the agenda. Moving in place is a wise move. Yousef Matthew Martin<\/a> for the additional insight. What are we looking at . The d we have assessing monetization drive. We will hear from the chairman of from india. This is bloomberg. Yousef you are watching bloomberg. I am yousef gamal eldin in dubai. Shery im shery ahn in hong kong. Tohad airways has no plans take a stake in lufthansa, although they are exploring further cooperation. The ceo rejected the newspaper claims of a tie up, but said y are discussing decanting deepening their cochair deal. Their shares jumped after they said etihad could buy as 40 . Australia has plans to invest in iran. The ceo will now focus on expiration programs in senegal, million myanmar, and hong kong. The decision is for capital allocation. Iranian oil is one of the nine Foreign Companies<\/a> actually in talks with iran. Shery Donald Trumps<\/a> pick for you and Ambassador Says<\/a> she is in favor of moving the u. S. Embassy from tel aviv to jerusalem. The South Carolina<\/a> governor nikki haley declared her support for the move, although it is expected to inflame tensions in the region. A spokesman for the government of jordan recently said such a plan would be a red nine that would inflame the arab world. Banks were at the center of the wall street session once again. Goldman and citigroup came in with earnings and beat expectations, but Deutsche Bank<\/a> is making all the headlines. One in four will not enjoy any business bonus. We have all the details from new york. Reporter the announcement Deutsche Bank<\/a> plans to cancel bonuses for 2016 for one out of four senior bankers grabbed wall streets attention. It comes one day after the doj settlement of the multibilliondollar fine, but it has indicated it is not connected. Managers elsewhere in the bank has been asked to identify the bottom 20 of performers for possible job cuts. The Global Market<\/a> is ms. Could begin those cuts as early as this week and that is according to yet another source. The current plan has been for Deutsche Bank<\/a> to eliminate 9000 jobs through 2018. The Ceo John Cryan<\/a> is speaking out on u. S. Tv, saying he had always thought of the settlement, though at a lower number. In a statement yesterday, this settlement has been a financial strain on the bank. Goldman sachs, late in the wednesday session, was the subject of a headline. Newspapers indicated an unnamed source, saying goldman could cut up to 50 of its london staff in reaction to brexit. But a goldman spokesman contacted by bloomberg says there has been no such decision. Oldman blowing out fourthquarter earnings. We can see that in recent quarters there have been a big just seared revenue in stock trading and bond or fixed income trading, but in this recent quarter, the bond trading revenue rose 78 . That led to his profit exceeding all expectations. Earnings of 5. 08 a share be the estimate of 4. 82. It nearly quadrupled the profit. And in citigroups numbers, a similar story, bond trading in a 7. 1 . Y, up 36 , profit in the bloomberg, you see on the far righthand side of a big increase in the bond trading revenue, from the prior quarter which had been negative. Su keenan, bloomberg news. India, its economy has taken a hit from the Prime Minister<\/a>s cash band. The move may pay off in the long run if it is carried out properly. We spoke to the state bank of india in davos. Impact has been very difficult. One cant deny that. But having said that, i continue to feel that if we take this up in the proper manner, then in the medium to longterm, it will have a lot of benefit. Reporter what needs to be done . Arundhati ensure the initiatives that we have started, that those get the same kind of focus, and that we now divide the use of cash. If we you are going to slide back into the ways that we had before the d monetization impact, you wont get the benefit. Accrueefits will only when most of the people who are not getting included or were keeping the revenue, both of these common to the financial system, only then the benefits will get to that. You are likening it to a onetime hit, the effect heels good, then the drug starts to dissipate. You either have to do it again, nor or you come up with another plan. Arundhati it may not have an impact, but what you need to do is ensure that you have followup measures to ensure it is a Lasting Impact<\/a> and not something that fades away in three months time. Reporter one of the shortterm impact has been a benefit to your bank. Deposits went up. How sticky are those . Arundhati these are lowcost deposits. They come into the company. To that extent, it doesnt improve the cost of funds for the bank. 15 elieve around anything to 40 will stay put. We have to see that. It is impossible to really give a clear prediction, because we have never done this kind of a thing. Reporter why is reduction retention as poor as 15 . People dontcause like feeling used in business. If that is the case, much of it will go back into circulation. If much of this money is from savings of people, which was fitting in their cupboards or whatever, then it would grow. Once it is in the bank, it will stay in the bank. And we have a wide range of arrangement 15 to 40 . Reporter what kind of commitment to you discern from Prime Minister<\/a> modi to the initiatives you describe . It is true if you find a way to make money digital, it is easier to track, and you wont run into this problem of undeclared earnings and the gains from before. Arundhati it is not only that one piece. If you go back to 2011, in india they said 94 of Small Businesses<\/a> were funded by unofficial channels. Meaning 94 of businesses were not really rooting their transactions through the banks, doing everything in cash. That made it difficult for them to access the Banking System<\/a> for funds. Once these businesses start transacting in the bank, it will make it easier for them to take loans from the bank. It will make it easier for them to escape. So it is a advantage not only to people escaping the net but also who will also get included, Financial Inclusion<\/a> we talked about. Happen will actually when people can leverage their savings. Yousef that was erik schatzkers interview. Amazon is said to walk away from 1 billion takeover in dubai. We will give you more on that story and what is behind it. Yousef welcome back. You are watching bloomberg. On yousef gamal eldin in dubai. Shery i am shery ahn in hong kong. A thirdquarter net profit of just over 68 million rials, up slightly from the same last year. The company produces tomato paste and others. While the stock has taken a battering over the past few months, four out of five analysts rated it by. Buy. Thank you for talking to us. I am looking at your net profits, increasing marginally by 0. 6 , mostly because of cost cuts. Sales fell. How much of that is a problem Going Forward<\/a> . Able to writen rawbenefits of low income materials for longer than we it has droppedow 14. 5 . Talking about this, but at the same time, the market being upset by the impact of [indiscernible] environment condition emerged in the market are practical issues. The Gross Margins<\/a> are the upside with [indiscernible] we were quite happy with that. Opposition, weur had to spend some extra money, 20 , on this tradition expenses. Yousef let me just jump in here. You mentioned weakness in consumer spending. Talk about the environmental condition. We have seen a massive shift from the saudi government in terms of spending. We are seeing spending go down. How will that play out the rest of 2017 . Is there more downside . Att i think when we looked this, we were quite confident we will follow the rest of the year around similar lines regarding the third quarter. Beyond the next quarter, our fiscal year and march, so for the rest of 2017, i think it is too early to say. There was less cash flow around. Learning has to be more rational. That will have a hard impact. We are not we have yet to see whether the power will control amongst ourselves and the industry. Yousef you are one of the Largest Food Companies<\/a> and saudi arabia and the region for that matter. What about when it comes to Capital Expenditure<\/a> . You are looking for an investment in saudi arabia or perhaps in the borders. Wout sorry . Yousef perhaps beyond borders outside of saudi arabia. Have that. We do we have had quite some we would like to extend autonomous growth. Those opportunities dont present themselves every day. But we do feel also with the change in Economic Conditions<\/a> that there is made change. If we have an opportunity to growth external [indiscernible] so. Ill do we will maintain the change in the future because of market conditions. Join withvels will market conditions. Yousef all right, we will leave it there. Thank you for joining us on bloomberg television. Lets stay in the region and take a closer look at stories coming up around amazon. They have walked away from talks to acquire dubaibased soup. Com after disagreeing on the price. Joining us is a reporter. So this could have been amazons first entry into the region. What went wrong . You hinted at the fact that they did not agree at the price. We know the company is actually the highest thought youd company in the middle east valued company in the middle east. What happened last year, soup. Com approached them, Goldman Sachs<\/a> to look for buyers for the company, then discussed with amazon, and as you said flip card, but negotiations at some point have faltered. We dont know the reason beyond what you said. Now at least what we are hearing dubai, dubaiing to operators that this to potentially by the company. Shery how relevant is the region becoming to Technology Investors<\/a> . Mahmoud well i mean, this is a region that is literally booming in terms of technology. By 2025, 100 60 million users of the internet, that will bring about 95 billion. You can imagine a lot of investors to the region with an open i. Eye. Yousef lets take a closer look at this part of the world in terms of importance talks to watch. We are looking at rocky capital and rocky bank. Afterobal Telecom Holding<\/a> been procomp denied speculation, and the South African<\/a> stocks after the first on bloomberg interview with the finance minister, saying there is an improving trend in growth. That is all we have for this edition. Shery top stories coming up next. Shery it is what rpm here in hong kong. Im shery ahn with a hot dust of the update. Remains untainted on this thursday. It is expected to plunge as say thel backers structuring must outweigh wise buys. 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