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tv   Bloomberg Markets Middle East  Bloomberg  May 10, 2016 12:00am-1:01am EDT

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anchor: the imf has good news. wildfires move away from oil facilities. paying on the horizon. rising badlands and slowing growth. heralding a downturn.
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victory in the philippines and says it's priorities will be to fight for the poor. t is 8 a.m. rish: it is bloomberg markets middle east. i thought what we would do is take a little bit of a broader perspective. we have a cracking function on the bloomberg and this is the trade relationships. dubai is weathering the store a little bit more. at 2.2% butgrowth this shows you the trading relationships. and the three top trading relationships for this region here in the uae is india and
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india is weathering the storm better than anyone else. and look at number three. in as this is about the global relationship. this is about dubai spending a little bit more. it is all about the global trade and what happens externally, internally and those kind of fiscal issues. rish: it is in sharp contrast to what the imf has been saying of late. downgradedtially what is happening as far as global growth. this was a couple of weeks ago when they downgraded this part of the world. equity markets in this part of the world taking a bit of a fault. biggeston track for the -- longest losing streak for
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equities since 2000. let's have a look at what is going on. trading20 minutes of gone so far. the hang seng turning flat. a bit of a turnaround taping -- taking place. it is under two hours away from the opening of the markets in the uae. this is what it looked like when we saw the last close. this is the doha market. just seeing the dfm general off by .3 of 1%. let's have a look at what is going on in tel aviv where is really stocks are moving to the upside at .3 of 1%. we're talking about a global with various guests. manus: let's check in on the other stories making headlines
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around the world. consumer prices continue to rise. with economists estimates. stronger inflation driven by may give the pboc a reason to hold off on the cut to a key range which is at all record low. airbag maker to cut a is on -- takata has to produce a recall plan as to why the recalls may mean a second straight annual loss. it is expecting a shortfall of $120 million in the 12 months to april. it has been predicting a $55 million profit. at least 13 deaths are linked to the faulty airbags. itsta has lost 80% of market value since the scandal broke. dubai is not concerned about the
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rise of rival banking house in hubs middlest -- east saying there is opportunity for everyone. they arein the restructuring into an economic zone with its own regulations. these exemptions and links to riyadh airport. abu dhabi is expanding its financial center. >> i think is it -- it is about collaboration and connectivity. three financial centers. fore is much more room everybody. my -- over 2400
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journalists in 150 news bureaus over the world. the imf has welcome news saying it is weathering and economic downturn better than its oil-rich neighbors. the fund sees the growth accelerating to more than 5% by the end of the decade. saying this despite a fall in property prices. >> this is a welcome correction at this moment. is [indiscernible] than where they we 2015. -- that they were in in 2015. is the model why here holding up better than the
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rest of the region? guest: it is a basically more diversified model in a region beset by turmoil and more. and it isto diversify not reliant on oil. it is holding up pretty well. the big question is you see it in the rental prices have come down and so you see it in the school waiting lists are getting center. people worry, is this the beginning of another big slowdown like we saw in 2008, is this just a blip and the imf is saying this is a bump in the road. with the durham pegged to the u.s. dollar, this is a good thing that you are seeing this weakness. hotel prices might come down. activity prices might come down, tourists might come in and it might help them see over the above and then back to 5% by 2020 pretty quickly. is the kicker. literally of the red -- up the
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road we have of a dobby and they have pulled everything back. they were a little bit critical step was an opportunity to off fiscal constraint. >> the imf said in 2015 you saw the writing on the wall and you knew the oil price was low and you knew something had to be done so they tightened their belts and the imf is saying you did the work that you needed and you have some nice fiscal buffers. if you wanted to you could ease off that a little bit and you could loosen the belt buckle. drop in oil for the price and give the economy a bit of a boost. they do not have to follow it but we will see if we see some spending plans come back online. manus: thank you. one of our managing editors there. what are the growth challenges here and around the world? our guest is visiting from new
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york. great to have you here. timely arrival. the imf is saying to buy is weathering things a little bit better than abu dhabi. give me your perspective in terms of the challenges for the region from a fiscal perspective. this region is tied to the oil cycle and we have seen oil prices come down and stay .own at pretty low levels having a little bit of a correction upwards but that is not a big driver of this region's economy. manus: the one thing we are seeing is vision 2020. it gives greater latitude for fiscal constraint. they could step up -- a step back a little bit. break the addiction to oil? >> the verdict is out and it will be for a while. this is a breaking development. people outside this region are still catching up on the story. what itng to understand means. it is a positive development.
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you to have -- you have heard about the diversified nature of dubai. other economies need to sink about diversifying their economic base away from too much dependence on oil. how does the entry of iran back into the fold of the global community effect what is going on in the gulf and the region? think that is something we will have to wait and see. iran is a fairly large economy but it is caught up in some geopolitical turmoil and whirlpools. we will have to see how that is plays out. income is at number three in terms of importance. it is telling me about the potential interconnectedness. rishaad: absolutely. we have turkey and what has been
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lira on with that and the as it has been plummeting. what prism do you look at it through? guest: i am looking more from the global perspective. the middle east economy is important most notably from the oil perspective in that regard so that is the prism most people sitting outside the region are looking at. the other prism is this is the emerging -- one of the emerging areas of the global economy including some frontier economies. looking at whether this region will step up to be an emerging economy that attracts local investor attention i think that is the key focus. manus: we'll have a lot more global perspective with our guest who is visiting the region . chief global economist at sap global. we are in just a couple of minutes. this is looking like
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the longest losing streak in this part of the world excluding japan. what have we got now? : the index is still lower by .1 of number 1%. it is down for 10 sessions in a row. put japanwhen we do back into the picture you can see these gains on the nikkei to 25 in the has been the original index tracking higher. we have seen a bit of a choppy section -- session. japan has been treating -- trading higher. up by .2 of 1%. we have seen australia turn positive and korea tracking higher i .41%. india has just come online for the day. tata motors down 2.1%. it is the worst performer on the
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sensex so plunging significantly. some of these markets did turned negative. it has been a little bit of a choppy session. the weaker yen is boosting the overall index. let's tell you about what we can find on our website where you can get the rest of the day's news. tailor-made for the middle east. in-depth market reports, data from this part and that part of the world. we can watch -- you can watch all our reports and special content only available online. could there and be closer to a deal with opec or has the time for action past? a triple we may that could be putting saudi banks under some pressure. this is "bloomberg markets middle east." stay with us. ♪
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numberd: your back with " markets middle east." you might expect the country's banking industry to be set for a of costsa trifecta means of the kingdoms bank might be facing a bit of a downturn. what is going on here exactly? >> after the first quarter of this year when saudi banks surprised, nine of 12 saudi banks beat earnings expectations in the first quarter which defied all expectations amid the oil slump which is prompting a slowdown in saudi's economy. we have been crunching the data, taking a look at analyst watching theand commentary from the readings
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company and the consensus is clear. from this point onward accommodation of slower economic towth and increased lending the embattled construction sector and higher borrowing costs will spell the end of this saudi banks. rishaad: how many of them managed to beat expectations? income increased. at the very heart of it and increase in lending. lending growth accelerated to 3.4% in the first quarter. up from 2.5 in the previous quarter. kind of unexpected at a time when the government is cutting spending, when the economy is due to slow by more than half. as i say, part of that lending gross was to the construction center and contractors are having some cash flow issues at the moment as the government reduces its expenditure on
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infrastructure projects. samuel potter there. manus: we had the inflation data from china this morning. and talking about the debt load in china. the csr is weighing some changes. weigh curbs on backdoor lifting valuations. this is all about trying to curb some of the excesses within the chinese system. csrc weighing quota for backdoor listings. as we get more we will bring that to you. let's stick with some of the day global themes now. that you back to saudi and story that our colleagues were talking about. just listening to sam talking
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about the funding costs in the region, this brings me back, it will bring up levels. are we chattering -- all we channeling 2008? this is what caused the great issue in banks with the real economy back then. >> i am flying a little bit blind here. it would be drying a long bow to make an analogy to 2008. about. what 2008 was it was the global financial crisis and the sub prime financial crisis. you can get funding stresses in particular markets from time to time. such would we are not going into 2008. cpi is rising and deflate-gate is dropping. it is too early to call any turn in china, is it? guest: that is reassuring data. if it was going the other direction we cannot be more
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concerned. they do not want the economy to slow too far too fast but they do want a controlled slow down. you mentioned the debt overhang. that is the weight hanging on the economy. they want to reform and rebalance the economy. juggling three balls at once. if growth slows too much they have to worry about that. they do not want to focus on growth, they want to focus on reform and rebalancing. setting the next stage for china's economic develop men. quite critical. my subjected -- subjective take is that it is time for fiscal expansion. is that going to happen in 2016? tightness isscal coming off a little bit but that is referring to, what lessons will future historians draw? central banks did acrobatics.
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they have negative interest talk ofuch less qe and helicopter money. if you are relying on monetary that much eight years after the financial crisis where is fiscal policy, why isn't it being asked to do more of the work your, that would be the question. i am not a great fan of negative rates. it is a very counterintuitive policy. it has to -- seems to have some effect on the yield curve. that is where monetary policy seeks to operate but the effects in forex have been a little bit haywire. they have negative interest rates. central banks are going to go to that kind of policy it begs questions about the overall policy mix. maybe a little bit more weight should be placed on fiscal policy. doing we need a g-20 response? do not think so.
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economic policy is something that has to be decided and sat at the level of the individual country. i do not think this is a coronation failure. you need g-20 when you have some dilemma. manus: will the fed go twice this year? guest: one in june and toward the end of the year. it is data dependent. brexit, how much of a risk is it? >> it is a leap into the unknown. it is up to the british people to determine their lyrical future. there is a horse that you know and of course she do not. unknown scaring the weights of us all. thank you for joining us. make sure you come see me in london or back here when we are next in dubai. a change in the weather
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could be good news. we will be talking to our reporter to find out what it means for oil production. this is "bloomberg markets middle east." ♪
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rishaad: the change in the weather is helping firefighters battled the blaze taking place in canada's oilsands region and oil companies are starting to bring production back online. what are the cooler temperatures doing for the prospect of getting these fires and control? >> they have been very important. on saturday they were looking at , morere doubling in size than doubling in size. happen likely because of cold front came in on sunday that run a little bit of rain. it allowed firefighters to hold the line and keep the fire from
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spreading into some of the major mines.ds we are looking at a much improved situation. rishaad: how much oilsands production is down and is there any time frame that they are giving you as to when they can get back up to speed? most: at the moment one millione that barrels a day or more is off-line. that is something equivalent to just shy of what algeria produced last month. , some oilsands companies are starting to bring oil production back already. shall just today said it had started up operations in the oilsands at reduced rates. other companies such as cocco
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phillips are bringing in a team of people to evaluate the situation. is bringing in people in the next couple of days to restart operations. the restarting of these units is -- in as little as a week or a could take longer. depending if they were -- how they were brought down. how much damage was done to the oil infrastructure? guest: the oil infrastructure did not met -- sustain much damage. there was a minor amount of scenic facility. they did not sustain damage. the problem was the logistics. workers were evacuated, the entire city of fort mcmurray
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which is nearby. rishaad: the latest on this canadian wildfires. poverty is a priority for the man most likely to be the new
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rishaad: 24 degrees in sydney. 2:30 p.m. in the afternoon. 90 minutes until the close of the day's trade. the australian benchmark just about flat so far for the day. date imf season emirate once on the beat -- blink of collapse. weathering the issue better than its neighbors. talk: almost ready to
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production limits with other opec members. for the a policy people. the victory in the philippines presidential election. i am her shots on it. is 8:30 a.m. in down untile counting the start of trade. let's talk about what is coming up on the european programming this morning. we have numbers coming out from , my colleague will be talking to the ceo of the company. the second quarter, how big is the less going to be in the second quarter? this is a bank that is trying to move itself more toward wealth management. we have a chart that highlights the way the market priced in and
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some of the difficulties that credit suisse is facing. this is in the white lines against the sector and ubs in the blue and purple. headaches in the first quarter. last week they were talking about paralyzing volatility. i wonder what phrase of the day is going to be -- come from him. we have airlines, banks, we have employers, deco and easyjet all to play for in the next hour or so. talking -- this is a temporary staffing agency. the recovery in the eurozone, how are they doing in the french market? easyjet a lot of questions to downing of thehe russian jets over sinai, how much is that thing into the
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business. and can they be successful? you have a cracking panel for us. where we are -- where are we on the brexit monitor? anna: we have a great discussion all around trade. we are bringing together a couple of next -- experts that the -- who know a thing about trade. interesting perspective about how small countries managed to do trade deals that he says have real value with big countries such as china. what could any trade negotiations look like? has worked at the european commission. these guys have a lot of experience and we will talk to the -- to them both about brexit. vote looming large on the 23rd of june.
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factor in all that chinese data that you have been talking about this morning. that it issaying moderately optimistic. not a bad set of data. i will see you very shortly. thatad: sources saying china's stock regulator is considering curbing the flow and taking back your listings. david: just some breaking news here. the csrc said is they were looking at or conducting an in depth analysis on the impact of these chinese and they want to come back and read list. understand based on what sources have told bloomberg that the csrc is looking at the limits are introducing some
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limits or controls to perhaps in the flow. 40 companies have received buyout offers and we understand based on whether they have said that their plan is to release them in china. what can we say? decimal restrictions may include capping the valuation multiples. honest keeping the deals as far as pricing. we might see another option on a quota to limit the number of reverse mergers. maybe on the amount of deals or the volume of deals each and every year. developing story. we do not have a timetable but watch out for this. get that toyll five minutes from now. elsewhere here is juliet.
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the decade to 25 in the afternoon session is up 2% thanks to a week again. there was a choppy start to the days trade. china is on its lunch break. hong kong pretty flat on its lunch like -- lunch break. this is pushing the regional index up. it is on track for the third win of the month. we are at may 10 but the index has been down for the past successions in a row which is its longest losing streak in four months. if you strip out japan it is not looking that great on the overall index. it is lower for a 10 session. we are a bit of weakness come through from singapore, india, and thailand. australia has turned positive in late trade. this has been what is causing -- putting pressure on a number of
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equities in the region including those oil players. contract andread the european contract. it is up but if we look at the new york contract it is still coming under pressure so we are saying that big stockpile coming through in the u.s. as well pushing this price down for a second session down .3 of 1%. manus: thank you. iran is taking its time on working with other opec embers to limit oil production but with prices at a 12 year low it seems action may be needed. now.ny dipaola joins us oil is on a two week low. what we have here is the radiance. we with thee are
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iranians potentially coming on board? anthony: this is something they brought up this weekend. if we get back to the point where we were before sanctions were imposed that they could start talking with their opec partners about quotas, about potentially a freeze. coming back in with some mechanism to control production and try to have an impact on prices. manus: a lot of the headlines are saying that they are building in terms of production. hittinge we on pre-sanction levels? anthony: we are close. the oil minister said within this current month of they should reach 2 million barrels a day of exports. that is pretty much where they were before sanctions. level. close to that a lot of analysts are telling us on production they could do a little bit more and it will take them more to the end of the year. they are not really saying -- seeing iran coming to the table anytime soon. they want debate is to get themselves set up and there is a question on whether the members go back and said you
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are at that level, let's get an average across the first or the second quarter and that could ring the iranians to the table and the saudis are not for moving. anthony: you have to ask why the whole freeze discussion came up in the first place. as you said prices are up almost two thirds from that level. that takes away some of the urgency, some of the need to talk about a freeze. you have iran in the market but as you mentioned you have the forest fires in canada, that is taking supply off the market. that is keeping the price hike at a level where opec may want to know. manus: the dollar and the fed may do something with that. thanks for bringing us the latest. east energyg middle markets reporter. rishaad: let's check the stories making headlines across the world. despite the head of
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the lower house calling for the process to be annulled the senate chief refuses to recognize that decision and analysts say it is unlikely to be upheld but -- media said the opposition has a need for impeachment. which would see to morris from office while she faces trial. he will add the chairmanship of the workers party to his other honors which are supreme leader of the country, chairman of the central military commission, commander of the army and chairman of the national defense commission. he closed congress by selecting members of the politburo and praising the economic and military strategies laid out by the four-day meeting. the u.s. and russia have pledged to maintain a fragile cease-fire that was set to expire in aleppo. in a joint statement the powers
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said they are determined to improve and sustain the truth. russia has agreed to rest the syrian government to minimize aerial operations over civilian areas. an attempt will be made next week to restart peace talks that collapsed last month in geneva. powered by over 2400 journalists in 150 bureaus around the world, this is bloomberg news. i am shery ahn. the tough talking mayor said fighting poverty will be his party as he claims victory in the hit -- philippines. one of his big rivals has conceded. this -- our correspondent has more. has linda: they voted for change while endorsing [indiscernible] he also promised to eradicate corruption and address infrastructure bottlenecks in the country.
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forward he step needs to unite the people. this is one of the most divisive elections in the past 30 years. he also needs to gain the confidence of the investment community. theou take a look at how peso and the stock market have done they have dropped in the last months of the because investors are not sure what the new administration means for the investment trinity. -- community. rishaad: still ahead. though worlds most speculative frenzy. more on china's commodity fever. when we return in a couple of minutes. ♪
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rishaad: you are back with "bloomberg markets middle east." we have been looking at china.
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solidifying and not dropping. the picture in what has been a slowing or stabilizing economy. that's what we're having in can simmer prices, they have been up from october. now up to 2.2% for three straight months. they are not continuing to rise but they are not dropping. ppi you're seeing a narrowing of the deflation trend for fo straight months. is below the government's target. considering what we daily,m the people's saying that the authorities need to start looking at the debt
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pile. rishaad: but looking for government. indicated -- indicators of. >> what has happened to her materials and commodities, they have gone up. you have seen chinese steel mills cranking out more steel. input costs are higher. inflationrelated to but the deflationary trend is narrowing. what you're seeing is a rising inflationary environment or stabilized environment so you can bet that if the government is more concerned about the rising debt pile you'll see a more moderately prudent monetary policy, less stimulus from the chinese government. rishaad: steve engle with the latest on these inflation numbers from china. manus: thank you.
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craze ofdutch tulip 1630 72 bowl. history is littered with losing frenzies. where channeling some pretty prophetic moments here. the tool crisis, crisis. are the wheels coming off the chinese commodity market? is losing someet of the frost that built up over the past couple of months. remember we saw trading volumes across the three exchanges explode over march and april picking up $280 billion in a single day at the end of last month. that is the equivalent of the
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value of the entire u.s. equity markets. prices rose during this treating surge. this was not a rally completely divorced from reality. some speculation that economic stabilization and supply-side reforms would lead to constraints of some materials but it turned into all-out credit driven trading frenzy. in.exchanges stepped they raised transaction fees and raised margins. they lowered trade. manus: this is about retail investors getting margin calls. it is a car crash of issues in terms of everybody taking pain in these markets, isn't it? >> right.
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you do not get the same degree of reporting on who is holding these positions as you do in u.s. futures markets. by looking at open interests, trading hours you can estimate the contract has held for a couple of hours, under two hours. that compares to 40 hours for debbie ti. this is short-term -- hours for wti. morgan stanley's is 60% of the trading volume in china is speculative money as opposed to hedging. we have everything on "on the move." with pricesening ? >> steel prices fell by their daily limit yesterday. they are extending losses today.
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what is happening is reality is catching up with the market and there has been a slew of bearish data. importsockpiles, cotton that is casting doubt over the chinese demand story and that is weighing on the markets. thank you. journey us from singapore with the latest on bubbles and busts. rishaad: coming up. a look ahead to what to expect from emirates. as we continue. ♪
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rishaad: we have a look at the stories are making headlines around the world. by do is restricting the number
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of posts. after the death of the student. sold -- not sought treatment. manus: the chinese insurer may face inspection at home. last week the watchdog said it will seek more disclosure from propertiess buying or by investing in unlisted companies. htc shares a slant on monday when they came out with first-quarter sales which had plunged 63% from a year ago. htc posting their fourth straight quarterly loss.
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the company hoping the launch of its 10 series smartphone and virtual reality headset will boost sales in the second quarter. just an hour away from the market open across the emirates. manus: it is indeed. i'm going to be looking at emirates. i am on my way out the door countdown."ish with " at 39,000 feet in full cruise mode. where is the next leg of growth? i think that is the big question. what is airbus going to do? are they going to deliver a new engine option to emirates? clark has got some big old headwinds hesitate which he has the eu snapping at him and the
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u.s. carriers. we knew -- we know they do not like competition. all those facets are in play when it comes to emirates. we have heard from the imf talking about the slow down here. we heard from andrew barton talking about more people going home. no man is an island but certainly emirates has acted in that way. they do not want partnerships. they do not want to be. qatar airlines. it could be that we have a different fish when it comes to qatar. it could be benefiting emirates. beingould find themselves bumped off on two other flights this summer. the carriers there reducing the frequency of 15 of its regular routes. destinations in three u.s. cities, and australia. they have said that other
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affected cities include manchester, copenhagen, and one flightch see last week. when you talk about it it is down to this whole thing about airbus delaying the delivery of some of its aircraft to qatar. the chief executive did say at the end of the day that he was a bit upset about some of the quality of the airplanes and how they were performing and they were not really on target. they had been told they would and the did not do what they told they would do. manus: it will be one of those days when we dig a little bit deeper under the hood area we have credit suisse -- under the hood. we have credit suisse. global markets will be the division that we are keeping an eye on. revenue we are looking for 5 billion swiss francs but a pretax loss.
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they cut an additional 2000 jobs. andsecond restructuring five months. this is the ceo who is finding out what is really going on by his team and it sounded as if he did not have a full grasp of everything that was going on. trading revenue. if we look at trading revenue around the banking industry, industrywide, trading volumes are at their lowest since 2009. what a we going to get in terms of restructuring cost? that man has a giant job to do. a snapshot has been happening in this part of the world market wise. what we have is the day where we saw losses turning to gains. will europe follow suit? anna edwards and i will be back in under couple of minutes. that is it for us. in to buy it is 8:57 a.m.
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results.the anna edwards and i will be back with you in just under two
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anna: japanese stocks as the yen falls. the peso in play. gainingippine currency ground after the outspoken and theroversial rodrigo claims presidential election. the swiss bank is said to record first quarter results among restructuring. we will have an interview with the ceo at 7:15 a.m. u.k. time. ♪


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