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

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♪ ♪ the saudi exchange is said to raise 60% growth. calls for the good limits on what they can earn in transactions. is building in turkey with increasingly bearish signs of a $25 billion stock selloff. space ass troubled it's drew doughty partners stop
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payments. feeling the heat from the middle east. it is 8:00 across the emirates. 5:00 in the morning in london. rishaad: in hong kong. just around midday. welcome to bloomberg markets middle east. >> we started the week with oil. you think there is enough oil out there in the world you might be mistaken. predicting the price of oil over or 25 years, the eia says you're going to need another saudi arabia to question the thirst of global demand. see is what we're going to in demand to over the next 30 years. 20 million more than we currently have. what is going on with the members of opec?
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the saudis are continuing to pump. russia is just on the tip. usa production is dipping. output is dropping for the fourth month in a row. eiaou go according to the the bulls are going to love this story. rishaad: there is also the peak oil theory. thecomes a point where production starts to boil off. it is all a bell curve apparently. the bowls are definitely out there running. prices are going to go up. and what point you to we get new production. it's a counterargument to what they might be saying. let's see what body. mumbai.g
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topics with the hang seng market falling as well as the nikkei in japan. this is what looked like. the abu dhabi market was down just a bit. over egypt in tel aviv this is how they closed wednesday. lurching lower for the cairo market. up by three quarters of 1%. manus: some of theout other stories that are making headlines here around the world. david: let's get started in brazil. the president is facing possibly the end of her career.
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the impeachment proceedings. allegedly massaging the economy to new areas. proponents believe that they have more than enough support to force her out. it is expected quite soon. sources say nissan is seeking a one third stake in the machine company. it has been battered. company is says the making a joint venture on electric cars in china. barring a have been traitor from working in the financials. trading book by $11
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million to hide losses. falsifiedors found internal records. authorities took no action against the individual. miners in iran are seeking $10 billion to develop the aluminum industry to meet growing global demand for the metal. the investment could help the industry. from 350,000 tons a year. iran would look to export 60%. news 24 hours per day. manus: sources of told us that saudi arabia is planning to increase
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trading fees by more than 60%. matthew martin broke the news. if these fees rise, what does it really mean? this is part of a much bigger story. we're getting ready for the ipo. matthew: part of what the trying to do is to make an immediate boost revenues. short-term the brokers saying what i have ever pass this on to the traders themselves. manus: yetve never met a broker there's going to sit quietly and really take this at face value. our societies
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concerned about the brokerage in any way. they do provide liquidity. the fees are low compared to other markets in the region. to some extent this is bringing the fees of to the structure elsewhere. really likes it when they say your margins are going to fall as a result of these activities. manus: great story matthew. great scoop. nicolle: rishaad: the draft that is wiped out turkish stocks this month could affect istanbul. several bearish signals. what is happening here?
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sam: it is quite simple. a story of political risk in turkey. a couple of weeks ago we were looking at influence into bonds and stocks outweighing all the outflows we've seen in the past 12 months. that has all gone out the window now. the also 100one index was down 7.4%. thes mainly because backdrop of the markets. it is ending with the prime minister leaving his post. a reminder to all investors. one of the biggest risks you take is political. nicolle: rishaad: driven a signs yet that it may happen?
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sam: it underscores the bearishness in the turkish stock market. we've got moving averages. divergence. i won't bore you with the details. the point is that those measures are all pointing to increase to bearishness in the turkish market. this selloff and we did see a slight uptick yesterday. it might not be over yet. rishaad: some indicators that are not so bearish. sam: in the short term yes. is aelative strength index measure of how fast stocks have fallen. that is pointing towards oversold. on friday the 30 level. the measure has fallen to fast
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we had a very small 3% bounce in the market. it depends on which side you are reading. manus: time to get caught up on all the market action. cars in focus. a little bit of disappointment in the united states. juliet: pretty bleak. in the afternoon here in hong kong. most of the markets in asia are in the red. is downghai composite one third of 1%. heading towards two months lows. some gains in thailand and indonesia.
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but most of asia is lower. following the presidential elections this week. a little bit of weakness in korea and in australia as well. the nikkei 225. for mitsubishi to start training. it probably won't. there's so many buys in the system on that stock. keeping the daily limit there. elsewhere we've seen those earnings from toyota and bridgestone disappointing. a little bit of the which have coming out from new zealand. basic materials also firmer. having a quick look at the yen
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it is somewhat's weaker against the dollar. manus: you can get everything you need for the rest of the day's news at our brand-new digital destination. tailor-made for the middle east. our reportsh all of and interviews and special content. only available online. rishaad: singapore airlines feeling the heat. carrierson from gulf hurting it. dhabitional bank of abu to talk about the issues it is facing with funding. ♪
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manus: welcome back.
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national bank of other david is the largest lender in the united arab emirates. that missed analysts estimates. higher provisions and lower investment gains. let's talk about the bank the dhabi.ges for a bugatti you have escaped a little bit of a major blow. is can you to you really assure the markets they can stick that number. >> what we put out three years ago is for a different type of bank. to change the streams of revenue non-feeding to activities. to really build our retail bank.
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it is those businesses that are growing extensively. we are very pleased with the progress of that strategy. i wouldn't say we're totally immune to what is happening in the marketplace. have is sustainable business model. manus: issues is the drop in oil prices has caused money to be pulled out of the banks. to we need to see a floor of oil around $40 to stop withdrawals? >> no. the floor price is really irrelevant. you look at the cost of getting oil out of the ground from our part of the world. it is about six to seven dollars per barrel. so what does have to change is where does the growth come from? more from the private sector are more from foreign investment. does it come from different
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strategies that businesses locally expand internationally. productivity needs to improve. rishaad: regulatorye framework they are compare with europe? you have more freedom where you are then you would in europe or the united states? >> it's a very good question. newre moving toward the environment. that is being instituted by the central banks. not only in the united arab emirates but generally in the gulf. we still have a mercantile approach. this as an bank sees important role in doing that.
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rishaad: how does that affect the loan book? >> i think what you are starting banks through strategic reasons are using their loan books as a rotation into other investments. the bond market is improving. banks are moving from their traditional hold on the loan book to a much more flow-through area. that still has some way to go with respect to the regulations in europe. very good discipline is being done here. advantageous to the future. we've got deposits up. downata when we break it
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was standing up the road. where are the new deposits coming from. i get the six dollar extraction price. these deposits are coming back is that good news? >> deposits are coming from people like you in may. in theeen growth commercial sector somewhere in the vicinity of 8%. sector to consumers about providing those deposits. governments have clearly had to use some of their keeping their investment programs going. is all part of the restructuring of the economy that is going on. rishaad: we'll have more from sir alex
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later on. middle east markets will return after this break. ♪
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♪ manus: alex, he said to me that you are number one in bonds and number one in loans. we are at the halfway mark in the year. the japanese are here is a tour de force. the competition, are they your biggest competitive threat or is it the americans? alex: whether we end the year number one or number three doesn't make too much difference. i think all of our competitors
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are effective. the local players if you wish to call them that are building the capabilities from one angle. baseing their investor which allows them to originate successfully. ourink in the long run biggest competitive threats will come from the local markets and this is a natural home for that type of activity. maximum advantage over the next three years will taken. manus: next --ns at 3% for the rest of the year. this is all going to go back to oil. i presume. is that a conservative number and european opinion. do you think the industry is
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going to see a higher number than that. alex: as you look across the gulf the industry will see a higher number. high-quality credit. but i think is important is that the region as a whole has got the risk and return equation right. i know your favorite subject is the corridor. to organic versus acquisitions. are you interested in that activity? we look at opportunities but specifically on bank africa we have not done that. we have a very simple philosophy. it really has to be aligned strategy and it really has to be
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aligned with being able to integrate it and must be medium term. we are building our business organically. it allows you to build internationally in the segments where you can create value. manus: experience,alth of where it is 0% world. across the region we get a single a rating in terms of the bonds. you're going to make more of your money this year the bond market than anywhere else. sir alex: i think we will make money in our retail division.
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we will make money in our foreign exchange and rates businesses. those of the areas that are predominantly growth engines for this year and next. manus: a number of hires and tried to quell everybody's concerned about this. about liquidity in the region. they are on a ramp. when you concerned when you see a spike like that. sir alex: there are two drivers of that. spread was at a minimum. the lowest we've seen for 15 or 20 years. it had to come back. it reflects the risk that the world sees. and the cost of dollars in a market where oil is going from 110 $240.
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the risks differential between arming dollars in the usa and borrowing dollars here. the rest of the world wants to see the world to diversify. the other thing that struck me from the report was that everybody's chasing wealth. this pie is going like that. it is commoditizing. what is changing is that this is traditionally been the place for the international banks. when you have a aa bank minus like ourselves. have the capacity compete
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very well in that sector. manus: thank you very much for joining us. coming up after the
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♪ rishaad: social selling bloomberg saudi exchange plans to increase it by more than 60% for sellers and buyers. increase in fees. is -- the pressure each it eases a bid on malaysia.
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rishaad: singapore airlines forced to cut ticket prices. it is 12:30 p.m. right here in hong kong. manus: it has just gone 8:30 a.m. here in our dobby. dhabi. >> it is super thursday in the u k will be get a raft of data from the bank of england. we get in interest-rate decision and the minutes of their meetings. just six weeks away from that vote on whether britain will stay part of the european union. he is already warned about the impact of the uncertainty around
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what would he say about that today. what will the minutes reveal? if you are expecting a change in interest rates today. we could see one or even two dissenters. maybe some of the nine might go for an interest-rate cut. we could get that kind of signaling for the way ahead coming through the minutes. some of the data bank drop. pmitruction pmi services and this goes back to 2013. you can see from the data how things have been worsening. maybe it is you keeping in the at leisure trend alive. we've seen them announced just after the close yesterday and earlier chelsea football club.
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they're going to get a payment as a result. italy of the only about upgrade their forecast yet again. he wanted to see fewer partnerships with sports teams. it fails to qualify for the european championship. getting some grumpy looks from some people here in london. this partnership is back 10 years. it could affect the earnings. manus: a lot of political issues also affecting the economic outlook. >> a host of headlines coming out of that meeting.
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during countdown today. he was concerned about brexit many european voices are concerned about that. we will also be hearing from the german interior minister on the migration issue. there have been tensions at the top of german politics about how to deal with the migrants. plus get a host of earnings reports coming along. it is a thursday so why not? itv. we saw channel for warning about the brexit. the pre-vote impact on the advertising industry. manus: let's get back to rishaad.
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rishaad: winning some vital breathing spaces after its middle eastern partners stumped up a new payment. the interest on these bonds on the due date when they didn't the last time? is this a sign that this dispute , this long drawnout dispute is over? not at all. they did make the payment yesterday. on the bonds. they didn't do it within the new. that doesn't mean the dispute is over. to indemnified for the payments before the next payments have been done.
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rishaad: how are they going to resolve this debt defaults. they will be speaking to bondholders later this month. moneyshould do have the to make the payments. they do haveit more payments due later this month. as well is in the months ahead. nomentioned they do have indication that there will be making those payments on bonds guaranteed by itv. rishaad: what is the investment community making of all this? >> they seem relieved about it. after the payment yesterday. you saw a big jump in those bonds.
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rishaad: thank you. manus: let's check in on some other the stories. has brushedd trump off his capitol hill critics on the eve of top-level talks saying he does not need help from senior republicans. he is expected to talk to paul ryan on thursday. he said he can win even if they can't unify the party. is also considering asking former house speaker newt gingrich to be his running mate. the shortlist has been narrowed down to about five or six. marco and chris christie are on the list. north korea has released publicity shots of kim jong-un. kim is the only one smiling.
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only one not wearing a pain showing his father and grandfather. of the usual signs policies of retouching the images. one official actually looks much better than expected. car bombers have killed 93 people in baghdad. it was back against bloodiest day of the year. the truck exploded near a crowded outdoor market. another exploded near a police station. attack singer the targeted the shia militiamen. most of the victims were civilians. western countries have used to to un's human rights bureau sharply criticized thailand's military government for restricting the vote and legal freedom. the prime minister accused the
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others of sedition. the justice ministry said limitations imposed since the 2014 action were to maintain public order with most citizens supportive. rishaad: it is the last day of the global finance forum in kuala lumpur. we can join our southeast asia correspondent. what has been topping the agenda there? >> islamic and biking -- a banking 5.0. keeping up with conventional banking. the dollar economy poised to be a force.
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in about 2020. it will get there if there is no reduction in the megatrends. millennials hold the key to growth for islamic banking. >> the constant of islamic finance is very sound. the idea that equal partners someone -- and equity. they get the return of the profits. >> islamic banking only 1% of overall world trade. in banking assets. all that is expected. they join us together.
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we talk about the need for innovation. are we seeing much innovation at this conference? you have to put in some kind of context. it is a bit unfair to compare it with the 400 years of conventional banking. we have to decide what we mean by innovation. if you look across the whole spectrum not only asset management but also multilateral development banking. you'll find some very surprising cooperation going on. >> is that enough? we are trying to propel the industry forward and they are playing catch-up. you are not prepared yourself whose future. >> that may be a misconception. that they are trying to be like conventional banking. there's a debate going on about the model to pursue.
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the model of trying to emulate a conventional activity was a mistake. it is a clamor for moving asset management. in terms of doing what the conventional banks are doing. produce some lessons for the conventional activities. all the excesses of the so-called bankers and bonuses. there are lessons to be learned. you say that the millennials of the ones who will be needing and moving islamic banking forward. why? >> one of the important drivers has been millennials. it is a very latecomer to
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islamic finance. last year was the first year that it happened. the local banks didn't even have windows. to provide these activities. this is what has resulted in an outflow of funds. outflow at its may sure that islamic finance can move ahead. that is one way where the young people are driving these activities. oman is potentially a new area for this. still in the scheme of things is important because there is a lot of asset management going on. >> what you think is the biggest challenge that islamic banking faces as it tries to move forward? public policy.
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57 islamic countries. part of government. nothing can happen in the market without the activities of government facilitation. whether it is regulation or a legal framework. consumer protection. it doesn't happen if you don't have the activities. forces want to cooperate. ministerr saudi publicly say anything about islamic finance. it is the single largest market in this area. it is very important that the saudi's show leadership. saudi arabia is a member of the g-20 just like turkey and
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indonesia, the other muslim countries. there was a disproportionate responsibility for public policy. it inspires confidence in the markets. >> thank you ray much. they want to create an islamic and mega-bank. reporting from kuala lumpur. manus: feeling the squeeze from the middle east, singapore airlines. fighting back. coming up after this. ♪
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manus: regulators have banded trader from working in the finance industry for six years. this for inflating the value of his trading book by $7 million. they imposed the restriction that hevestors found falsified internal records for more than 160 occasions in 2014. the northeast took no action against the former employer. has not been identified. seeking $10ranter million to develop their industry. to meet global demand.
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350,000 tons a year. to 1.5 million. iran would look to export more than 60%. delays in delivery of planes. the longest flight delhomme to australia. it will be handed over later. boeing triple seven can't be redeployed to that route. that must be salivating for you. stories on airlines. rishaad: let's check in with zurich insurance. just coming in with earnings. beating the estimates buying it hundred $75 million in the first quarter. the analysts that we had been talking to are looking for a
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lower number. they continue to drop. singapore airlines will report earnings later on. the carrier has been forced to slash fares is a trying to compete against its middle eastern arrivals. the low-budget airlines on his doorstep. we are expecting some pretty good numbers coming out of singapore airlines. above half $1 billion. there goes your low profit margin right there. it is no coin says why we see this.
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we continue to see a lot of competition coming up. from the middle eastern players. dropping 60% of the full year. net growth 41%. it is not just the middle eastern players. low-cost budget airlines are also affected. forcing thatqueeze out as well. singapore airlines has had no choice but to slash their fares just to fill seats. it out free represents the average fare paid by customers. this weekend. this is how the percentage of
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these planes are failed. we are that rise. every quarter. to about the 80% level. there is an inverse relationship here. 77% load factors all the way up to about 80% are not huge growth. they are cutting costs. /in these deals. filling those seats it still moderately up. rishaad: these numbers are coming out of zurich insurance. beating analysts estimates. about a million dollars in net income. 875 here. a turnaround stories taking place. droppresents maybe a 28% in that area. of same.the midst
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try to do to zurich insurance a few years ago what they did. better than expected. that is all from zurich insurance. ♪
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an israeli startup is trying to turn any kind of electronic device into a smart phone. elliott: is is the first product from israeli startup cap. its founder says tapping on this device makes much more sense than typing.
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>> we have invented a new kind of smart text. turn any surface into a keyboard. that is important because when you have a smart watcher and thator any other device you can interact with right now you seem to sit down with a keyboard. elliott: that limits with these devices can do. this one is easy to pick up. just minutes to pick up the basics of how to use it. a sort of benign knuckle duster. it was a tetris like tutorial that shaped the activity. each one of these represents a valve. two fingers are used for key consonants. there are 31 different taps.
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it hasn't quite mean to the world off charging cables. he offered to resign as ceo. is it wasber one clear that the market was coming. it is absolutely here. is going to be greater and greater. all the way to virtual reality. they are in urgent need for sophisticated activities. also important to turn into a platform so that others can't rush to retail. they plan tomind embark on six months of consumer testing. it is been described as the biggest ever public test. it should be in the shops by the
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end of the year. rishaad: that is fit for this edition of bloomberg markets mi
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♪ night, the dilma rousseff debate drags into another day. we will bring you the very latest on the impeachment vote on the brazilian president. the bank of england vows before the eu referendum. how will the threat of a brexit play into a rate decision? mitsubishi motors confirms it is asnegotiations with nissan, the efficiency scandal terms of the page. set to receive a 50 million euro payoff to end the deal with chelsea, six years earlier. ♪

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