tv Bloomberg Markets Middle East Bloomberg September 27, 2016 12:00am-1:01am EDT
>> oil halts its advance as more opec members back a deal. saudi arabia finds its advantage -- iran. it is getting personal, the white house rivals clash in the first debate. stiff'ssays trump people. he says she has failed for years. the clash has turned to the middle east, which trump says is a mess. the candidates fought over his proposed way to for war.
and taking a look ahead to channels -- china's single day bonanza. thes in a clock a.m. across emirate, 5:00 a.m. in algeria, and right past midday here in hong kong. welcome to bloomberg markets middle east. the state a look at of play in markets, one of the notable stories is oil, as that meeting with opec really kind of withres the supply story some possible news. ,oing to my bloomberg right now we see the uae supporting a freezing output if other nations agree. you can see where the out is , and what saudi arabia is actually proposing is that they would revert back to levels right here in january.
that is really what is driving the markets right now, when it comes to oil. the markets themselves are unsure whether there is a deal, because it has halted its advance below $46 a barrel right now. let's take a look across the region in the markets right now, starting in mumbai. it has been training for almost 20 minutes. where asiang up momentum seems to be leaving it right now, which is positive. ,he trajectory is going higher especially after the perceived may have lostump this first presidential debate to hillary clinton. in fact, we saw the strengthening of the mexican peso, which is often a barometer of support for trump, and also here in japan, in asia, we are watching the yen weeken --
weekend -- weaken. if you take a look at just how the markets performed yesterday, it was a little bit of a mixed market there as well, and ahead of this possible deal with you a east supporting freezing up of supply of oil. let's check in on first word headlines from around the world. let's go to juliet. people have been lining up to bid on twitter. disney is lining up a bit with twitter, and twitter is interested in talking, although neither company has confirmed that. bloomberg's sources say that salesforce.com is comparing a big with bank of america's help. twitter's have surged since last week, when it was announced salesforce was interested. a chinese billionaire wants chinese -- once television content.
the golden globes and other like programming. dick clark's owner is reviewing its media holdings while wanda has increased its stake in u.s. media, including the acquisition of legendary entertainment, and amc. my a drug he says the u.k. should not be granted any -- draghi says the u.k. should not be granted any special concessions. the u.k. is still exploring its options to determine whether it will be able to maintain acids in the single market. saudi arabia's the moms that internet customers be fingerprinted for identification is pressuring sales and profits in the kingdom. the requirement affects all toriers, and he also pointed
the growth on the company's finances. there has been a little bit of an impact. for our top lines and for government. our customers tend to spend a little bit and save wiser than before. from the business perspective, so many businesses might delay some of the competition and opportunities. global news 24 hours a day powered by more than 2600 journalists and analysts in more than20 countries -- more 120 countries. this is bloomberg. the first head-to-head debates with hillary clinton and donald trump clashed sharply over race, trade, and economy.
they also traded some highly emotive barred very -- bar. >> i have a winning temperament. i know how to win. she does not. i have met a lot of the people who worst gift by you and your businesses, donald. i have met dishwashers, painters, architects, glass installers, marble installers, drapery installers like my dad was, who you refused to pay when they finished the work that you asked them to do. our washington bureau chief is at hofstra university in new york for the event. been hours now. what is the mood there? what is the feeling as to who may have been the victor tonight? >> i think the general consensus in the room, and has been since the debate ended, is that while
the hillary clinton did not have as stellar a performance, clearly won this round with donald trump. she was prepared, she was even, she attacked him where it hurts. she attacked him on his business record, on his failure to release his taxes, and his temperament. she painted him as someone who lacks the qualifications to be commander and chief debt commander-in-chief. i think his campaign will be a little disappointed about how he answered some questions. the birther issue has dogged him about whether obama was born in the united states. that came up again. she was effective at framing some of his past comments about women. that was at the very end of the debate, and it will stick and a lot of voters minds. angie: one of the most important aspects of the debate is to try to support whatever perception it is of you out there that is perceived weakness. do you think trump did that? do you think hillary clinton did
that? was very effective tonight at really casting doubt on donald trump's business record, which is something he is very sensitive about and get lee when it is raised. time and time again, he gets that she brought up the businesses he built. people see him as the very infamy of success. she did start to chip away at that. of a newbe a sign angle for her campaign as polls have tightened so dramatically in recent months. not only nationally, but in crucial battleground states. figuretrump will have to out where he can really hit her. he missed some open shots at her e-mail server, and he said that he pulled his own punches at the end of the debate, telling bloomberg that he was going to wage a personal attack against overusband, bill clinton, past indiscretions that he decided not to throw in. angie: because chelsea was in
the room. yes, we heard that was a great get for bloomberg. thank you so much for being there and being here for us live at posture university in new york. presidential candidates also traded blows about america's relationship with the middle east and how to tackle the threat of isis. hillary clinton insisted that communicating with muslim nations was crucial, while donald trump had a different take on the region. >> you look at the middle east, it is a total mess. under your direction, to a large extent. you started the koran deal -- the iran deal. they were choking on the sanctions, and now they're going to be actually probably a major power at some point pretty soon the way they are going. donald has consistently insulted muslims abroad, muslims at home. when we need to be cooperating with muslim nations and with the american muslim community.
they are on the front lines. they can provide information to us that we might not get anywhere else. have: from that region, we bloomberg on the debate from to buy. what are some of the -- from dubai. what is among the key takeaways? came into the -- into focus when they started talking about foreign policy. we had some great one-liners there, when trump accused hillary of showing her cards, and hillary kind of rebutted and said at least i have a plan for going after islamic state. go talk about how she would after the group's leadership, she spoke about how they would .o after them online on the leadership, she used that as an opportunity to remind people about osama bin laden and how they took him out. trump really did not have many specifics other than going after clinton and saying you should show throw your -- never
your cards, never tell people what you are about to do. he criticized countries like saudi arabia for basically taking a free ride and along the u.s. to support them on defense. for me, it was one of the high points of the debate, and hopefully peaches a bit more prominently in round two. to frankey also had views on the iraq war. differing views on the iraq war. oil, and weken the should have taken the oil, isis would not have been able to form either, because the oil was their primary source of income. now they have oil all over the place, including a lot of the oil in libya, which was another one of her disasters. >> donald supported the invasion of iraq. >> wrong. >> that is absolutely proved over and over again.
he advocated for the actions we took in libya and encouraged that gaddafi be taken out, after exley doing business with him one time. angie: how to the candidates fare there? to respond to the clip that you just showed on iraq, i'm sure the fact checkers are going into overdrive on that one, because it featured so prominently. but was interesting there for me were two things. one, trump repeatedly going after clinton and saying the islamic state basically went from a baby under your watch to the monster that it is now, operating and all of these countries. he had her a couple of times on that point. there was also another thing that i found very interesting was when clinton said "i can build alliances, i can work with our allies. we will go in iraq within a year and take the islamic state out out there. we will squeeze them in syria,
and then in syria with the help of our arab and kurdish allies, will take the islamic state out in rock a -- raqqa." turkey's bombing a lot of those kurdish groups, so hopefully in the next and they we will hear about those plans, because that is the crux of the debate in terms of how to get the islamic ate out of s. who exec they can we work with and what alliances can we form? angie: -- angie: thank you so much. appreciate it. we have a correspondent in algiers. what is going on there? theou can probably make up call to prayer in the background. the sun is about to rise on a calm and quiet algiers, a far cry from the eve of discussion as the international energy forum convenes.
open numbers will be meeting as well. this is a critical moment in opec's history. this is a critical moment for the opec members who are grappling with budget deficits, and with pressures to get their finances straight over the coming years. we have hurdle from a lot of the key decisions that we have heard from a lot of the key decision-makers. there is no consensus, but there is more pressure to find some common ground. the uae oil minister also added that they support a freeze, but they do not support a cut. algerians are very confident that something is going to calm out of all of this. in any case, we will be looking at all the details and getting you the information you need coming up after the break. ♪
yousef: welcome back. you're watching bloomberg. i'm in algiers. angie: and i'm angie lau in hong kong. made -- maybe finding that the tables are turning. curb are now offering to action. iran is not happy. dubai.oined in what is it ran's going into the talks? position going into the talks? minister,ed to their and he was very much trying to talk down expectations. he was saying not to expect much from this meeting other than something consultant tip or advisory. meeting willlgiers
be more like a warm-up or a preamble to the opec meeting in november. i think he is trying to mute expectations of any type of agreement. angie: how are the two countries managing? who is coping better? >> people are on different sides of the fence on this. economy is more heavily exposed to crude oil .xports then iran's is iran has a. of economic recession due to periodns -- iran has a of economic recession due to sanctions. they have managed to cope with economic backdrops for some time, and saudi arabia has just been hit with these low oil prices and is having to do things like dipping to its reserves, and it has a much larger deficit compared to iran. iran has managed to ride the
local prices -- the low oil prices much more. the size of its gdp that is exposed to oil exports is much more competitive than saudi arabia's. angie: whether or not we get a deal, that is another story going on. thank you so much for joining us. joining us now is robin mills of camorra energy. looking ahead to this meeting here, do you feel confident at all that they could come to some sort of supply freeze agreement to begin with? and is that enough even, given that there is so much oil out there? think what we are expecting for probably the best case from this meeting will be some kind of a framework agreement that might then be a move toward something more comprehensive that could be reached in vienna,
inopec's formal meeting november. i think a comprehensive deal that really has teeth in algiers is unlikely. there is still such a big gap between particularly iran and saudi arabia. there will be a very wide divergence between them. this is not a formal opec meeting anyway. if there is a free steel, that -- freeze deal, then yes that whatever would be freezing at effectively high productions. immediateot have an physical effect on the market. we would have to see cuts in iran and saudi arabia, and they have started putting the idea of cuts on the table, but they are still far away from any agreements on that. assume that they find some kind of common ground and they do come up with a freeze. to what extent is the
possibility that we are seeing from u.s. crude production going to clouded overshadow any decision, because we are looking forward to official data from u.s. crude inventory. does that make a difference at all? he much so, and i think that is something that all these players are very much aware of. robustproved much more than most participants expected, and we are seeing cost being cut, and also the u.s. is starting to be banned, even with a modest upturn in prices. -- that will bring production back in the game. yousef: who is it that you are watching specifically in the opec group? depending on who we talked to some say there is a key to this
a question that this equation, and then everyone is of pump more. they say there and titles at least half a million barrels more in supply. is it really all coming together and finding a compromise? >> i think it is very much about iran and saudi arabia. if they can reach an agreement that they are happy with, the other members will not have much choice but to fall in line behind them. always and kuwait have relied on the saudi's. it is about them reaching common ground with the irradiance -- the iranians. talk to nigeria, venezuela, libya, they all have severe internal troubles, so they do not have much choice to agree with what is put on the table. the other producers are fairly small. this is a saudi-iran discussion. the venezuelan oil
angie: welcome back to bloomberg markets middle east. we have some breaking news. right after the presidential debate, we are walk jing that we are watching the next and peso gained 2%. it is set for the most gains since every 17th -- since february 17. the peso had weekend predominantly -- weakened predominately before the debate. since then, it has risen 2%.
yousef: let's pick up a conversation with robin mills. the role we look to that the possible agreement might bring out, how is russia going to position itself in all of this? they have taken a little bit of a back step, and for the most part they are watching to see what opec comes up with. could they derail the whole thing? >> pressure was a very important player in the discussions earlier this year. the discussions that ended in the heart of april. i think the russians were quite disappointed that they up with quite a lot of political capital into this to back a deal and were let down at the last moment. the russians have been quiet at this time. i am quite skeptical of the russian ability to follow through on any production freeze
or protection cuts. -- auction cuts. they may well agree to a deal. there are technical reasons why the russians are reluctant to cut their production. if most of the major opec producers -- they have a national oil company. and have a lot of state private companies operating in. very briefly, we have seen tremendous amounts of volatility in the past 24 hours in prices. where do you see it going from here? >> if i were to be bold, i think we will see a framework agreement, probably not with much teeth, but an agreement that will set the stage for meeting later in the year. oil markets will probably take that as mildly positive. right. all
angie: it is 1:30 in tokyo. gains in thele asian market right now, where we have reversed losses. asian stocks are now advancing. u.s. futures are also rising as the markets you that hit -- view that hillary clinton has emerged with the upper hand. climbing at now third of 1%. -- topix right now climbing a third of 1%.
the top stories on bloomberg markets middle east. trey, taxes, nato, and the so-called islamic state in the debate between donald trump and hillary clinton. in a sometimes heated contest, hillary clinton questioned trumps -- donald trump's is his record. the peso gained 2% after the debate, the highest rate gain since every 17th of this year. the saudie saudi back backed plan -- riyadh says it now might have a deal to boost prices, including its first out cut in years. is alreadyeady -- enjoying the end to international sanctions. nigerian the uae back
moves. the uae says it supports a freeze. other nations have agreed to roll up production cuts. accord.ll surely be on could be says the prices below $20 a barrel if no deal is reached. it is 12:30 here in hong kong. i am angie lau. yousef: it is 5:30 in algiers. i'm yousef your magazine -- >> good to see a yousef and angie. here in europe, we will be focusing in on some of the big stories you have been covering. the oil conversation yousef will be with you in algiers. we're also talking about the u.s. presidential election. those loom large in our coverage today. on the european agenda, but to talk about -- we want to talk
ghi during very parts of europe. he will be on a tour all week from brussels to berlin. he called on the eu parliament talking about the brexit, saying bet the u.k. should not given favors with siegel market axis. he is looking for something, some kind of deal that protes the european union. that is the big picture. he also says he could act in an advisory capacity. there may be a need to consider changing the regulatory network for capital markets. int is a big of a work progress for europe. he is continuing to as governments to do more on the fiscal front.
this is the we have heard many central banks, including the ecb. their meeting on september the set up the agenda, and many people thought he was speaking specifically about germany. he does go to germany tomorrow. he will be at a meeting of german lawmakers. a lot to talk about there. we also have the bank of england starting its corporate bond purchases today. that is part of the plan to simulate the u.k. -- stimulate the u.k. economy. yousef: added deutsche bank story weighing on european markets. what is the latest on that front? >> that put the health of the you -- the european banking sector front and center. it took the edge off of things there. we have a great story about how derivative tradersre aga expecting concern about deutsche
bank's weakening health. they have been pushing up shorts. of a flattening credit curve. it can be an indicator of stress. this also comes on reports that the german government would not step into back deutsche bank. that feels concerns about financial health of the bank. they are facing a u.s. department of justice bill. they are seeking $14 billion in fines. deutsche bank is saying they would not pay this amount of money. angela merkel back against the magazine report that ruled out backing for deutsche bank. will continue to get analysis and watch out plays out to the markets. angie? will be inish stocks the spotlight when trading picks up in istanbul after they
tumbled on the ratings downgrade by moody's. constantine, how did the markets react to the downgrade, and what are investors saying? >> many investors were clearly caught offguard yesterday. even though the market had started to price in a moody's downgrade after the rating agency the country on review in july, and the s&p downgraded debt, the timing of the downgrade was the surprise. i think a lot of investors were expecting an announcement to come in october. we saw the bond fell in emerging markets. stocks fell the most in july. immersing -- emerging markets currency -- demand and thee bond auction. traders sold tenure debt, and it was a most four times oversubscribed. we are seeing some people being
attracted by the high yield after the selloff. the question for many investors is how much floor selling will there be, if any? some of the biggest funds in the world require at least two of the major agencieso have an investment grade rating. after the moody's rating, turkey only house one -- only has one. the market is trying to figure out how much of an outflow that will be. does: constantine, what this mean for turkey's economy, and will the central bank keep easing? >> the question now is how will the downgrade affect banks cost. if it costs more to borrow from abroad, the ability to tackle these rate cuts to consumers is limited. meeting, it seems to be an easing policies and march.
the question is whether they will feel to keep things more aggressively, and that could threaten a weaker lira. angie: thank you very much. yousef: let's hop over to our dhabi.ughty -- abu we are definitely getting more optimistic statements compared to the doha freeze talks earlier in the year. proposals have been carved up here in what is your take on all of this? do you have a feeling that they might come out with something here? >> we don't think there will be a tacit agreement at the end of the meeting. do you have a feeling that they might come out with something here? we have seen comments from both iran and saudi arabia saying veat these are consultati meetings, that their building opinions.
you can see a lot more discussions. there appears to be more unity in the group. there has also been a change in the rhetoric, particularly from saudi arabia. the focus away from of oil policy from the end of 2014 to one of market stability. a central part of that is that a number of key opec countries are reaching their production ceiling. nevertheless, the fact that markets are expecting less output, but also there's more consensus within the group, that is providing some support to the oil price, even though the market does not expect to see a deal. perhaps a stronger statement at the end of the meetings. morgan sees a 25% chance of opec taking action this week. let's get back to the fundamentals.
toimately, is a freeze going be enough to rein in the amount of oil that keeps going into this market, to the tune of 800,000 barrels expected for this month. that is just for three countries -- russia, libya, and nigeria. is it cut that is really needed to rebalance the market? absolutely. a freeze at current levels will still need a very oversupplied , with supply possibly stronger than demand. we have seen opec production alone, about 600,000 barrels higher at the current levels than they were in the january levels. saudi arabia has for the first time discussed cutting back production levels to the january levels. that would be critical. opec has effectively throw the course of this year compensated for the loss in u.s. production
from the shale production there. at the same time, inventories have only just recently started to show some decline in the u.s. high high onemain very historic levels. those will take time to draw down, and the big question that really remains is demand. with the week local economic backdrop, especially from china, demand has been very erratic. we have seen a lot of international bodies change their demand outlook over the last month or so. they only really see demand picking up in the second half of 2017, meaning that the rebalancing of the oil markets is really coming then. especially for the remainder of this year, we expect oil prices level,in in the mid-40 and then gradually tighten in
2017 as outward supply capacity moderates in the second half of the year and demand starts to pick up. monica, give me a sense of the criticality of the situation. freeze talks, and the budget still remaining under pressure, the move of saudi arabia to cut the salaries of their ministers, do we have more of an incentive to make it happen this time round? definitely. i think what we have seen is that the shale producers have been more resilient. perhaps the market is expected oilhe beginning of this market downturn. it is just a matter of how we stabilize the market, and support oil revenue until you see the fundamentals of the market changing. as you mentioned, demand growth.
it will be critical for that. see oil prices stabilize between the $50 and $60 level, which we expect in 2017 and 2018. see veryexpect to strong fiscal retrenchment coming out, especially from saudi arabia. a very low,ad to weak demand backdrop. reforms, a pick up an oil is still very necessary for economic activity in saudi arabia to gain some momentum. we will have to leave it there and see how it all plays out. our chief economist at the out without the commercial banks joining us. coming up, we hear from one of the world's leading helicopter makers about growing demand. this is bloomberg. ♪
yousef: welcome back. you're watching bloomberg. it is decision day in algiers. angie: i'm angie lau in hong kong. .et's talk about helicopters demand is expected to rise rapidly in the coming year, driven by civil and military needs. the asian-pacific is forecast to become the world's third -- third-biggest helicopter market by the end of the stated -- this decade. looking to be made into a regional hub. do not feel the headwinds in this -- do you not feel the headwinds in this global strategy that the asian-pacific will be one of your critical regions? we are still feeling a china slowdown. what are your thoughts? >> the reason i am in singapore
is because of the maintenance repair, and you -- and a conference. it is also to cement our relationships with industry, particularly with technology opportunities that we are developing with the university. also, we have two partners supporting our commercial repair and overhaul requirements, and also cti. the reason i am here is to really make the point that we see singapore is a very key complainant -- component of our opportunities in the region. be true.at may again, the slowdown in this region is part of the broader global story where we have seen a pullback of demand for helicopters as a result of oil, as a result of global slowdown. how do you hope to overcome that? the first thing we need to do
is be present. again, that is another example of why i am my colleagues are here. i think our track record is one in which have obviously region.to focus on the yes, you are right, there is a slowdown. we have seen some of that. we felt a little bit of that in terms of about a 10% reduction in activity. but also the signs that oil companies are starting to think exploration again. that is an indicator to us that we must keep going, and we have to focus on this key market. that is what we are doing. i think the opportunity is not only an oil and gas, but in search-and-rescue, in emergency medical evacuation, and police and security, and maritime applications as an area of focus as well. we are confident that the market
is going to pick up, and that is why we are here. doubt there is also military opportunities here, especially as the south china , as ad the east china sea lot of nations contest over disputed islands. how do you see this geopolitics here in the region really fueling demand for future helicopter orders? in the maritime naval sector, that is a good indicator. if you look at our recent successes in the region, the republic of south korea buying eight of our maritime helicopters, and the philippines --y bind to come and philippines navy buying two and hopefully buy more. our products are fitting nicely with the geopolitical situation you described. angie: what about civilian helicopter sales?
i think in terms of the product range that we have, we , again very nicely, the search and rescue sector, and the police sector. our range of products, and the opportunities that the market are fitting nicely. i think we have a track record as a company of very much listening to what the customer is asking for, and being very adaptable with the sort of requirements and offers that we can provide. i think china is a good example of where we have recently been successful in providing helicopters for the emergency medical evacuation and environment. we hope similarly to be able to expand into the search and rescue world. angie: before i let you go, i have to ask you about that
pulled themer that into india. some of the investors see this as a black eye. how are you trying to overcome that perception, especially in asia? , ande basis of allegations we have not been blacklisted in india. we are a company that absolutely focuses on our obligations to meet international anticorruption standards. that is what we are doing every day, and we are focusing on the everyday. we are continuing to do business in india. we have support contracts that our current, and we are focusing on making sure we can do our best, so that is my position on india. angie: really appreciate all of that. y for you john ponsonb spending some time with us on
is a small name, but it is also symbolic of they can carry more than their weight. of course, single stays on november 11. very little ahead of ourselves. everyone is gearing up, everyone is preparing. head of international operations is telling bloomberg that there will be more merchants online this year, and they are already well ahead on the planning. last year, they recorded $14.3 billion in sales. they are saying that this year is going to surpass that. already has about 450 million users in china. basically, they are really going forward and looking forward to this one day. angie: obviously they're not entire year their on this one. what else are they doing to grow? >> jack ma once to get ollie to be the paypal
of asia. there are a number of different and a day activities to do that. m&a activities to do that. stakes in yuming foods. ahead oftrying to stay tencent. this company is being valued about 75 billion u.s. dollars -- $75 billion. no word on a timetable for that. angie: november 11, a day to watch. yousef? yousef: as time begins to rise here in downtown algiers, will be looking forward to all the meetings that opec is expected to have. again, the reality is that the
situation has changed since do theha freeze talks. doha freeze talks. analysts and decision-makers we have been speaking to firmly believe that this is all about laying the groundwork for the formal meeting later on in the year in vienna. that is when you can get either a supply freeze or a cut. there was always that off-chance, and that is why we have seen tremendous volatility in oil markets. also with the look ahead to the data out of the u.s. for the crude inventories. that is going to be a stark reminder that even if you were to cut and prices to rise a little bit, you have the u.s. producers could easily step into into thatery they -- gap. it is a tricky line that they are going to toe in the days to come. angie: that is it for us on this edition of bloomberg markets middle east. ♪ plenty more to come.
manus: it gets personal. clinton and trump doug directly tax,e directly into u.s. economy, race, and more. stocks rally yen tumbles. in the mexican peso tumbles. profitability problems. there isghi says overcapacity in european banks. this, as greta traders expressed concern over deutsche bank's weakening -- this