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tv   Bloomberg Markets Middle East  Bloomberg  November 16, 2016 11:00pm-12:01am EST

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>> oil holds around $47 a barrel and opec talks about cuts with russia. two leading critics will not be there. >> holdings of the u.s. treasury to a year low. the ipo will bring transparency and the city will have a role. victory --rump iran's recovery from sanctions. a.m. come 4:00
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a.m. in london. >> it is just gone midday. welcome to "bloomberg markets: middle east." it is a session where the markets must be questioning whether this trumpet rebound has been getting a little bit ahead of itself. -- this is upse half a percent. elsewhere around asia we see quite a bit of the selling. pressure,te a bit of pressing pause on the declines we have been seeing. tracy: in the middle east, we will take a look at the stocks we have had. it is just under two hours away from the opening of the emirate market in dubai. here is what the benchmark index closed out yesterday.
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dubai some fireworks in stocks in particular and abu dhabi, up 2% each on their indexes. a lot of that coming through on optimism about further mergers in the industry. dow was up 2.4% almost yesterday. quite a big move here in the region. let's take a look at how the rest of the trading day shapes up. in the meantime, first word news. >> boj has announced its first operation cut, and unlimited amount of bonds at a fixed rate to rein in the fastest surge in the yields since august. they decided in september they would control the sovereign yields curve. this was the first time since changed policy come up them near 1%. day,g for a temp straight
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the currency trading, 14 of 16 analysts see it weakening in the first half of next year. the latest data show china is holding, at the lowest level in four years in september as beijing ran to support the yuan. philippine shares jumped after gdp growth, 7% last quarter. it underscore the nation's resilience to global risks. he is planning a $160 billion infrastructure program. we can expect philippine gdp to expand police 6% over the next two years, among the fastest growing in the world. twoending the contract of senior executives in guinea. they are leaving. sayingued a statement,
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it is not prejudge any external investigation of the project. they said the pair failed to maintain code of conduct standards. global news 24 hours a day powered by more than 1 -- more than 2600 journalists and analysts in more than 26 countries. opec nations and russia meet in qatar today, but iraq will not be there. there on a final campaign to meet in vienna on november 30. manus cranny is there. is this meeting going to be more about who is not there? it could well be. when we say they are not trading we have to be careful. iran and iraq are not sending their ministers. there is a phrase floating about , pre-diplomacy is that full throttle.
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there potentially meeting at the a swing producer of old in a non-opec producer. it comes down to this. in vienna no deal was actually done. iran has an exemption, but they keep going. the questionnaire asking themselves, they want to get to 4 billion -- 4 million barrels a day. he is on a whirlwind tour in venezuela and ecuador and iran. he also had a meeting in london. let's put it together. have big oil and big diplomacy of opec, which leads oil producers exempt from cuts. tracy: peek diplomacy indeed.
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we have seen oil holding stable. what is the markets view of a likelihood of a deal at this moment in time? manus: we have done a bloomberg survey and analyzed, 14 out of 20 analysts believe there will be a deal on november 30. only seven of the 20 say you will have targets because former deals, real deal to make real when you have proper and specific cuts allocated to individual countries. that potentially will not happen. the market is short. the deal is not the deal that the market has. i leave you with a bat, 14 out of 20 say there will be a deal, seven say you will get a property.
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that was manus cranny for us. ipo, is supportive of the he expects to bring transparency and liquidity. it the founder talk to us about that. also, the biggest tower being built. i believe selling 5% is ok. create more transparency and liquidity, which is very badly needed. 5% or even 10% of aramco is welcomed by me. it is well understood by the business community. they will appreciate it. >> will you buy the stock when they go public, do you want to own part of it?
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first.ill go public i will do anything to support saudi arabia and the correct policies of the prince because of saudi arabia is linked to that. >> we talked about citigroup before. citigroup would love a lead managing role in the ipo. and it had a lead underwriting role in the bond sale. is there anything you can do as a member of the royal family in your support to win citigroup that lead managing role? >> i do not interfere in the politics of that. i'm a private citizen in the private sector and i never use andontacts or saudi arabia influence at all, never. it has to win on its own merits. >> you are building the tallest tower in the world. there is a model of it right here, in fact, on the red sea.
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i understand construction has not gone as quickly as some had hoped, you, perhaps. and there is difficult to getting banks to lend against it. where does it stand? >> let me correct you. , there were problems they had previously but now things are ok. we had a few months of delay. but as for the banks of that is an incorrect statement. we signed with a local bank to finance the whole thing. financing is completely guaranteed. we are back on track and going to finish in the next seven days. >> do need to scale back the project, or can you go forward as originally visioned? >> the signing of the loans, five or six months ago, they will take us to completion completely. princethat was the
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alwaleed get more from equities. it is quite tame today, right david? david: i am, and i'm quite grateful. it has been a hectic past week or so. we started to get a sense that things were coming down as early as maybe 36 hours ago when you saw more green across here. but what has happened since the itctions last week was snowballed into everything else. it hit currencies in emerging markets. -- the moneykets getting pulled into the commodities space. is awe're seeing today slight reversal as far as market equities in the asia-pacific.
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one market i want to point out is the philippines. .8%, 7000 is the level right now. we just came out with a gdp report from the third quarter, 7.1%. is surpassed every forecast from economists. that is one market to watch as we head into the afternoon session. currencies, no clear direction here. dollar will be rallied overnight. we have been looking at two straight days in asia. this is when the dollar gains traction. what we are seeing, some currencies are falling against the dollar. it is at the top of the heap. the taiwan dollar all on the back foot. if i look at the other side of the table, you have the kiwi dollar and hong kong dollar against the u.s. dollar.
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metals are on the way down. cotton and rubber, on the way up. let me run you through the charts. the 10 year japanese bond yields, coming up and using this tool for the first time since they tweaked policy in late september. we are talking about unlimited bond buying. what that means is, when you have the sharp selloff, when the reach four basis points, they basically came in and stepped in to perhaps get ahead of the selloff here. are trying to gauge and find out where the line in the sand is and what sort of yield curve the boj wants. purposes, itts and was the first time this morning in asia that we saw an yieldtion of what the curve controlled mechanism looks like because they started using that.
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watch, something to japan, one basis point above water. and something we are talking about later on, the chinese currency. 7.07, and the median forecast for the same time next year. it is that space between where the forecasters are saying the renminbi will be next year. someone has it wrong. who it is is unclear at the moment. is one ofls me that his favorite song, the space between. are looking at the chinese, the pbo see -- pboc. 7.07. trading at seven and beyond, we are hearing more about these getting checked out the window.
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david, thank you for that. later in the show, opec will be opening talks, but without its brigance -- without its biggest critic. and, saudi arabia and minister about their biggest economic shakeup. ♪
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tracy: welcome back, you are watching bloomberg, i am tracy alloway in dubai. in hongnd i am haidi kong. a story a continuing its shopping spree in north america. an office and retail tower in costown toronto caused -- them many tenants. property inarns toronto and vancouver. china's biggest
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air-conditioner maker has a $1.9 billion plan to purchase a electric vehicle maker. shareholders said the determination will not have negative effects. it does not see further asset restructuring in the near future. shares rose in the friday after being suspended late last month. has fined them for monopoly, ending a four-year inquiry. the switzerland-based company suspended -- prevented the suppliers from working with competitors. they have levied heavy fines. tetra pak says it will not be appealing the decision. in japan, a new panel for smartphones. nikkei news says it is looking into at lcd that folds.
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japan is working with a chinese smart maker on a device to be released next summer. checking shares of japan's display on-screen now, they are all up. saudi arabian says its vision 2030 economic shakeup has ambitious targets but expects any obstacles to be cleared around the way. they want to boost foreign direct investment and reduce their reliance on oil. manus cranny discussed it with the saudi arabian minister. >> the establishing division is the finish line. the targets could be very , it could begets overstretched in some areas more than others. 95% of ouring is
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resources, those have not been explored. there are so many ideas of tourism. the logistics services by the red sea, 13% of global trade comes through the red sea. we have not reached a that yet. i think the idea is not how much we achieve or not, how much we have been initiated, the areas we have initiated. hopefully we will catch up as we go. manus: what do you intend to offer to the chinese? tot are you going to offer make foreign direct investments more enthusiastic here? >> we are working long-term. the first front, a partnership directly with global strategic partners, with china, japan, usa. in america we have established a special task force, if we are
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talking about china, a higher commission between china and saudi arabia. headed by our crew. also, the third deputy from china. also, we have identified potential opportunities between the two countries. workingentified the that could be established. manus: are you ready to do a trade deal with britain after brexit? >> i think britain is a great country. we enjoy a strategic partnership with britain. we have already communicated , who was anister supposed to come here a few days ago, but he could not.
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we are welcoming a special day with the countries. that was saudi arabia's commerce minister speaking to manus cranny. of u.s.hina's holdings treasuries at an all-time low, they trap -- scramble to support. ♪
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tracy: welcome back, you're watching bloomberg. haidi: a quick check of the other stories we are following this hour. j.p. morgan chase will pay $200 million as early as thursday to federal investigation into hiring practices in china. the bank is accused of him pointing children of officials .o win there is a three-year inquiry into bribery laws.
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tencent's paying spree is hang off. they're helping to offset the slowdown in china and fuel its bottom line. however, net income was 10% below what the market was expecting at $1.5 billion. he has challenged his knee with a second project announced in a week. they want to build theme parks a similars in china, project will be created in another province. they want the same city complexes across china by 2020. u.s.'s holdings of treasuries have declined to the
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lowest level in four years. they continue to do so, drawing down to support the following -- falling yuan. frome latest data is september. time, the chinese were defending the currency from depreciating too much ahead of the inclusion. billionsaw, the $28.1 dropped down on u.s. treasuries in september from august. a pile of bonds, notes, and bills, $1.16 trillion in september. this of course, also we saw fx reserves draw down, $3.2 trillion. of course, that is off from a in june. overall, net selling around the
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world of u.s. treasuries in september was $76 billion. 21 billion was from china. japan holdings sold for a second to 1.1nd a row, down trillion dollars. in the middle east, saudi arabia treasuries fell for eight consecutive months to $89.4 billion -- u.s. dollars. i know the data was for september. but when it comes to saudi arabia selling its treasury holdings, do we expect that to accelerate with trump in the white house, and the political issues heating up potentially? >> it is in just income trump victory has been more negative for them yuan than anticipated. a lot of people did not anticipate trump would win. we see them yuan continue to weaken. we see these outflows in anticipation of a rate hike next
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month. we see more pressure on them yuan. as far as saudi arabia's drawdown on its reserve, we have had a consecutive months of drawing it down. do not see anything in the data that would suggest that is necessarily going to weaken or be exacerbated other than the fact that total drawdown globally of u.s. treasury was $76.6 billion in september. the selling of u.s. treasury's globally is continuing. tracy: thank you so much, stephen engle. ising up, we look at what casting new doubt over iran's booming oil industry. lots to talk about their as industry representatives meet in qatar and vienna later this month. this is bloomberg. ♪
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juliette: ms. the first word headlines from around the world. is sellingr prince stakes in companies such as citigroup -- citigroup and twitter. has heldtment firm city shares since 1991. it took a plunge during the financial crisis, and a rise in the years since. a key member of trump's team says incoming administration wants to fix roads and bridges. -- they talked of an
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infrastructure bank to pay for the work, something the top -- trump team says is controlled by and funded by a tax increase on businesses. is regulatory changes, looking at the creation of infrastructure bank and infrastructure investments. clearly priorities are important. also trade and infrastructure. we want to be in a position in the first 100 days we can execute a number of goals. i am focused on the policies right now. sources have told bloomberg that j.p. morgan chase will pay about $200 million as early as thursday to settle the investigation into hiring practices in china. the bank is accused of employing children of officials to win business. it has been in a three-year inquiry to find out whether they
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violated u.s. anti-bribery laws. other bank serving investigated. shares have been swinging in hong kong after a revenue rise, despite china's weakening economy. asia's largest internet company raise spending in the third quarter. competing with cloud finance and online streaming. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. welcome back, i am haidi lun in hong kong. tracy: and i am tracy holloway in dubai. the oil industry could run into a speed bump in terms of donald trump in the white house. production has increased by almost a third since january. their concern the president-elect will scrap the nuclear deal.
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we have more on this story. athony, trump's policies have tendency to be slightly unclear at times, to put it mildly. hisre now a week or so into election. are we getting further clarity on his act toward moran -- iran? >> some of his comments were very clear. he said his first priority in coming into office would be ripping up the iran deal. that is a definitive statement. other people watching him, thetor bob corker, one of iranian vice bank governors say they do not see him going that far. there is a lot that he can do that would potentially obstruct investment in iran. that could have a more aggressive a view toward iran, more aggressive rhetoric. there is a whole view of u.s. sanctions that predate this
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current debate about iran's nuclear program. those of sanctions restrict and target the oil industry, they have been suspended now with the nuclear deal in january. there are still restrictions restricting u.s. companies from doing business in iran, restricting any dollar transactions. that is still impacting the business in iran. if any of those things were tightened or strengthened, or president trump or to bring in further sanctions, those could be issues that would be an obstacle to further investment. we will just have to see what happens when he gets into office and how he does put those policies into place. tracy: a lot of waiting and seeing. comes to what iran needs to do, the measures they need to take to boost the energy industry, how could potential trump policies beat threatening
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-- be threatening that? >> there trying to get foreign companies and foreign investors in there to bring the cash that theeeded to further build oil and gas industry there and bring the new technology they need to increase production. as i mentioned, there are already those economic restrictions on their. that is slowing investment. to see notre waiting only the u.s. election, we have now seen the outcome, but we are not sure of the policies. also, the iranian election is coming up this year. investors want to see the political framework and how they will be investing, specifically to oil and gas projects. investors want to see a definitive contract under which he would go into iran and invest. they want to know, what are the rules that will govern their andstment in the country what will be the return from the?
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aside from political issues, investors are waiting for that technical and fundamental issue of the contract. that is slowing things down, slowing down investment getting into the country. and that is what is needed to bring 800 errors onto the market, so we need that aspect to get in before they can start up this expansion of the industry. haidi: thank you so much for that. unit,ergy and minerals investigation and payment with a project in guinea. this -- what is the background to this probe? >> you need a history lesson to get your head around this one. back in 2011, he paid $700 million to the guinea government to develop a project which was
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estimated to be worth about $20 billion. they became year, aware that in the lead up to the deal, a 10.5 million dollar payment was made to a consultant who provided advisory services. they said in a statement today that that transaction failed to maintain standards expected under the global code of conduct. i will be candid here. is the potential for defamation all over it. i will assume the audience is sophisticated enough to conduct -- connect the dots themselves. they did not prejudge any inquiries. the u.s. department of justice and security exchange commission, the uk serious fraud office, and here in australia, the regulator ethic is looking at that $10.5 million payment, as well. i will pick up on that defamation point as one does on
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live television. what is alan davies saying about this? >> he says there were no grounds to fire him and he is planning on taking legal action. alan davies is a veteran of rio tinto. he is the longest-serving executive and got that job just this year. he is a member of the ethics committee, interestingly enough. he says rio has made no efforts to abide by due process and respect my right as an employee. he is not alone. another executive got fired in connection to this. that was deborah valentine. shares are up in australia. tracy: we are going to stick with metals right now and get more perspective on commodities
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in general. i think we have to start with donald trump and the boost he has given to some metals, but not all of them, since becoming president-elect last week. when you look at the rally in metals stocks, have markets gone ahead of themselves, or is this a real thing? should people believe in the infrastructure boom? >> that is one of the keys of his policies. the question is whether he can get this money through over the next 10 years. we might have run ahead of ourselves, but we have also seen a huge reset in the market over the last week. i think we were too busy looking at trump is a person rather than his policies. copper, and saw in the prospective interest in china is dampening a bit. there is a risk we could return
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to the levels we broke out from. tracy: there is one metal that has not caught much of a bid and that is gold. $576w investors pulling r goldn from the spd shares, more than doubled the outflows last month. white isn't gold rallying? is it all about risk appetite bond yields? >> it is two things. the market is focusing on this dramatic rise in bond yields, not dangerous for gold, but if you do not see inflation pickup at the same time it is. is primarily a readjustment to a new situation. it is not a gold investors want to see at this stage. at the same time, the dollar has been moving up. the dollar is the biggest risk to gold into seventh -- 2017.
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if inflation picks up more than it has already, that would be supported. we have plenty of macro events coming and political risk over the next years and months both in europe and abroad. the net history for gold is not dead yet. if you look at the longer-term chart, we're still holding above levels that we saw from the brexit go back in june. haidi: we are getting lines breaking through the bloomberg, hp ceo has been speaking. the chairman saying he expects policyo moderate decisions. they say it is too early to tell. in terms of what they're looking at, demand, they have a can check to view on china growth.
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do expect the story to continue in 2017? >> it really depends on china. we have seen this big buildup, from heavy industrial metals as well. we are fairly constructive on china. the whole question remains, how much of that will be led by investment or consumer driven? the value we have seen so far is one of the best performing commodities so far this year. it is as far as we can get to this stage to see the charts coming out. we have reached a level as far as we can get at this stage. with these levels, but is good for the industry. much more than most people would have hoped for a few months ago.
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haidi: i just wanted to jump and while we were talking about the china story. weakness going to play out when it comes to whether we will see another round of gains when it comes to these industrial metals in china? there is a lot of talk that as the currency weakens it will begin for metals because you do have a speculative retail component that they will protect their wealth by putting money into these features that we have seen rally so hard this year. >> you are absolutely right. continues to weaken that will be the story. we assume of copper how the drives in china tend to drive prices too fast. and we are seeing a correction now in carbon.
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we are seeing that at the end of the first quarter when we had a big run off and several commodities. it will create demand and bubbles. there will be a lot of pain on the way for the retail investors trying to jump too fast. we will have to leave it there, great to have those insights. how they are inspiring innovation. ♪
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>> welcome back, you are watching bloomberg. i am haidi lun in hong kong. tracy: and i am tracy alloway in dubai. dhabi sovereign investment fund posted a first cap loss after its stake and credit slump. any are merging to create it
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entity with assets of $125 billion and debt of about $42 billion. they recorded a $91 million loss, compared to $1.3 billion and profit a year earlier. whichold 5% of credit, stock fell 62% in the first six months. recommends ank capital increase. the board will submit recommendations for an extraordinary general meeting in march. they will also approve a plan to be introduced. developmentbusiness needs more details, they will be released after the regulatory green light is received. tracy: saudi arabia is teaming up with china to build solar projects in morocco. construct three photo fields, combined one hundred 70 megawatts. morocco wants half of its energy to come from renewable sources
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by 2030. it is the only country in north africa without significant fossil field reserves, and imports over 90% of its energy. engaging with young people and boosting innovation have been the top of the agenda at a conference in rehab. manus cranny spoke to the u.n. minister who said the culture of entitlement may be over. >> i think we learned that from our leaders. we should venture out and focus on our goals together, not waiting for governments to provide us the job. we have the best examples around the world. [indiscernible] is that a big shift, to move the mindset of youth to no longer expect? >> delivering for yourself is
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not something new. .e see it in our leaders if you look at his life, they did it on their own. it is now our chance to face the challenges and go beyond them and achieve. there is something bigger and better than ourselves. you are the youngest minister in the world, so congratulations on that. how difficult or how easy hasn't been -- easy hasn't been? [indiscernible] >> they will be the luckiest person because working in a team, redefines the public sector. we focus on making sure every employee on every level reaches their full potential. again, we see this system of one team. today we have one team.
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manus: the cornerstone of your policy will be what? engagement. both in the public and private sectors, and meaningful engagement. , theear around the world voice of youth is important. [indiscernible] do not know if you have heard about it, it is youth circle. we have done around 20 circles in a month. we had one in marrakesh. manus: that helps you build eight plan, lifting and delivering? >> it exclusively deals with listening, to come up with transparent outcomes. ofus: to change perception the youth is a difficult thing
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to do. is that your biggest challenge? shifting from expectation to getting there? >> in our region we do not see it as a problem but an opportunity. around the world, you see them looking at the negative side. there is a lot we can do. was manus cranny speaking to the uae minister of youth affairs. u.s. president-elect donald trump meets with foreign leaders. the focus will be the future, preview next. ♪
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haidi: welcome back, you are watching bloomberg. i am haidi lun in hong kong. tracy: and i am tracy alloway in dubai.
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president-elect donald trump meets his first foreign leader on thursday. japan's shinzo abe, let's discuss that with bloomberg's reporter isabel reynolds. most important issues that concern japan and the rest of asia about a trump presidency? trump showed a great deal of concern and confusion in japan during his election campaign, firstly on the issue of trade because he has rejected the transpacific trade agreement, which is important to shinzo abe for trade in the economy. also, the alliance between japan and the u.s.. donald trump has threatened to remove u.s. troops from japan unless japan pays more for their upkeep. was already paying 5% of their upkeep. they do not feel it is a good idea. there are growing concerns at this point, those are the burdens that abe will be taking.
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tracy: what is the plan of postelection? given so many of these issues were so high am a campaign rhetoric that trump has promised to abandon? there are military arrangements -- he has said pretty, dramatic changes of position from the current administration. it will be a very softly, softly approach. will have dinner together, probably with their wives in trump tower and he will try to form a personal relationship of trust. probably not get too deep into those issues of disagreement. haidi: all right, isabel
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reynolds. sales grew faster in the third quarter despite the weakening economy and china. we have been looking through these results from the largest internet company in china. what is the driver of revenue? isabel: spending money to make money. this is what helps to feel revenue. toenue increased by 52% $55.9 billion. investing in businesses like withe finance, competing alibaba and the like. incentivesming and to help with can beating -- competing business. spending,to increase and that has impacted its to $1.5 billion.
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it has been paying off, i think. what have we seen in terms of online gaming and contact -- content? it is still an important area for tencent. they have a big following for those who use online gaming services. said online users have picked up, 100 million. gains jumped 87% in the third quarter. tencent do not have a lot of leverage in terms of a huge user base. have 647 million users. they are expanding into other areas. thank you so much, this
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is it for this edition of "bloomberg markets: middle east ." tracy:
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to purchase anis unlimited amount of bonds at a fixed rate to rein in the surge in yields since august. 10 year yields turned positive this week for the first times since that shift in policy. the pboc has weakened the yuan for 10 straight days to 6.689 to the u.s. dollar. ae currency is trading around year lows. analysts at bloomberg sea in weakening to seven by next year.


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