Skip to main content

tv   Bloomberg Markets Middle East  Bloomberg  January 30, 2017 11:00pm-12:01am EST

11:00 pm
♪ >> the trump administration demands, studying evidence of a missile launch and iran. >> gold and the yen are on the rise. yousef: kuwait plans big changes as cheap oil prompts and economic overhaul. we take a look at vision 2035 . >> the boj maintains its
11:01 pm
forecast. i am yousef gamal el-din . ahn.: i am shery we are seeing that global equity trading, andian asian currencies gaining ground .ome the nikkei losing 1.5% a very important day for india as we get the 2017 economic survey and the annual estimate this evening. losing ground,00 miners reeling, as oil prices coming down. ally, this entire week were the about central banks. yousef: absolutely.
11:02 pm
we have a big week for central banks, the fed, boj, also the brings up this conversation around policy and pressure on the u.s. dollar. let me show you a chart that tells the story. ecb tried to hike rates, but to turn a corner. this is the state of play of key central banks. the line in yellow is the fed target rate. on the fact they may not change rates, the base case expectation, but looking very carefully as to what they will possible balancen sheet reduction, speaking of possible passive shrinkage. let's speak more about rising fromons, big developments
11:03 pm
the trump administration. the white house is demanding an urgent meeting of the un security council claiming iran has launched a missile, plus facing a salvo of criticism over the presidents travel ban. ramy inocencio is watching all of this. let's start with iran. this dropped on the bloomberg has calledhe u.s. for an emergency un security council meeting on iran, a quick turnaround. few hours away from tuesday midnight. there are claims that iran testfired a ballistic missile. claims,e uncooperative but the ap is reporting that sean spicer says they don't know the exact nature of this alleged test, but they expect to know information later on. true, iranrts are
11:04 pm
could be in violation of a security council resolution that prohibits ballistic missile tests designed to deliver a nuclear warhead. in the 2015 nuclear deal, it did extend that ban for about eight years, but iran has been known to flaunt that restriction in the past. those are the facts as we know them. the phrase "you're fired" back in folk, but this time with real policy consequences. who would have thought it? >> this also dropped in the past few hours. it has been a busy monday night. folks at the white house, a lot of information and events, but donald trump saying you're fired to the acting attorney general of the united states, sally yates. she was the top holdover from the barack obama white house and the five donald trump's statement,an in a
11:05 pm
then about two hours ago, donald trump said he will let her go. in a white house statement, this is what they said. the acting attorney general has the trade the department of justice by refusing to enforce a legal order they say was designed to protect the citizens of the united states. president'said the order was not consistent with obligations to seek justice and stand for what is right. in her place, donald trump and the white house have named the easternorney for the district of virginia to be the acting attorney general, but of course, we are looking ahead to this man, confirmation for senator jeff sessions, who is donald trump's attorney general nominee. we are expecting jeff sessions to be confirmed. thank you. let's bring in tracy alloway
11:06 pm
with the middle east reaction to trumps travel ban. we know the travel ban applying to seven nations, for dominantly muslim nations. tracy: that's right. reaction weeresting have had from the middle east overnight is probably what has been coming out of iraq, iraqis parliament members urging the government to create a reciprocal and on u.s. citizens getting visas for the country. measure, butnding indicative of the emotions and controversy stirred up by trumps executive order last week. speaking of which, the other interesting thing overnight was one of trump's aides telling bloomberg television that saudi arabia could be under consideration for the travel ban to be included on that list of seven predominantly muslim nations. i don't need to tell you that if saudi arabia were included in that executive order, that has the potential to redraw the
11:07 pm
regions political lines and alienate one of the biggest allies in the region. tracy, this has caused quite a stir around the world. do we know what happens next in terms of any legal steps that could have more of an impact than what we have seen so far? well, we have seen at least one u.s. senator talking to hashliticians trying out the executive order, trying to make it less messy than it has 10. that is a whole other can of worms, but let me walk you through the market reaction here because that is what people will be focused on this morning. we had the dollar index falling .5% right after those headlines on sally yates came out. that has since pay her back its losses, but the other story is u.s. stocks, the s&p 500 falling by almost 1%, then recovering to
11:08 pm
fall by .6% at the close, but the big question investors are asking now is whether the pro growth trump hope is over. in his first week in office, we have seen him him squarely focused on immigration, and that is not necessarily what investors want to see. they want to see that fiscal stimulus, deregulation coming through, and we have so far seen very few signs of that. watch the open today, futures are pointing down. we will try to determine whether that honeymoon is well and truly over. yousef: thanks, tracy, two hours away from the opening of the emirates markets at 10:00 a.m. local time. here is the state of play, gains aramex driving gains after the bloomberg exclusive interview that moved the stock over 9%. on somelumes, pressure
11:09 pm
stocks. kuwait is aening in breather from that rally we have seen. the largest 1% drop in almost a year. still up 19% so far this year. .rofit taking in egypt a quick note on other big events , take a lookadar at turkish stocks, jumping 2.5%, the highest level since before the country's prime minister resigned last made, and also oil still trimming gains, currently down .4% after we saw the growth in the drilling rigs in the united states and concerns that the opec agreement might have needed to be more aggressive, so that is the state of play here. shery: right, we could see a fourth consecutive week of stockpiles adding up in the u.s., that putting pressure on oil.
11:10 pm
it is time now for a check of first word headlines from around the world. paying: deutsche bank 420 $5 million to settle allegations it has helped wealthy russians launder billions of dollars. the investigation relates to mirror trades handled by deutsche bank's moscow office between 2012-2014. sources say the bank is close to a settlement on the same charges in the u.k. that could be in the hundreds of millions of pounds. india, the government expects higher oil prices to drag on growth this year, seeing oil climbing 15%. other growth risks include global trade tensions and the ban on high denomination rupee notes. on wednesday.due global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. yousef: let's get you a preview
11:11 pm
of what is still too calm. investments, the chief executive officer of the firm and the company's ipo plans after a 10% jump in earnings. shery: up next, a chief executive joins us on the impact of the trump presidency. this is bloomberg. ♪
11:12 pm
11:13 pm
yousef: welcome back to "bloomberg markets: middle east" live on bloomberg tv and radio. i am yousef gamal el-din. we are seeing their regional benchmark in asia losing ground. keep in mind that markets are closed, china, hong kong, vietnam, and taiwan. let's get the details of what is
11:14 pm
moving the markets across the asia-pacific with juliette saly. is certainly risk often play, the big rise in yen and gold. safe00 futures dropping, haven assets in play, sending the nikkei down by 1.5%. profit taking coming through across the region today. have a number of market still close for the lunar new year. by .6% at thes up moment, a big surge coming through when we heard the trump administration had fired the acting attorney general. a lot of concern and nervousness about what this will mean in the markets playing out. boj of course the decision, the dollar falling further against the yen come up by .3%, 113.43. there are a few big stocks we are watching in the session. nac down by oma 16% in the tokyo
11:15 pm
session, the biggest fall in six years. this is on the back of slashing its operating profit forecast. 2%, also falling, down over a $1 billion write-down in its movie business. tus falling significantly, saying first-half profit may have a material adverse impact on its earnings, so quite a lot of weakness in terms of corporate news, and sentiment as well as investors bailing out and back into safe havens. yousef: thanks. let's cross over to one of our top stories. one of the regions owner operators of shopping malls, interests across 15 markets and employs 34,000 people. are out, revenue
11:16 pm
growth of 9%. let's talk more about the numbers and the outlook for majid al futtaim with the chief executive officer. great to have you on set. , we had the ceo of aramex on, and the question always is how consumer sentiment is holding up off the back of these aggressive, unprecedented austerity measures in the gulf, saudi arabia, and uae. 2016 was a challenging year across sectors. some businesses did better than others. majid al futtaim is a company with a solid business model. anare very proud of excellent customer proposition across our different businesses and markets, and we have been to cut through the year
11:17 pm
with excellent growth, topline and bottom line. the reality is that there are a number of to shifts in consumer behaviors, driven primarily by macroeconomics, stability in the region, and beyond, and also a change in customer spending and behavior. see in yourcan numbers that weakness materializing. it is reflected, and you are pointing to it now. give us a better sense of how extensive and how aggressive these shifts are. >> we don't see this in our numbers. we did extremely well and continue to do very well, but we are doing well in the difficult market. this speaks to the resilience of our business model and our readiness to change challenges and turn them into opportunities. we are preparing ahead. ahead of thered
11:18 pm
consumer sentiment declined, ahead of the shift in behavior, and it turned out to be to our benefit, and this will continue in 2017 as well. when you say shift in behavior, we are talking about rising e-commerce when it comes to consumers preferring the online sector for shopping. you have talked about plans to expand in this sector your what can you tell us about progress in that area? we are digitizing our business, and our ambition is to be as prominent digitally as we are physically, so this is not, this is the way forward, and that is something we are currently doing. i am very proud to say that 50% of our cinema tickets are sold online. we are doing very good progress readiness and
11:19 pm
the group is moving ahead in terms of digital presence. online sales as well as digital presence in general, because two thirds of the consumers and are part of the world browse online before they shop. shery: expanding digitally, will that mean growth organically or through mergers and acquisitions? company linkyour to others, even >> we are growing organically. the growth of our numbers have shown for 2016 are organic growth. we have plans and look at opportunities that could growialize, where we could organically through acquisitions. that is something we continue to look at and there have been some market reports on interest here and there, but i can neither confirm nor deny. much forank you so
11:20 pm
that. we want to continue getting your views on that and much more after this short break. , we willjid al futtaim talk about the travel ban in posed by trump on the middle east, also the response from business coming up. this is bloomberg. ♪
11:21 pm
11:22 pm
shery: welcome back. you are watching bloomberg. i am shery ahn in hong kong. yousef: a quick check of the business flash headlines. the maker of epipen facing antitrust investigation into whether it improperly for did competition. last year arguments over the devices skyrocketing price. whether changes to the epipen showed that from
11:23 pm
competition. making minor changes is known as product topping. lan says it did nothing wrong. a court ruling invalidated four patents on its multiple sclerosis drug. the doorg could open to generic competition for a arug that counts of 20% of tev sales. the argument was the patent should never be issued. teva says it will appeal. yousef: general motors shed its last junk rating. that is the lowest investment gm makeshat as progress while building product profile and addressing costs. in septemberaded 2014 by s&p, and moody's followed suit.
11:24 pm
shery: still with us is alain bejjani, ceo of majid al futtaim . you said you could not confirm or deny any comments on your expansion into e-commerce, but you are an industry expert. we have heard that and an indian company walked away from acquiring attractive sector for many investors, so what you seeing on the ground and what seems interesting to you in the e-commerce sphere in the middle east? digital salesand in general are on the rise, and this is a trend that is gaining momentum in our part of the as everywhere else. the middle east is an interesting market for more and more companies, global organizations. already a big chunk of the likes of owned by the
11:25 pm
amazon, so there is nothing new i would say in that landscape. the presence of global players will boost that, but i cannot comment on what is happening with any company or what is happening outside the market. you have pushed the geographic diversification aggressively in the last 2-3 years. then businesses mature and has made progress, so what is the state of play when it comes to a possible ipo? >> not at all. yousef: what about issuing new bonds? >> we continue to look at the markets, and we continue to spot opportunities. when we see a good window for us, we will take advantage of that. the key is readiness, always ready to issue at the right time at the right price and for the right terms. business course your
11:26 pm
will feel the impact of not only trump's policies and rising tensions, but also from a stronger dollar. we haven't pegged to the you asked dollar, making the uae expensive for tourists. u.s. dollar,the making the uae more expensive for tourists. >> it has been topping the agenda for the past 2-3 years, so it is not novelty, and the region has been facing economic headwinds partly because of the strong dollar, but i would say that generally the trend is that businesses and markets are adapting to that. we have faced in the past 2-3 years a number of macroeconomic , theinds, commodity prices china uncertainty, as well as the strong dollar. the strong dollar has an impact, and what happened in europe has
11:27 pm
an impact as well, so the competitiveness of these markets continues to be important. yousef: when you look at the global map, what is a top priority in your expansion plans? there have been whispers that iran is on the agenda. what are your top two countries? the uae and saudi arabia. we continue our investment plans in the region and investments in the middle east at large, so we have announced our plans for the uae, saudi arabia, egypt, as well as oman, and these are being executed. we continue to look at the opportunities around us, but until there is more certainty in the legal framework and how to do business, we continue to look with interest. yousef: the iranian opportunity is still an opportunity as it were on the radar possibly. an opportunity
11:28 pm
for the past 2-3 decades and continues to be. yousef: always a pleasure to have you. of majid ali, ceo futtaim. this is bloomberg. ♪
11:29 pm
11:30 pm
rishaad: i am rishaad salamat, and these are the first word headlines. the u.s. calling an emergency meeting of the un security council, claiming iran has fired a ballistic missile test on sunday, pointing to unidentified american officials. minister saidime and light of the launch that he would propose renewed sanctions on tehran when he meets with president trump at the white house next month. meanwhile, trump has revived memories of his television career, telling a prominent critic "you are fired or."
11:31 pm
the justice department would not defend his immigrant band. trump said sally yates had the doj. president trump's pick for secretary of state has cleat of procedural hurdle. that puts rex tillerson on track for confirmation later this week. his nomination is expected to go through, although critics highlight his links to russia and president putin. some state department staff are unhappy with the administration stance on immigration. canadian police have charged a man with the mosque shooting. he has been named as say 26-year-old student, and he was arrested at the scene. the investigator still have no motive in what is one of canada's worst attacks. police are treating it as terrorism. prime minister justin trudeau described it as an act of
11:32 pm
senseless violence. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. yousef: former u.s. treasury secretary larry summers has come out against president trump's immigration ban, calling it chaotic, costly, and counterproductive. he said markets are still working out what to expect from the new administration on fiscal and infrastructure policy. >> each market participant will have to make their own judgment. i am a bit fearful that what we are seeing in markets is a sugar high. that doesn't mean we can't go higher. that doesn't mean it can't happen for quite a while. iran the last person to claim that i would be able to time markets, but it does seem to me that there is a kind of euphoria tax policys that
11:33 pm
will past fast. i suspect that will be very difficult. ,onfidence will remain strong i'm not so sure with erratic actions like the ones that we saw. and that provocations to the world aren't going to be responded to, and i'm not sure that is a good bet either. that is not a judgment that can near-term for investing. what i think is a clear error is to confuse several months of strong markets with strong fundamentals. you know, the period postelection when markets did best in the 20th century was the herbert hoover's election and his inauguration, and of course as a presidency, that was the biggest economic
11:34 pm
disaster we had. i don't know what will happen next in markets, but nobody should be serene. on price, do think prices setting the narrative? people aret different to narratives. for many what is setting the narrative is frankly fear about what their country might become. now look, this might all get cleaned up. the new administrations always have growing pains. i think we will know a lot more a week from now when we see whether the administration recognizes that this was chaotic, costly, and counterproductive, or whether
11:35 pm
they decide to double down on and continuething to make policy in this way. i think we will know more i week from now, and that will either be cause for reassurance or cause for greater alarm. that was former u.s. treasury secretary larry summers speaking earlier on bloomberg daybreak: americas. expecting president trump to announce his nominee for the supreme court tuesday evening in the u.s.. that would be 9:00 wednesday morning here in hong kong, 5:00 a.m. in the uae here on bloomberg television. to tokyot's head back because kathleen hays is standing by with a former bank of japan assistant governor. really from the boj, but still a significant decision given the nuances
11:36 pm
related to this non-event. i think the nuances for many central banks are all about trying to look into their policy statements. we will have the press conference this afternoon with governor kuroda and will get more details and sort some of those nuances into definite statements. i'm joined by an executive economist, and he was with the boj as an assistant governor for 35 years. welcome to the show. all, really no changes in policy, the short end, the long end, a small upward assessment and the gdp forecast this year, no change in inflation forecast, did japan make the right decision? >> yes, i think so. about the upward revision, i think it is natural because we had a very good number for the last several months.
11:37 pm
the economy has picked up from the second half of last year. risk ofa little higher going forward, said the situation in the economy is clear and very good right now. glass isying the half-full because we got the latest inflation numbers and cpi. core cpi came in at -0.2. is so been -0.4, but it far from the target. as the boj really making progress in moving the dial on inflation? >> actually, i think the situation is tough. low inflation is very persistent. much, are not rising so so it is a difficult thing to change overnight. it takes time. and thatt situation difficulty come i think the boj has been doing a good job so far
11:38 pm
boosting the economy and creating a good environment for labor market conditions. i think this is the foundation for the higher inflation going forward. have any expectation or hope that there will be help for the boj coming from prime minister abe's fiscal policy or even from the unions, labor negotiations may be deciding they can go for job security and start pushing for higher wages for japanese workers? >> actually, fiscal stimulus of course is helpful, but not to the extent that inflation will be coming up. -- this is going to be the fourth year we have an increase, so that will be a good sign that we are maintaining the momentum for higher inflation,
11:39 pm
but i don't think there will be significant acceleration this spring. it will still take time, so a good year next year, and maybe spring 2018 will be better. any chance prime minister abe will ask governor kuroda to stay on. if he doesn't, what kind of candidate should mr. abi be looking for? be looking for? is one of theroda viable options, but this is all politics. in theg could happen political world, so i don't know who it will be. >> donald trump making waves after the election, there was hope and optimism, now some concern and corporate boardrooms around the world come immigration control, the execution of this policy sending shockwaves. what does this mean for the boj in particular? meeting,j has been
11:40 pm
there will be strong stimulus from the government side, deregulation, a more friendly business environment will be created. i think the boj is trying to howine what ecstatically this will be playing out and how it will affect the global economy. inflation, at some point that has an impact on consumers. meanwhile, there is a question of keeping yields low and what is it mean for pension funds. how does the boj balance this? important to have a but if prices go
11:41 pm
up prematurely, people feel worse big kos of the lower purchasing power of consumer income. hand.uld go hand in awarek the boj is well the positive negative consequences of the inflation rate. that is something we have to watch. continue toyou will help us watch this on bloomberg television. thank you for joining us. we will be going to the press conference here in tokyo, and for now, i send it back to you. yousef: thanks, kathleen. clearly a windy tokyo. let's get you a preview of what is coming up. investments reports a 10%
11:42 pm
jump in profits as it considers listing subsidiaries. cracking story, and we will look at the uncertainty fueling a lot of the decision-making. stay tuned. this is bloomberg. ♪
11:43 pm
11:44 pm
yousef: welcome back. you are watching bloomberg. i am yousef gamal el-din. shery: i am shery and in hong kong. -- shery ahn in hong kong. and saudi have chain staffing as they understand this applies to fly cruise as well. crews as well.
11:45 pm
oil under pressure this morning for a second day as drilling in the u.s. rose to its highest level in the year, countering opec's efforts to limit supply. saudi arabia says 80% of cuts have been implemented, but the isernational energy agency seeing an increase in american shell output. surging in mumbai after a merger tofirms create india's largest carrier. the parent company would have equal rights with vodafone, which wants to reduce its exposure by spinning off a business. goldman sachs says it is likely to face regulatory hurdles and the new entity would have more than 50% of the market.
11:46 pm
hasef: dubai investments reported a 10% profit boost for 2016. with a market cap of $2.3 billion, the third biggest listed on the dubai stock exchange. joining us now is the ceo of dubai investments, khalid jassim mohammad. a good to have you. the challenges are intact. health check on ofai's economy, on the state play in this part of the world, given the ongoing volatility in global markets, lower oil prices, austerity measures? >> first of all, nothing new actually. you talk about oil prices, instability in the financial markets, global markets, these are challenges that each and every company has to deal with. 2017. very positive for
11:47 pm
it bring stability. we see potential growth in the region. we feel the global economy is grow compared to the challenges are still there, but they are manageable, and we are posed for growth for the coming three years. chart: i have put this together for our viewers. they can pull it up at 4107, that is your line in white, the line in blue is the divide benchmark. you can see you would have doubled your money in dic stock. the question becomes what you looking for when it comes to your expansion plans? interest inbia of terms of diversifying away from your overexposure in dubai or the emirates? >> absolutely could we have a
11:48 pm
strong base in the uae and outside the uae as well, saudi arabia and other arab countries. saudi arabia, we have been there 50-60 years, and we do have manufacturing and saudi arabia, and now we have plans for an investment park. that is something we have established, and we will invest million to build an investment park very close to center, and we believe this is going to give us an edge for the coming few years, because that is something we know, we have done that. we have repeated this in the you and you, and we will repeat this in riyadh.
11:49 pm
does this mean the market environment is now finally favorable for you to go ahead and push ahead with those ipos of subsidiary companies you have been talking about for a few months now? actually,expanding and as you know, we have around , realmain activities estate, manufacturing, and financial services. we are expanding real estate. billion insting $5.5 the coming 2-3 years. also manufacturing, spending roughly $1 billion on new manufacturing activity, lng and metal base companies in the uae. we are going into health care, education sector, so we are growing our portfolio internally
11:50 pm
, but we are also expanding outside the uae. we think there are markets where our subsidiaries are selling products and services. we will go there on those markets and set up some of our units in those markets. shery: what about initial public offerings, ipo's? >> we do have a plan to list at inst one of our companies the dubai financial market. this company is ready to go ipo and we have done the testing, the evaluation, and we are waiting for the market sentiment to improve. i am talking about the cooling company, which has been in the portfolio for the last 15 years, and it is doing well for us. we believe we need to share this with investors outside. yousef: during the break, we
11:51 pm
were talking about the complexity of a holding company. roughly about 60 companies you are handling. isn't it perhaps time to spin off more of these companies? could we be looking at more ipos as you try to make this more manageable when investors are seeking more clarity? >> absolutely. this has been in our mind for many years. those units we are talking about are small in size. -- for example, companies withat balance sheets around 10 billion durham. you create the holding company and an ipo at a later stage. we have companies on the manufacturing side. together a few of them and packaged them, we can ipo them. we have been selling and buying
11:52 pm
companies through the life of the company. it is not something we just recently started doing. it has been in our mind. so this is our business. we are an investment company and always do that, but we went for the right time and the right market opportunity. timing is all what we care about nowadays. yousef: great having you. khalid jassim bin kalban, ceo of dubai investments. still to come, the story out of kuwait, taking a page out of saudi arabia's playbook. we will look at the latest in terms of the budget for the country. also, some lines from the indian ministry in terms of the budget and cash restrictions, saying it will recommend no restriction on cash supply. this is bloomberg. ♪
11:53 pm
11:54 pm
11:55 pm
we have breaking news out of india. the finance ministry coming out with its 2017 economic survey, now saying the goods and services and tax cuts will come from and the cash band. prime minister modi's cash band wreaking have fake on the seeking capping spending from cash band gains, and recommending no restrictions on cash supply. the finance ministry's say they will recommend no restrictions on cash supply. that is coming out after the cash ban last year. the finance ministry saying they are seeing second half fiscal year 2017 gdp understating the cash impact come the latest out of india's finance ministry. a leaf kuwait has taken out of saudi arabia is playbook,
11:56 pm
steering its economy away from that heavy reliance on oil. kuwait announced a budget for the 2018 fiscal year which starts in april. we saw a lot of euphoria in the stock market, one of the best-performing in the world. what are the most important elements and what could be driving additional momentum and a lot of these stocks? >> yesterday, the plan was , what kuwait once to do to build its economy, diversify away from oil, and try in many ways to create jobs for the young people. hey announced a budget which looks like an expansionist budget next year, so spending more on capital projects, and at the same time, expecting the oil price to range between $55 and
11:57 pm
$60, an improvement from the previous year. their budget on oil prices around $45, so quite optimistic at a time when they are committed to slashing spending and cutting costs. it there. will leave again, following the story out of kuwait. let's get you a preview of some of the key stocks you should be watching, saudi telecom, news it ill buy a company for 230 million riyals. it has been moving away from the risk-averse mentality that has dominated the company for many years, and coming on board with the 2030 vision and being creative and how it deploys the
11:58 pm
free cash flow it has. that is all we have for this edition of "bloomberg markets: middle east". shery: i will be back with the headlines at the top of the hour. thank you for watching. this is bloomberg. ♪
11:59 pm
12:00 am
of the topn update stories. the u.s. what an emergency meeting of the u.s. council claiming iran has tested elastic muscles. fox news reporting the launch. netanyahu says he will proposed renewing sanctions on tehran when he meets president trump next month. trump has fired the acting attorney general after she said she would not defend his travel plan and questions the legality. haswhite house says she betrayed the doj. the bank of japan kept stimulus


info Stream Only

Uploaded by TV Archive on