tv Bloomberg Markets Middle East Bloomberg December 30, 2017 11:00pm-12:00am EST
♪ >> you're watching a special edition of "bloomberg markets: middle east" where taking a look back on the biggest stories and interviews of 2017. the show, qatar crisis. how the bank was preparing to weather the saudi led blockade in his first intoview after it came effect. days before the flotation of thedistribution unit, ceo of ab abu dhabi's state major outlined his plans to us. and saudi's big time budget, the nation's finance manager down to me as he
set out a huge spending plan 2018. first, saudi arabia was the source of many of the region's biggest news 2017.s of as the kingdom shook things up and intensified efforts to reform and to modernize. allowhe decisions to women to drive from the exteriors of so-called theuption crackdown, nation was far off the headlines and in october it to outline world its plans for the future and show how it was opening itself up. we secured the first-ever interview with the head of saudi arabia's public investment fund. >> vision 2030, we tapped on things, one of diversity.e and if you look at our assets under management
currently, one it's mainly in the saudi economy and two it's mainly in the .onventional sectors so in order for us to have thoughtersity, we we should tap on different ofls of investments, one which is the international pools and the second thing the nextxt -- generation investments, iot, theke the science, the life the internet of things. managemuch do you now in the public investment fund? >> we're working on getting all of our books in order. in, it was -- we had assets all over the place.
had to consolidate. about, i think we're $230 billion assets under management and we think by -- by 2020 and this would announced i think tomorrow, it's going to be much more. >> way much more meaning in trillion?$1 >> no, i'm talking about 2020, remember, that's in two years. years, you cannot get fivefold. >> what is it that we're the nexthear in few days that's going to bring you up to a higher level? >> it's the investments that in.e going to be if you look at the in,stments that we're the return on investments is about like 4% or 5% with the fully balanced portfolio. that.e
but now, we're going to the different portfolios that can be yielding more than the 4%. yieldt's going to more? the --ou look at most of them are way much more -- they're private doing wayy're much better. fund, -- the vision the south bank region fund is doing much more. if you look at the track it's 44% higher up. saying that we will have the 44% irr, but above 4% you know, and below 44 would be good for us. >> so what's a realistic returns overor time? what are you targeting? to 2030, in 2025, we're targeting -- and this benchmark exercise that we've done with all the funds andpension
several world funds, and we between 4% to maybe 11%, 12% in the best cases and the different frontiers that we look at place said we want to ourselves indicating between 8% to 9%. 2030,hink by 2025 to we should be looking at these figures. much doy 2025, how you figure you'll be managing? was announced actually in the vision 2030, we have at least $2 trillion assets under management. >> by 2025, 2030? that neighborhood? you mentioned south bank. you invested, you committed in southllion bank. >> corrected. >> you committed $20 billion to black stone. those firms? >> the best thing in investments is to find the partners, right? so those are really good partners. i'm not saying they are the partners in the
world, because we are always on the search. to now, we are talking everybody. we're looking at different things. we're looking at their previous performance, we're looking at their vision and we're looking at their governance, which is very important to us because everything that we do goes through a rigorous process of governance and we have a lot of things to be looked at and all of these things have to be checked. >> so with all of the money going to have to manage, do you anticipate on other partners at that same scale, $20 billion, $40 billion, can you see that happening? >> i'm not going to commit to a number, but that's -- you look at the pools of investments that we have, them are international and four are domestic. thetwo international is international investments, which is, you know, the typical investments like, know, 100, $500 million
there, either direct or indirect investments, and then we have the megapartnerships, which is similar tohat is what we've done with south and black stone. >> how many negative partnerships? >> i think we'll continue. we'll continue and i will say why we're doing it. it because once you go big, you can't change things. only you're going to be a passive avestor, waiting for like passive financial investor because this is something that we don't want to do and the termsk at that we have with south bank, or black stone, i changing even the g.p., l.p. relationship. we're not coinvesting with g.p. and at the same time, we're not -- we're
somewhere in the middle. we have veto rights, we have opt out rights. we have all kinds of things. we have people sitting on the advisory boards. so we know what's going on. to we have the right vote more governance into the relationships and the partnerships that we're in. >> it sounds to me that's the kind of thing you want out of future partners as well? >> absolutely. more of a priority for you than the smaller investments, the 50 to $100 million investments that you described? these megapartnerships that are measured in the billions? >> we do have some subsidiaries of ours who are this, like -- they're looking at everything and the agriculture investments so at these kind of items. describedh -- you six different buckets into which you put investments, four of which were domestic, two of which are international. of the total public investment fund, what percentage are you
dedicating towards international and what domestic? d to >> currently we have 90% local domestic and less than international. the deployed investments. will think this number continue, but remember, we will have cash inflows coming in. so we're growing our portfolio. and that's one of our objectives actually, is the of our portfolio. 2025, maybey between 2020 and 2025, the percentage is going to be coming up and the international from 10 to less than 10 to 25%. cashd where is that coming from now? we know that you're going to get some money from the iranco ipo. >> it's a good start. that's what we're doing. look at the investments that we have today, it's basically all
liquidity. we need to look at, you know, leverage and that's is doing.body it's going to be limited to same things that we're in so if we're in one can use the as a base project for the leverage with no the -- to the rest of the portfolios. >> and how do you plan to lever up? much leverage are you comfortable using? hired atually just new head of treasury and corporate finance and that's his mandate. he's coming in, he's going to be with us i think in the a month oraybe so and that's one of the questions that we'll be and hopefully, we'll have a better answer then. >> at the moment, though, do to lever you want up one time, two times or less? think it's going to be
way less than one, yeah. neighborhood then? >> we're still working out our strategy, but it, butally we have the numbers still here to come. >> and that's with the returns? improving >> absolutely. >> you've also made investments in individual just in saudi arabia. >> correct. >> but outside. uber, for example. are you going to continue doing that kind of thing? >> yes, yeah, we will. thatnot only uber we've done direct investments. we've done it in south korea, epc, we have 28% of didn'tmpany, but it get the media attention that uber had and it was a item.cket it wasn't small. but i think we will if we see good opportunities, definitely. have a good process and governance and process
is around people. so our -- the number of people, 2015, was less than 60. today, it's above 200. the cominghin two years it's going to be 500 and maybe 2025 we're 1,000.o be over so the number is growing and we're bringing all subject experts in addition to the advisors that we're working with, they're just, you know, the best of the breed of advisors from all over the world, from saudi, countries, new york, everywhere. so if you look at the brain muscle power that we have, it's really big. but at the same time, we said -- e.r.a. not going to go to the direct investments until we are more comfortable. so two big companies right now is enough, but i think seehe future we will more. >> we'll have more from saudi arabia next as i hear kingdom's finance minister about his ambitious spending plans for 2018 and do withintends to
♪ >> welcome back to the best of "bloomberg markets: middle east" 2017. we hearde break from the head of saudi arabia's public investment fund speaking in his interview, but less than two weeks after that conversation, the kingdom rocked regional markets when it arrested dozens of the nation's political and business elites, including high-profile businesses. saudi budget in december gave me a chance to get an update on that situation from the country's manager, mohammed al-jadaan. but i began by asking him for more details of the ambitious 2018 spending plan.
think today an historic kingdom.e it's one important step toward reaching our target the 2030 vision. i am very happy, very excited about how the was able to perform last year and the we came about to reach today and announce next year. i think the growth next year positive. very to growt the oil north of 3%. expect the gdp to grow 2%.h of there is a lot of momentum, a lot of positive sentiment place. taking there's a lot of capital investment from various sources. the government through the budget is spending
significantly more than ever on capital investments, $200 billion, but also development funds are invested. >> in terms of -- you're not going to give me an oil price. >> we don't actually speculate on that. >> let's break down your debt salesr because that's been important. how much of that is going to be international and how that is going to be domestic? in the past you've liked to up a little bit. >> i think the debt strategy for ourimportant country and in saudi, we are taking quite good steps in the last two years, in particular the last year, to establish a proper strategy how we are going to go about approaching international and local investors in oil, coming up with the right strategy, coming up with the right mix, local and international. we don't obviously want to cause any liquidity issues. mindful of the
liquidity situation and don't causet we any issues. we are also looking at the market and we are looking at various opportunities around the countries,arious various times. >> the other thing to look out for in 2018 is the probe thattion is under way. our reporting suggests that you could recover something ofthe vicinity north $200 million from some of assets. is that an an accurate estimate? is that a range you've heard seen? >> i think the attorney clearl made a very statement, that what they of is in the region of $100 billion. what is going to be recovered is a matter for settlements taking place as announces ory
the court ruling for those settle,se not to but go through the court system. this takes time. i don't want to speculate on and iic numbers really don't have any specific information as of are we talking about in specific in the years to come. how that money will be spent and allocated once it's recovered, that conversation hasn't happened either? is part of the treasury. it has been taken from the treasury, it should go back to the treasury. that fund will be part of what we allocate you maybudget and have heard it said that the spent on healthcare, education, other services that touch the people. so if we recover, it will go treasury. >> the other factor that could play into the budget for 2017 is an ipo of saudi aramco, a decision with the shareholders and the
company, but in terms of the listing itself, could there be a listing only on the dow? single listing here in the kingdom for now? his royal highness the crown prince, company,man of the the minister, the ceo of the company have each -- and i myself, have said that the ipo is on track. oure still selecting options. to dow only is one of the options. ruling out any of these at this stage. we are going through a lot discussions, what is best for the company. ipo.is not a normal this is an ipo of the world. so one would need to make sure we don't leave any stone untouched and unturned to ensure that we're doing what needs to be done to choose the right thing. >> up next, better together.
about the relationship sabic been nurturing with other firms, including saudi aramco. is the besthis formula for sabic to take advantage of, to achieve globaleally a strategy. if you look at this year, we ave been able to make major announcement about three major projects to support our growth engine. the first one was saudi aramco, the project for oil the second and one is with exxon mobil in the u.s. for leveraging the gas revolution in addition to one of our also major transformation in terms of stock options going into chemical in china. these are projects that are going to fuel the grouting of sabic. going into 2030 vision, has brung this transformation into a level where sabic is going to leverage the 2030 vision and play a major role it. >> one of the relationships you've been strengthening is
relationship with saudi aramco. both sabic and saudi aramco are hugely interesting for foreign investors, as well. how is their relationship going to intensify, especially when it comes to the oil to chemical plans technology, how soon is it going to be developed? a well, i think this is very strong strategy where will and aramco leverage their competency. aramco is one of the best and number one oil companies has a very strong refinery background and sabic is also one of the leading companies of petrochemicals. the oil tc will bring both comp attention into a level where we can complement each other and i'm confident that the project is hopefully by of this year will be able to really sign the j.b. agreement and take it to the next level. this a way perhaps as well that cooperation, a way fromotect yourself volatility in commodity pricing, especially oil prices? >> i think from sabic's perspective, of course oil
prices always have an on our industry. but we have diversified footprints, sabic right now has assets in europe, assets andhe u.s. and china sometimes, when the crude oil price is down, therefore get into a point where we want to make sure that sabic its riskng portfolio globally to provide the right return for shareholders. that's not only the objective we drive and also if you look at sabic's portfolio, we strengthen our business on the specialty specialty has less implication on the crude oil price. us to giver for our shareholders some stability. >> that's a key point because oil price volatility is a major risk for sabic. are you confident that oil prices are going to be more stable in 2018? thatll, if you know please tell me, but the way we look at long term at
expertased on the view, the oil price will remain at least in the 2018.t level for but let me just highlight very important elements for us in sabic. those external factors, we try to analyze them, but we cannot predict what the crude oil price be. what we can predict, what we can control how can we make our plants reliable? how can we bring a differentiated product and solution to our customers that can bring higher value for our company? >> up next, qatar crisis. hear our interview with the head of the middle east's shortlylender from after the saudi led blockade had clicked in.
>> welcome back to the best of "bloomberg markets: middle east" 2017. majorratories this year was the isolation of qatar in june. saudi arabia, the uae, bahrain and egypt severed relations and closed off accusing routes, them of supporting terrorism. to the qatar bank ceo. he told me diversification meant they were in a good position to weather the storm. this opportunity as we plan. we have put a plan for the end of the year for six to and we don't see any changes from that level. as you know, you know, we a very, very well diversified situation.
in 31e businesses countries and our diversification is really helping to overcome any crisis. theive us a sense of scale or the extent of disruption from where you're of the in terms plans that the bank has and also in terms of the revenue stream? >> as i said, we are diversified. we have, you know, businesses in 31 countries. our business northeast as well as in asia, in europe, it's contributing. qatar is also the biggest contributor. last year, qatar was 63% of ourg profitability bottom line and 37% was coming from international. our plans for the 2020 to reach 5050 and we don't see any changes. we see more contribution coming from the international. we're not dependent on any
economy. qatar will be the driving engine even going forward. time we spoke, you were very bullish when it expansion in asia and africa, as well. with the gulf crisis, is incentiveditional for you to be more aggressive about that expansion? to push harder into those markets? >> our 2020 strategy is depend, you know, to become a top layer among the middle africa and southeast asia and we don't see any change in that strategy forward. the strategy just to recap, aroundw, it's built two pillars. organic growth as well as leveraging the network. existing network. opportunistic, we're not actually looking for acquisitions as we speak, but we are very should there be any opportunities
arising. in terms of the second pillar, which is leveraging existing network, we will be expanding within the existing geography in terms of an organic fashion so we outbuilding two branches, opening one more branch in kuwait. month, we will be establishing our business branch infledged india. we're going to be applying for a license in hong kong, a full-service branch license in hong kong. in china we are changing to a full-service badge so we will continue with the is.tegy, you know, as >> your focus on your strategy and you're saying there ifs changed at all, but you've got a reality on the ground in saudi arabia and egypt as in this latest political dispute. how are you going to reallocate resources or reprioritize a little bit, refine your strategy to adjust to what has happened
there? >> yeah, well you know, it represents less than 5% of sheet.ance the impact we see is very little, if any, for our going forward. and, you know, i mean, we're going to be pushing more in asia, but as we see, even if the situation forever, you know, to diversify 5% is so easy take so not really much. >> what are your funding or financing plans for the remainder of the year? will it see some of the bank rates move higher a little bit across the region? how does that change the theing strategy for bank? >> yeah, the cost was a high which was a result of the rate increases andh happened this year actually started last year and this year. so in terms of like going back to our numbers, you in our first half
numbers, our net interest of 5% showed a growth after the delusion o dilution oe itself sourrency we are continuing to grow and the reason for this, we our assets at the same speed as our liabilities. in terms of any abnormal this.we didn't see again, we are diversified. we don't have concentration funding book anywhere. we get our funding from qatar mainly, from u.s., from europe, from asia, from the middle east so we are very much diversified and we don't have the concentration and we didn't see any abnormal increase in cost. me remind you in qnb is a double rated lovetution, investors the qatar story and they continue to do so. >> just on this score so you don't have any plans to tap the international debt market; is that correct? >> well, you know, i mean, program,n emt
$17.5 billion and probably we have only used half of this at this stage. so still have a big room to move in this area. however, if you noticed, qnb we have been in the past, opportunistic in terms of tapping into the market get theight time to right size at the right price. the last time we tabbed into was about three months ago and should there be an opportunity in terms right moment and the right price we'll do it. are -- we see ancase we opportunity. step awayto briefly from the gloom in this part of the world off the back of the politics and what still excites you in terms of a bright spot on the international international map for qnb? if you had to pick one are veryhat you bullish about for the remainder of the year, which
one would it be? have a, we don't country in specific and we're not actively looking as we speak. however, you know, you can look to the region, the whole region. this is the region, the play field we look, we intend to play in. so should there be an and again, you know, we are very opportunistic. if you noticed how qnb the past in terms of like acquisitions, we are being very opportunistic and the right moment and we are not under any pressure when it comes to expansion, and organic expansions. >> qnb is the biggest lender worlds part of the and i want to capitalize on that and get your top line thoughts on how confident are that this crisis is going to be resolved any time soon. >> well, you know, this is to comment on, but i can tell you one thing. and wevery strong are prepared to work even on
a stand alone basis. a very strong economy, it is the richest economy in the world. reserves, $340 billion of foreign reserves. qnb, we are, as i said, we have a very strong story in terms of like, you know, side andthe one also being diversified on the other side. a veryan, we have strong and bright future. worldnext, as the waited for details on the saudi aramco detail, abu dhabi state's owned oil it with ants offer of its own.
>> welcome back to the best of "bloomberg markets: middle east." another of the big themes listing ofas the the middle east violent state owned oil companies, world prepared for the saudi aramco, abu dhabi actually did one of its own as it floated adnoc. shortly before it did so, sultan ahmed al jaber spoke exclusively to bloomberg. least 10% of the to float onan the market. we might go a little higher, on howll all depend we progress with the market over there next few weeks. particular a evaluation that you're targeting? >> not really. what we want to do here is domestic a very unique in floating first of the regiono in and what we're trying to achieve here are numbers will show an
unprecedented commitment from the international market as well as other local and domestic investors to work alongside adnoc and its very important subsidiary companies. note, there are rumors that you might look to float other businesses. what else might be in the pipeline? >> we are looking for ways to maximize value to our keepingders while adnoc wholely owned by the operating government. having said that we will be looking and exploring across the whole value chain with the main focus being on companies. >> now, you keep ruling out a listing at the holding company level. then, you did it earlier today during your speech. why is that because of course, you have a neighbor just across the border that is listing at the holding company level? >> simply because we have had some incidents in the people thought that we were insinuating that adnoc would be floated on the market, which is
absolutely incorrect. what we are considering are floating subsidiaries that are owned by adnoc today. >> could you potentially get ine strategic investors as sort of cornerstones for the listing of the distribution business? >> absolutely, we always look for strategic partners, those will bring value, those will bring assets to will help those us grow in a smart way. >> the other thing i want to theabout is, of course, partnership process. how are those discussions with potential partners be yourd who would ideal partner? >> again, the criteria is very simple. a very rich, sound track record as far as to attract strategic partners and here we will apply the same methodology. we look for partners that the same values, that have the same vision, who are actually looking at this a very positive manner and that will bring value and access to and access to markets and also help us grow in a smarter way as provide a platform to upscale our human capital. >> would that include some
producers, for instance? >> we can't rule anybody out at this point in time. >> all right. come toce you've adnoc, you've announced a huge, huge transformation of the business. us through your strategic vision for the company. in 10 to 15 years' time, it going to look like? >> adnoc has to be the veryr one most agile, flexible model national oil company. meaning we know that we thet have control over price of oil. thatwe know for a fact we can control the number of barrels we produce so our been centered around efficiency and the optimization of our facilities across the whole value chain and here with athnology being advanced this very high speed, we have to adapt to the changes, to the dynamics of while we're also wary of the advancements in technology and see how can
the mostate advanced technologies in a way that will help us be more efficient and more profitable across the whole value chain of our business? >> now, part of the transformation included the entireiew of business, upstream and downstream. what did you learn from that review? learned that adnoc has a rich track record. partner,a reliable is a reliable supplier. adnoc has been able to best partners from all over the world and that must continue. we engagethe way and as such we launched our strategic partnership model whereby we expanded our scope, catering for all upstreampartners, investors, middle stream our downstream investors with a real focus on the downstream opportunities. as you know we are expanding our refining capacity. we are adding another 60%, at least to our current arening capacity and we tripling our petrochemical
capacity. in order for us to do this smart way, we need to be open as far as our financing mechanics are concerned. we cannot continue depending on our cash flow for oil operations. we have to be smarter on how we better manage our cash and as such, we are engaging with international investors as well as with sound, financiers all over the world. >> right now, you mentioned the financing. you did, of course, just sell your first bond. that's a huge departure for adnoc. tough sell to the emirate population? >> this was a great signal a very positive ripple effect on the domestic market. demonstrated a unique capability of adnoc is to what extent adnoc actually going to go as far as its transformation is concerned. so it had a very positive impact on the market locally and internationally. >> i heard demand was very,
very high. high, absolutely. it was almost four times the projections. you also have a bid out or a tender for a loan. is that close to closing at point? >> that is, in fact, very close to closing, that's true. >> okay. optimum sense of the capital structure of adnoc? where do you want to go with it? >> we want to be a very sound, financially robust managestion that its cash and cost of money in a very smart way. is going to grow and is going to grow in adopting approach with international partners so we have to adopt a model that allow for international investors as well as financing mechanisms that us tollow for increase and enhance our cash tod free up fund our sustainability for our organization. to fund your growth. does that mean more investment and if so, what
kind of investment, what areas are you looking at? >> adnoc will soon be announcing more details about its capital expenditure program for the next five years. will clearly show where adnoc is going. adnoc finds the industry to very strong. we have a very positive perception of the future of such,dustry and as adnoc will be investing in the upstream, midstream and the downstream. of the future of the industry you said before that you're looking to the east in particular as an area of potential growth. is that the case and how big are you going to go in terms asia? >> as far as asia is concerned, we find it to be a promising market. market that has clearly shown tangible such, we would like to continue our toplies to keep flowing asia with also a new consideration whereby we might be considering our own investments in the downstream business in asia,
meaning more refining moreity or petrochemicals. >> now, everyone i've asked onet you always says thing, which is that you are a target oriented person. when you look at the of adnoc,tion what specific targets are you looking at? how will you know that the been armation has success? >> we have set our own targets. to some it might sound ambitious. we know with our and with the support we have from our leadership, those targets will be definitely achieved. as?uch give us an idea? >> i can't specify our targets. oilhat about the 70% recovery rate from new projects? is that still a goal? >> that or 30% and the of our drilling costs, our drilling time. again, these are targets information.ic but in terms of our real gpi, our transformation is concerned, i find this to be more confidential, internal numbers. >> okay. how important is the transformation of adnoc to the wider abu dhabi economy?
because, of course, abu dhabi is attempting to attempting to change in response to this era of low oil prices. >> what i can comfortably tell you is adnoc continues to be an integral part of our oil economy and the fact adnoc is undertaking positive holistic has made a positive effect on the economy. to adnoc.e thereen energy part of story as well? >> i think it's worth noting that he started my whole adnoc.in and then i moved to help establish our renewable energy arm for the government and that was a experience. in our view, renewables any wayes not in act as a threat. step for aural
major oil producing nation to produce. >> and lots of other oil are doing the same thing. >> absolutely, but remember at the time when it was launched, this used to be a paradigm shift, used to be seen as a paradigm shift for oil nation to proactively seek renewable. adnoc, could it be part of the story there as well? >> adnoc must be focused on oil and gas while the sister can continue its pursuit. >> i'm still trying to get a vision ofyour adnoc in the future. when you look at the theting landscape of energy world, is there a particular company that you like would like to be that one? >> what i can comfortably want to be an integration of a number of see today. i don't want to name or be
specific of which ones, but it's going to be an integrated model of what some of the companies are operating like today. >> up next, trump on tour. the president makes saudi his first foreign destination since coming to power, bringing with him some of america's most business leaders. we hear from j.p. morgan's hise diamond about plans for the region.
including the jpmorgan ceo dimon. he sat down in riad and spoke about his plans for the bank in the region. >> well, jpmorgan has been here for 80 years so we've both theing in government, the kingdom itself and a lot of the companies here for the whole time i've been here and way that. so they're having a big forum now as you've seen by the government enhanced business to enhance its relationship with the states, the president is here, the president and the king here together today so by joined to be part of this here. >> how much bigger with your the middlein east and saudi arabia get? >> my first trip here, we was oneperson, it receptionist, a female, now, we have 80. womenk almost 30 are by the way, including several m.d.'s, including that woman who was the receptionist the first time and we're part of the banking system here, we're part of the brokerage system here.
we bank with a lot of big companies and we bank with governments so we'll be over time asr saudi arabia and the middle east grow. >> you do a lot of bond sales for them, as well. a difference if the 2030 vision works out? about $27one billion of bonds for both the government and we do it companies. their the vision 2030, every country should try to have a develop itself over time, how it improves its businesses, the lives of the people. a big difference. if they succeed, it will be good for the people here and good for the business. >> jpmorgan has the highest market share in its history in deposits, ficc, equities, grow further? >> we're certainly going to try. answer is the yes, some i do think it's high and shouldn't be expected to continue forever. the world is going to double in size in the next 12 or 15 years. there's plenty of threats. competitors around the world. but, you know, but we spent
a lot of money on technology, we know what we're doing, we're operating we helphe world, the company grow around the world. we're going to twice as fast market,eveloped we're pretty comfortable about our future. >> can you break down the tots where you want defend your market share? growwant it to everywhere. and clients want multiple vendors and suppliers and completely understandable so publicly, investment banking in certain areas it may be gain share, but that don't mean we can't gain share in this country or that part of the world. haven't given up gaining share. it's going to be a little bit harder. >> and that's it for this edition of "bloomberg markets: middle east." what will 2018 have in store for the region? to wait and see, but we'll be right here, of course, to keep you up to date and we'll be back on january 2nd. until then, happy new year.
julie: from new york city, i'm julie hyman in for jonathan ferro with 30 minutes dedicated to fixed income. this is "bloomberg real yield." ♪ julie: coming up, we look at a year ahead in fixed income as investors prepare for a new fed chair. tighten your seatbelts as the yield curve reaches its flattest levels since 2007. it's the last trading week of the year. we review the year that was 2017. we start with the big issue issues of 2017.