tv Bloomberg Markets Middle East Bloomberg December 7, 2016 11:00pm-12:01am EST
♪ >> a big surprise from china. it is much stronger than expected, exports and imports of both being forecast. >> the worst may be over. shares build on the initial gains across the asia-pacific. >> oil hold around $53 as the focus shifts to whether opec can persuade non-opec members to cut. >> this industry is bracing for its worst year in 2015,
collateral damage to train the glued -- cut the crude. i am angie lau where it is just past noon. welcome to bloomberg markets middle east. one notable thing today is absolutely with the markets are doing, extending the rally. especially after the china trade data rolled through, we have exports, imports, both up and better than expected, surprised to the outside. on the other side, what is supporting the markets, trump. trillion, that is the number on my mind this morning. that is the market seeing this on this chart. fresh out of our bakery, this really tells the story of donald trump and the u.s. election. you are looking at the combined value. this is a month since the trunk win. -- trump win.
a billion dollars into the market since december 6 -- november 6. said, they are extending record highs both from the s&p 500 and dow jones. bankshares, some of them at eight year highs. angie: it is, banking stocks rise for a third day. let's get a look at the markets. mumbai has been trading for three minutes. begin to watch this fight sensex.these two on the hang seng extending gains as well as tokyo on basically deflation there he expectation from donald trump. expectation from donald trump. >> this was the state of play in abu dhabi. it was mostly a brighter picture
, dubai gaining 1.25%, gains in abu dhabi. trading in saudi, petrochemical stocks under pressure with the oil price in the last trading day. and in saudi, coming under quite a bit of pressure after the ceo designed for personal -- resigned or personal reasons. more foreign interest in egyptian stocks after the government finally pulled the plug on the support for the egyptian pound, letting the currency take over. let's check in with first world headlines, here is sophie. >> thank you. official has agreed to sell its stake in rock ness to glencore and what is the biggest ever privatization. they will pay $11.3 billion for 19.5% of the company, taking equal shares. russia is trying to raise cash after the collapse in oil prices .
japan unexpectedly cut the reading of third-quarter growth to 1.3% down from a luminary measure of 2.3%. -- preliminary measure of 2.3%. this is the first time japan has used a new method to cut you late gdp, helping to bring shinzo abe dozer to his goal of boosting growth to ¥600 trillion. parcel jordan has won a victory -- partial victory over usage of his name in china. he has the rights to the characters that have translated name intoters -- characters in chinese. star has sued a company selling sportswear under his romanized name. there is a motion to impeach president potts today. her40 page document accuses of bribery, abuse of power and
violation of duty. it will be brought before the is national assembly in time to allow vote on friday. she has apologized for the undue scandal and will accept parliament's decision. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. reboundedna's exports in november as demand held up and the cheaper yuan boosted competitiveness. we have tom mackenzie standing by. let's go through the details here. tom: i am surprised. want to focus on is 0.1%, does not sound too glamorous. it is the increase for november year on year. incompares to a drop of 7.3% october. prior to that, exports were down. and so that is looking very healthy. why is that? the yuan is trading at an eight
year low against the dollar, appears to have fed into the competitiveness now, increased competitiveness for china's exports. they are facing challenges. wages, lettingr them struggling to make money. -- leaving them struggling to make money. global demand and household, you see the uptake in the u.s. handheld -- household in spending power, that played a role in this as well. we saw exports from korea go up in november as well. no great surprise this is positive, but the extent to which it has been forecasts is a surprise. 6.7%imports, they came up in november. that compares to a drop of 1.4%. stocking up on commodities, crude, oil, coal. that is infrastructure spending we have seen here, putting it
into railways and bridges to underpin economic growth here. it is positive for export numbers and 0.1%, surprising many. you mentioned the weaker you want. what is the -- yuan. what is the policy response? tom: these follow on the positive pmi manufacturing data we got for the month of november as well. what it feeds into is this support level now that havedency -- policymakers two pull out of the system and drain liquidity and economy without undermining growth too much. we are still on track, to hit that target of 6.5%. it would be a great surprise if they missed that. most analysts expect the pbs you to step up tightening. he is -- it is already doing
, with the drawing some of that liquidity, so it gives them extra confidence to do that. there will be pressure from lobbyists with the export center getting cheaper yuan, the benefit of that already. the focus is very much on capital control, trying to stop the outflows. partt numbers show the old of the economy still growing very strongly here, manufacturing and factories, does not say much about the rebalancing china has focused on, but they will not sniff at it. it allows them to pull out liquidity going forward. let's carve out the story and get analysis. we have the chief economist at emo global asset management great to have you. you have seen china data. this is good news for the global economy. isit is a sign that economy
healing. we have had a week time for industrial reduction. china has tried to censor this, so it is a sign things are looking better. yousef: it be expectations by quite a margin. could this just be a one-off? at the you look year-over-year figures, you are always conscious there was a great time of weakness, and as that passes, you see the year-over-year continue to improve. the main thing when you look at month on month is what is happening to global inventory, and companies are beginning to build up stock, increase inventory ahead of expected sales. consumers demand has been fine, stabilizing. things are on balance quite a bit better. i want to ask you about another export inflation here from china. we have a weaker yuan, but on
the other hand, we are dealing with higher commodity prices. how is that going to push into the global growth story? >> i think the rebound in commodity is from low levels. the overshot on the way up and the way down. as the global economy proves, iron -- improves, iron ore of which china is the dominic consumer, they pick up as well. it is good inflation, reflects increased economic activity. the broader issue for the developed war -- world anyway is the extent to which you get domestic generated inflation. there are signs of that in the united states, that is why the federal reserve might raise interest rates asked week. so the overall pattern, deflation bad, small inflation good. we are only at modest levels of inflation. china had a problem for years
ago, but does not have one now. there are headwinds not from china but from europe. stay right there. we will get back to you after the break. stephen bell, chief economist at vmo. let's get the latest from haidi lun energy has got the latest. haidi: i want to do a quick check of the aussie dollar, because this is one of the proxies that can react dramatically to chinese dollars. we had the export-import numbers , much stronger on yuan terms as well as dollar terms. that is very good for the australian economy, given it is the number one trading party when it comes to australia. $.74 97. we are seeing a little bit of stress, this is from the aussie today, but holding up strong despite the australian trade data today on the back of the gdp contraction yesterday, which
was the worst in almost eight years. looking very nice with shanghai against [indiscernible] when it comes to mainland markets underperforming pretty much all the way through this. trump trading enthusiasm, the record close on wall street, the 12 record close when it comes to what we have had since trump being elected. also some anticipation that the ecb, mario draghi, will follow through with asset purchases. that is what the markets are expecting. some of the strongest gains from australia. sydney up 1.25%. the miners are saying they are overweight on minors and financial in australia, and some banks and mining companies are doing well. , a weaker is up 0.1% yen that is listing things, and ,he kospi very strong session
up to 1.25% ahead of the impeachment vote of being taken in parliament tomorrow. southeast asia seeing nice gains . oil is back on track ahead of the opec and non-opec member meeting. we are seeing energy names doing nicely. one in the region is health care, tracking losses in the u.s. overnight with donald trump expected to cut down when it comes to pharmaceutical prices. that is seeing danger in this part of the world. yousef: quite a positive picture. let's get a bit of a preview from what will come. we will discuss how the merging market outflows are affecting banks in this part of the world with the head of tyler's biggest commercial lender -- thailand's biggest commercial lender. angie: watching for mario draghi. this is bloomberg. ♪
yousef: welcome back. we are lies in dubai. this is bloomberg markets middle east. you are watching on bloomberg tv and bloomberg radio. i am angie lau in hong kong. we are seeing market ahead of the final rate of the year, we have matt miller explaining why any decision to extend quantitative easing will be closely watched. matt: investors are counting on the ecb to follow through with measures to maintain substantial monetary support for the reason -- region, but if mario draghi does not meet expectations, there could be a selloff in equities. most expect super mario took prolonged quantitative easing at the pace of 80 billion euros or $86 billion for another half year. other than the key measure of disappointment will likely be
the single currency itself. in december 2015, mario draghi said officials will do what we inflation as quickly as possible, building expectations of a stimulus package on its way. when they came out with the small deposit rate cut an extension of qe instead, no monthly increase, the euro surged the most in six years. matt miller, bloomberg, berlin. yousef: the chief economist at global asset management is still with us. this is a huge day for the governing council we have put up this chart, hdmi. i really like this, because it shows the market impact and lays out the previous announcement for the policy decision. then you have the upper boundary respond and lower boundary respond, and the upper has been higher. what do you expect mario draghi to tell us today?
is he going ton: do if he rolled over the program. let's see if he does not answer today and does not have to wait until next month. assuming he announces it, it is 80 billion or is it last? , does he produce a time limit for this to come to an end? assuming he does not give a time for this, i think it will happen. and then, is he taking action to eliminate what is effectively the running out, the scarcity of german bund? you have got to do something. you have got to deposit the floor limit. there is all kinds of things he can do. some of them will be held to save, some of them less so. yousef: the modalities of the program itself. this shows the bond buying program, and some of the different directions on that front. as the yield begin to three pop
slowly -- you'll begin to creep -- yields begin to creep up slowly, how does it increase the bond buying parameters? steven: it makes it easier. bondi -- mario draghi should extend that. let's not do more. they tend to be german, but they really dominated. by theally dominated general consensus we have inflation target, that is the objective, let's keep doing more until we have more. arise, thed does scarcity issue affecting german bund in particular does ease. but they may make some changes, but they will not the main as radical as a few weeks ago, yield for lower, they may have to make some changes in the evening of scarcity. if this means you end up buying more italian bonds because you shift the purchases, that is positive.
if you buy more bund, that is negative. the biggest reaction as matt is talking about is on the euro. if he fills the expectations, the euro goes down again, it has been going up strongly, and that is a global phenomenon, and is worrying about how he will meet past expectations. angie: or maybe he does not say anything at all because there is a lot on the plate when it comes to 2017, stephen, what will happen with rex it, i'm number of nations as they go through the electoral processes. and trump coming into office, all of that, really huge question mark when it comes to regardless of guidance of ecb or not. steven: absolutely, politics, politics is the theme of the moment. as investment banks and people 2017 outlook,eir
some have already come out, they are talking a lot about politics. we have had italy and istria -- austria and brexit, next is the french elections. penguess is that marine le from the front will not win. theon will win -- win, and that will be positive for the markets. it isn't all political shocks. politics very important next year. yousef: another event is the meeting between opec and not outback. i was speaking with oil ministers yesterday. they wanted to bring on the non-opec nations to a broad agreement. what is your outlook on that? steven: i don't want to come opec'sas cynical, but
ability to maintain agreement let alone get one -- it has got one, but it has not started yet, the ability to maintain that would countries have a desperate need to boost revenue, it is tempting to push ahead. the more significant factor is that the oil market has stabilized itself. taking a step back from the speculation about what the non-opec members would do, deal today, tomorrow, the world economy is in a better place, so the oil price is stabilizing as a result of stabilizing demand. yousef: we have interesting inventory out of the u.s. which shows of the oversupply story then one on the other side. we are out of time. stephen bell, thank you. let's get you a taster of what is next. choice for china, why trump's
yousef: you are watching bloomberg. angie: the president-elect, donald trump, reportedly has his man for china, iowa governor terry branstad has taken the opportunity. we have got stephen engle joining us right now. you are a veteran here when it comes to chinese. that is four american envoys to china? stephen: i have crossed their path or they have crossed mine. angie: has terry branstad ever cross your path? stephen: no, but going back to the others, and gary locke, jon manyman, there have been ambassadors all very different timesrhaps a man of the
has given me a delicate relationship between china and the u.s., and this man trump has picked and has reportedly accepted, terry branstad is a long-standing friend, that is how he is being described by trump and also by the chinese foreign minister, of xi jinping. the chinese ministry says it is a long-term friend of the chinese people. they go back to 1985 when he met him in iowa. he celebrated xi jinping offending to the presidency in 2012 in a banquet in des moines, iowa. he goes way back, shared interest in agriculture. how is wall street, how are many -- money managers accepting this? let's here. >> the oriental concept of faith and confusion is romantic, but they can out weight you for a century. so having someone who has already been to that rodeo, has thisds the program
is a brilliant move. stephen: so if he is -- yousef: if that is the good cop, who plays the bad cop? stephen: someone else can be the bad cop with tweets, but who is secretary of state? geopolitical affairs? is it mitt romney or jon huntsman? right now it is steve immunogen -- mnuchin. on his first day, trump will label china a currency manipulator, that will be for the secretary. and then there is the review committee looking at foreign reviews into the united states. there was a record last year, 16.3 billion u.s. dollars more so than u.s. investment into china, a lot of hawks in
angie: it is 12:30 in hong kong. these are first world headlines. china rebounded in november to rise 6% in yuan terms and edged into positive territory in dollar terms. that is as demand held up and weaker yuan boosted competitiveness. there was almost 10% falling against the dollar since august. leaving aso rose, trade surplus. japan unexpectedly cut the reading of third-quarter growth to 1.3% down from the preliminary measure of 2.3%. they defaulted on capital spending and infrastructure.
this is the first time to choose a new method for gdp, hoping to bring shinzo abe closer to his new goal of 1600 trillion yen. this focus shifts to whether opec will be able to implement cuts. the cartel may not be able to persuade just persuade independent -- able to persuade independent people to cut. $25,000lc will receive a day next year, told percent less than before the cuts were agreed. bill english is now all but certain to be prime minister after his rivals for the post pulled out. prime minister judith collins withdrewealth minister , saying it was supported by a national majority. global news 24 hours a day,
powered by more than 2600 journalists and analysts in more than 120 countries. yousef: thank you. let's take a look at what has been driving the markets. we are joined by samuel husayn. great to have you on the program. with the gcc, it is really transformed. i brought this up to get additional context. this is how old stocks are trading. -- gold stocks are trading. 2016, thehis over qatari stocks, dubai, and for official context, we put the emerging market benchmark as well. you can see it is white. the stocks are no longer chief especially in qatar. right, the value
posted the saudi bond issue, and the opec announcement of oil, but i think in the context of emerging markets and global markets, what is different is the dividend yield story. they have a much different yield market from emerging markets. if you look at the dividend yield of mci world, it is 2.4, 7.8.em is 2.55, and gcc investors look at it as dividend play, given that there is still more of what they can get out versus other asset classes. yousef: we have the oil price stabilizing. we have got the meeting this weekend. what do you expect, and how will that affect your selection? fahmi: there seems to be an optimism by both nigerian and
e.u. oil ministers that something will work out, but i could not help but hear the comments of your previous person here this morning, and the proof is in the pudding. those cutbacks, it will be very important, and that is what the market will be watching. angie: stabilization in oil prices as you say, we are seeing an improved macro picture. how is that going to affect private equity in the gcc? fahmi: i think private equity has a big role to play in the gcc, and i would like to see more of it for the next few years. we are considering setting up private equity fund, focusing on growth capital in qatar, the uae and saudi arabia.
given the banking sector is no longer willing to lend to these companies, we hope to see more private equity activity in the next 12 months, and obviously opportunities from evaluation point of view is becoming more interesting what we mean for these assets. angie: are there sectors that interest you more for your investors than others? like healthunds care is interesting when you are looking at health care but not from the asset side, more on the sort of technology side. we like transportation and logistics sector, and we are definitely looking at other sort of opportunistic opportunities within pe selectively in the gcc region. yousef: i am holding up the member ranks return function, these are stocks that are performing well versus which
really lagged. you see this would have gotten to it are 69% on your money. you have got a few insurance stocks to the upside. story,look at the dubai which again has been really fascinating in 2016 given it has been more diversified from some of its peers, 2016, what happened here? fahmi: the funny part is even though we have had tremendous turnaround, resilience, we are still trading cheaper, qatar is still cheaper than emerging markets. some of the stocks you mentioned and the chart, we will invest in, given they lack of great governments -- governance. we don't know if the earnings for 2017 and beyond -- that is going to be very important for us. company.a bellwether
it is basically your gateway into the uae market, whether it is hospitality or real estate. it is going to be forward guidance from these companies, very important for us to understand how we should invest. that is something the company should do, explaining how the environment is, and what they are doing. he was not specific here, but he is addressing that, a welcome comments. the implied probability function, calculating 100% likelihood of the rate hike in december. the rate hike by virtue of the opec, the rialto the dollar, the [indiscernible] to the dollar, that will translate into this part of the world. what does the rate hike mean for
the gcc? is there some risk here? fahmi: it is a combination of two things. will the banks bid up for deposit? you will see that in the next few weeks with the otherdressing, but the fact is, how will they breathe rate or deep price their loans? it is how management of these banks will address some of these challenges. this clearly some banks will be able to do it in the countries they operate, others will not yousef:. yousef:as we look to 2017, what about the saudi story. ? anything on the radar that is interesting? fahmi: saudi arabia is the biggest in the region, market cap is the most interesting from a diversification point of view, liquidity point of view. we do light dark.
-- we do like qatar. defensive posturing companies, where we want strong management, good cash flow, and obviously growth opportunity given we will see a more stable price of oil than what we saw this year. yourf: always great to get insight. the chief executive officer at [indiscernible] let's show you what is still coming up. we are live at the aussie on business summit -- asean business summit. we will hear from this bank leader. ♪
this has been a key issue discussed at the asean business summit. up the valueing to of the region. the cochair told us that while sales growth is at full speed, there is plenty of potential ahead. >> over the past 10 years, aussie on has really -- assad -- asean has really grown. looking at the demographics of the population, which is fairly young, and the ownership, which is on the low side, we expect a lot of growth. we are optimistic about the economy's in asean and the auto industry and nissan's own prospects. yousef: we also spoke to this venture capital about why it is bullish on south asia. they are going through and renaissance with indonesia.
the market size is phenomenal, you see very resilient entrepreneurs coming out of that ecosystem, and drastically large companies being built there as well. it is no secret china is the largest unicorn, they have been making the best in indonesia for a while with takata and other businesses as well. the daye are spending at the bloomberg aussie on -- asean summit. we have a reporter standing by with the largest reporter in thailand. they have a presence in every anssie on -- in every ase country. reporter: you are wondering which one as well as i. growthe up eight that will be maintained, looking at single-digit growth of the aussie on -- from the asean
region. good to have you with us. talk to us about the prospects for thailand itself. what are the challenges that may impact your growth? to 5%, andr is 2% layingernment has been foundations for short-term growth. you can see many special projects have been approved and underway. we will see the implementation of this project, which would provide a good basis and structure for logistics, making connectivity in every country good. but thailand is seeing you did growth, slowing growth,
and that is impacting you. and pl is also rising. what are you expecting? >> there is in the nonperforming i.e. rise, but it is manageable. maybe we are improving and competitiveness, and hopefully with the economic growth, the company is going to move things forward. and they will peak at what, 4%, 5%, if you had to give a projection? >> hopefully no more than 4%, yes. fahmi: where are the bright -- rosalind: where are the bright spots? where are you looking to invest? inwe see significant potential with asean and the younger population and rising
income, indonesia, myanmar. , they are moving forward quite well. and especially with these companies moving down in the region, together with the local companies, we see good potential. rosalind: when you say potential, what do you want to capitalize on? >> we would like to support customers and local entrepreneurs with business plans and see if they can move forward with prosperity. rosalind: when you talk about the future, there has to be a digital strategy. we talked to -- when you talk to banks, they say digital strategy will put them in good faith. what is yours? >> yes, technology will make a big change in our business, so we have to move ourselves
forward as well. we are putting up different applications so we can interface better with our customers. we also have to transform the internal system on a digital basis to be more in line with the new trends, and the third, we take partnership in companies so we can see the movement and the direction of change, direction of change we would be seeing. rosalind: do you see non-bank players being a threat? we talk about how we pay -- alipay, visa, and more -- do you see it as a threat? >> certainly. we see different players, ,on-bank players coming here and we will set ourselves up accordingly. rosalind: how much are you investing in technology to put you on par with these people?
>> we do our best. we put in investments to internal technology as well as looking at some of the companies, what is the trend happening we can move forward with them. rosalind: we are here talking community, and i'd later, have you seen impact of the agents the? can that be quantified? >> we can see many are moving forward on integrated basis within asean because companies are making investment into these orntries, whether investment trading purpose. we see greater integration have movement of people. rosalind: isn't it true the investment we are seeing is a result of high-end growth, not because of the aac? there can say that, but
is a harmonization over the years, making it simple for businesses. improvement can be made, and use the production takes a different location and moves upon countries across borders. we see more of that, especially with the different structure and logistics put in place. rosalind: thank you for your insight. joining us here at the asean summit. angie: thank you very much. coming up, the largest theme park developer looks review to death future growth. worlds of adventure, joining us to discuss the group's expansion plans. ♪
el-din in dubai. it is 12:51 in hong kong. i am angie lau. israel has voted to give official recognition to this unauthorized settlement on the output bank. grabs condemned as a land by the united nations. the bill was introduced by the prime minister. it passed 57-51 and must be approved into more votes to become law. yousef: the head of dubai's largest party developer says the emirates real estate market will seem -- ca rebalancing next year. the company expects growth next year, even amid construction in market.ing low oil prices, weaker currencies in europe and russia
and the of and in the property in dubai has hurt this story. with: a delivery standoff rolls-royce after the u.k. manufacturer agreed to improve performance and maintenance concerns. the emirates refused to take the first 80 planes with rolls-royce engines after switching from the repeating turned white -- turbines. the new engines will be delivered december 16. yousef: the world's largest indoor theme park which spreads over 1.5 billion square feet opened in dubai in the summer. the owner has announced a growth strategy to expand this even further, being they want one major attraction for the next five years and to take the company public. ottowa.is leonard great to have you back.
about the big smile you had before coming on set. so this aggressive expansion plan, you need capital and money. leonard: we look at to a financing-- two options right now. a second portion will be linked to debt, raising fresh debt to fund this multibillion-dollar project and other financing options, which we are actively looking at. .ousef: ipo we understand you are working with a coordinator on the transaction. is there any time or date? leonard: this is in the interest stage, looking at many options. we are open to a multitude. yousef: you are exploring that actively. any topline vigor how much you would need to raise, and how much would you like for that expansion? leonard: the multibillion-dollar exposition, the first part was $1 billion + project.
[indiscernible] said it isright, you still rumor stage, but let's look at this presentation. you have got foreign investors who are watching here. what would make img world of adventure so palatable for any portfolio? leonard: we just launched one of the global initiatives with a multitude of different brands coming under one roof. now with the second in proposition, we have really become a destination for entertainment in the region, bringing in a large international portfolio of brands that is somewhat of competing brands and flourishing under the same destination. we will have a wide variety of rides and fashions, smb retail b retail places, and i
think we are leading the way. angie: how much is local and international when it comes to visitors? for the first year, looking at 50-50 between residents and tourists, but the tourist market is taking over in subsequent years, growing to 60% and 40% on the residence side. --are working with residents emirates airline to attract them. yousef: we have the federal reserve about to embark on another rate hike in the year over december. that will mean the dollar in the short run will strengthen a little bit further. this means the visitors coming here are going to struggle converting that currency into amber riley durham's -- emma roddy -- emirates durham. leonard: we still see that
diversifyingit is the market today, not just being a high-end retail destination but more of an affordable destination for the entire family. our park leans to the family market, making it affordable and for everyone to travel to the emirates to experience the parks of this scale and nature. if you want something of this, you have to travel quite a far distance to the far east or west to experience this large-scale themepark. people do travel to theme parks, it is a growing industry, and we are attracting the wider region. yousef: thank you. we will see how it plays out, the chief executive officer at img world of adventure. we closedlet it go, higher for u.s. futures, and also seeing sharp moves downward in oil. that is it for this edition. from: we have top stories the world coming. bloomberg tech is next. ♪
1:00 here in hong kong, your top stories. china exports rebounded in november. demand holding up with the weaker you one boosting competitiveness, helping to step a seven-month losing streak. imports also rising, trade shortage -- japan unexpectedly cut its rating of third-quarter growth winning lower.2%, capital spending. meanwhile the government -- new calculations. breakthrough tra