tv Bloomberg Markets Middle East Bloomberg November 15, 2016 11:00pm-12:01am EST
>> taking it to the limit, senior opec leaders hold urgent meeting to bridge the divide of production cuts. rise foracific stocks the first time in four days, and the dollar slipped back as investors question the reaction to donald trump's win. >> abu dhabi may launch more financial mergers after combining national banks. >> the chairman announces
illegal moves as he is forced out of another top position. it is 12:00 p.m. in hong kong and 4:30 a.m. in london, i am angie lau. >> i am in riyadh in saudi arabia, it is 7:00 a.m. this is day two, let's talk about the middle east closing. closing .9%. equity markets just a little lower. up by an eighth in dubai. we dropped by 4% yesterday morning, all on the back. that looks as though it has been denied. a 13 day winning streak, that is off the agenda. market, .5%. the currency strengthens at 15.8 against the dollar.
those are your closes, angie. i think the day will be important in how we open up because you have that nice oil price up by 6%. all hands on deck. we are going around the opec countries. russians are having conversations with opec. deck, they hands on are set to talk in london. to get a deal for the 30th of this month. but look at the market positioning. the short positions are rising, 2012. they are roaring higher. the net positions have dropped by 23%. the biggest slump since 2012. but the short positions are up 55%. the market is short into the current november. angie: that is interesting because we are seeing it support the markets here across asia.
but i want to bring up something we have been noticing for a is, theonths here, that dollar and the new vix. has it lost its predictive power? years of monetary easing, is, the dollar and thevolatility has be. remember when there was nothing to talk about? it was so stable. and the compression of credit spreads means that perhaps now what we are seeing is that the u.s. dollar in pink there, more reflective of what fear actually means for markets. in fact, with that partial safety haven, given the dollar's role as a barometer for leverage, that is what we are seeing. but let's get the latest on the markets because we will talk about all of that and the impact. >> it is a rally across markets
here in the asia-pacific. another thing worth noting, volumes are bad. we have seen consistently since the election. but every day has picked up since the day before. you look at bat against an average of 30 days, that is far above what we have been used to so far this year. when you have prices on the way you look at emerging markets like indonesia, mongolia, philippines in the top three. you go through the list, these are markets that have seen a lot about flows. it is a relief rally, of sorts. everything the market is up in asia. china is there, maybe you are looking at 75% stocks on the way up. gets more interesting as we move the the sovereign bonds it dollar retraces some gains overnight. mostis interesting, currencies are gaining against the u.s. dollar. we're going through the list,
there is the yuan, the rupee, and the japanese yen. as you can see, on a day when the dollar is consolidating, the revenue is continuing to fall. 688.e now looking at this bit right here. they started to come out with revisions off the chinese currency to well above 6.8 against the u.s. dollar this year. that is continuing to adjust. -- party continues on the top three performing commodities today, all on the chinese commodities. not going to get into details there, but the party continues. before i go, very quickly, yes, we are seeing a rebound across most bonds, with the exception
of what we are seeing in japan, where bonds continue to fall. we see yields up for basis point. when you look at the 10 year, we are just above zero. , the bigout, the boj question they are asking, is that a floor or a midpoint? know, but boj to donald trump, thank you for that. you did something we could not do for so long. we will leave it there. angie: of course, a could be all about oil, as well. it is notable on the hang seng index we see stocks rise for the second day to read big gainers are oil stocks. petroleum and others, gaining. climbing close to 2.5%.
>> oil is a big feature, i mentioned it at the top of the show. it is reversing its gain. it had its biggest surge in normal seven month. they will watch, can they bridge over the divide in terms of who takes the pain when they need at the end of the month? anthony joins us now from divide. i was saying at the start, russians, there is a whirlwind tour. politics, ormore is this all hands on deck to really get a deal done? , i hope manus you're getting some air miles yourself to read -- yourself. there is a big factor leading up to the meetings that are taking place at the end of this month. have a keythey committee meeting coming up before the meeting where opec will parcel out who will cut what.
a lot of the shuttle diplomacy between the ministers, the opec secretary-general and other countries is feeding into that. countries the putting down their claim for what they are willing to do, and ideas for what other countries should do. bringing in russia, we know russia will be there this week for a gas and countries forum meeting. they will be with opec member states there are russia is important for getting them on board. if opec itself can agree on who will cuts what and how much, then they can involve russia and other non-opec producers and get them to take oil off the market. analysts have been telling us opec and russia will need to take one million barrels a day or more off the market. somewill require substantial cutting from some opec member countries and cooperation from outside the group. all thishe point of
shuttle the promisee heading up to the meeting in vienna. angie: give us an idea of the details. what do they specifically have to consider here when it comes to the main issues? >> there is an issue first of all around the so-called secondary sources. this is what analysts, journalists, other consultants estimate the opec countries are producing. in some cases, that differs quite a bit from what some of the opec countries themselves report as their production. that is a particular issue when we are in countries -- looking at countries like iraq. they asked to be exempted from cuts. they say they need the income from oil sales to finance their fight against the islamic state in iraq. producing.nt to keep they do not want to go below 4.7 million barrels a day, which is what they say their average production is this year. opec has been substantially lower, say another 200,000 barrels a day lower. that will be bridged.
also, iran coming back from sanctions. they do not want to have to make a cup. they say we have been under sanctions for a number of years. finally we are bringing production back, about 800,000 -- they want to get at their level previous distinctions. two countries we are really watching in the run-up to this meeting. very quickly, give me the context of what impact u.s. oil production could bear on the oil market? what can they do a trump really accelerates big oil in the u.s.? situation nowhis because saudi arabia decided to years ago, we are not going to cut our production and giveaway are shares to higher cost producers, including the shell oil companies in the u.s. reduction there has come down because of the drop in oil
prices. with the election of donald trump, as he is president-elect, there is talk's policies will energy inuction and the united states. we hear from analysts in the are environmental issues. maybe they do not impact the margins of some producing facilities now, where longer-term issues will be government approvals for pipelines. potentially, that could become easier and bring into the u.s. more canadian crude oil. the middle eastern crudes also compete with canada, venezuela, mexico, those bring in heavy crudes. it is already a competition there. analysts are telling us it will not be a major increase. we should be able to maintain that market share in the u.s.. angie: gotcha. thank you for talking to both
manus and myself. we have first word headlines. snapchat ipo could come as early as march as the parent company filed confidentially last week. we have been told snap is targeting evaluation. one person familiar with the situation said snap is closely monitoring postelection volatility and may take the idea if needed. snapchat has 150 million daily users. and, the most famous face on , super mariopads run can be downloaded for free but users will have to pay about $10 to unlock all the features. this comes after nintendo's successful launch of pokemon go earlier this week. it marks the first time the franchise will be carrying on smartphones. they will introduce to android devices later.
paul ryan has won unanimous republican support for house speaker. he has support of president-elect donald trump. the dawn of aalds new unified republican government. texas senator ted cruz is said to be in the running for attorney general. he visited trump towers on tuesday, but declined to say whether he is under consideration. the bank of england governor says he unexpectedly -- the unexpected slowing of u.k. inflation has not changed his outlook. expectshe still inflation to exceed the 2% goal next year to stay there until the end of the decade. inflation was weighed down by the cost of clothing and further education in october. he said the weak pound will try to go higher. >> inflation is going up. the path from a 20% fall in the trade weight levels of sterling will come, it will build toward
the end of this year into 2017. above expectation, the 2%, by the middle of 2017, it will be there because of that passer. ask global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. later in the up show, we will be joined by one of the most powerful leaders in finance. and, we take to the digital asset holdings ceo about ages push. the trump shock has been weighing on stocks, will they make a quick recovery? we will talk about cross bridge capital. ♪
>> you are watching "bloomberg markets: middle east," think you for joining us i am manus cranny. angie: and i am angie lau. they want to -- they're calling for a pause. they say they will not cover the $3 billion shortfall, but disagree over how they should approach lenders. the operation has been in limbo dam killed since a 19 people and swamped a vast area of land. hyundai gained 12% after ace spin off of its non-chip building units. it will splitys off its construction equipment, electric and robotics division by april the first. they say they reduced their workforce by more than 2500
people in the last quarter. angie: the world largest movie theater operator. faced2 billion offer opposition. chainlso bought a u.k. and another cinema earlier this year. run, mainlandbull china shares are enjoying. we are going to ask david ingle why they are not interested in shenzhen. be high-level trial starting this weekend that of the presumed launch by the end of the year. that is what is projected.
itis interesting because gets more foreign institutional investors into the new economy in china in shenzhen. shanghai is the bigger, older economy. they have these high-growth, new economy stocks and they want to institutionalize it for the professional equity market. on that sense, it is a good thing. but if you look all the way back to july of last year, foreigners have not really changed their net positions in chinese equities because of the route and uncertainty, especially in the beginning part of this year. there are global funds. global funds have a sold a net 3.5 billion yuan. no terminal, but we can bring up the shanghai composite index.
this is the shanghai link. month, $500 this million sold off as net shares. that is the year to date so far. even as the shanghai composite index has been moving into bull market territory. it is confusing because it says it is down 9.5%, but in fact it is up 20%. stephen engle, thank you. manus: angie, let's talk about the markets. you have the trump victory. that seems to be stepping back from global markets a little bit. you have the dollar coming back from that month high. there is one man in saudi arabia, they have been impacted, as well.
he is from cross bridge capital, a very good friend of bloomberg. welcome to the show. look, i have been saying, we are trying to make sense of the trump victory. you called it, you said that trump would win. looking -- have equity markets ran too far too fast? is it not all good for the consumer? >> the equity market has not run too fast, we did not see the selloff people were worried about. if you look at the 10 year yield on the treasury, 2.2, it is fairly written. there is a lot of concern about mr. trump's policy, what it will be. know-term, people do not what his policies are going to be. if you look at the impact on the equity market.
1945, s&p doesto better under a democrat president been a republican. however, we now have a republican house and senate. thatdedicates itself republicans are more business-family, deregulation of touch. to me, the excitement and equity we have seen in the short-term is too far too soon. it is not backed by any policy that president-elect trump will do. aboutear still will be buying bonds and looking at what the fed will do. seen --already manus: the probability of a rate hike is nearly 100%.
manus: welcome back to riyadh. we are on the road, we have a guest with us. he is from across bridge. the work probability function says almost 100% probability of a hike in december. i want to go forward and springboard the debate. what potential, if there is inflation potential, expectations are rising. what is the fed need to do next year to counter that? >> i was skeptical the fed would raise it. looking at probability now, we might get that. we have seen earlier growth coming up, we will not see the fed worried about it. i would not be concerned that they would raise it very quickly. that, they are
looking to go higher if we follow up on the policies. manus: angie, join the conversation. angie: let's jump into my bloomberg because we are seeing term premiums flipping deposit. that 10 year term premium really showing what investors are asking for when it comes to risk. are we back at a stage of normalization again, this years -- oft to taint of easing quantitative easing? europe, theyk in want to follow up and do more qb. if central banks are not going clearly, the rates of gone up a lot. overall sense, they're going
ahead. but i do not see a runaway problem because you're not sing a inflation problem. manus: we will have a little more conversation in terms of the currency. angie, what happens next? we will talk about the dollar. angie: it is a question to ask, looking forward to it. coming up, nasdaq ceo. she expects the trump administration will be good for the financial industry. and what changes to expect next. we take a look at the markets across the region. asian stocks rise for the first time in four days. if you have noted, exactly one since a surprise trump election.
it is of the first word headlines from around the world. asian stocks rising for the first time in four days as the dollar falls from a five-month high against the yen. investors are questioning whether or not they overreacted to donald trump's shock u.s. election victory. markets seeing a 94% chance of a december rate hike. it was a different story in saudi arabia where shares plunged more than 2%. the $45 after the biggest one-day surge in seven months. they are on as
final diplomatic push. qatar, and venezuela leading the charge after meeting over the weekend. arabia, i rock, and ironic remain at odds over how to share the proposed cuts. bloomberg has been told abu bank is considering more mergers to boost his financial services industry. are weighing ay plan to combine commercial banks with the union and national. happen afterly they complete the union in march of next year. sources in the trump camp say the president elect's son-in-law is trying to remove loyalists of governor chris christie. was fired after christie had tapped him to lead national security planning.
kershner is the husband of his daughter ivanka. global news 24 hours a day powered by more than 2400 analysts and journalists in more than 120 countries. this is bloomberg. third quarter results, a new record with the expectation of a double-digit sales growth. the company has made a string of acquisitions this year, trying to gain a greater share in the mobile market. let's bring in global reporter. what should be watching out for? anticipation for the company are sky high. there expecting it to grow this which isn this economy slower. people will be benchmarking it against companies like alibaba, which is also done great on their november 11 order.
ent is doingenc well. let's talk about what analysts were telling us. their main concern was that they are looking at global revenue growth. where will that come from? this is a really cutthroat industry because the lifespan is it shorter and there is less margin. that makes the average pricing so much more important. but they will be competing with alibaba in this downward economy where budget is tightening. i am looking at some of the bullish contracts. they are at a 15 month high. obviously, these options, what is the driver behind it? it is it -- is it a big forward trade?
it is a pretty bullish position. >> yes, they see a bargain here has been thent best performing stock in hong kong in the past five years. probably won't last, especially for a company like tencent. upus: thank you for the run with the latest on tencent and the option positions. crossbridge capital. let's talk about currencies. the dollar has had a cracking run. strong -- is there any empirical evidence in terms of the dollar under a republican administration? >> i do not have those facts, but if donald trump was to follow up, he wants corporate to
bring their offshore money back, wants to reduce tax, that is a powerful thing. if you reduce the tax from 35% -- thatand have those could feed into growth. be a story for the second half of the year. grow above or below parity. you have austrian elections, the french elections, europe will be going through its political process. the dollar. for investments, the euro-dollar could be week going into the second half of next year. -- with respect to the
itlar-yen, you will not see go to 115. if you look at dollar sterling, -- let's see what happens with the auto statement. and, maybe more fiscal spending. up growth, ite will help the sterling. in any case, we're seeing the dollar will continue. u.s. dollar and yen, i'm going into the bloomberg in bringing up that chart for everybody. you are seeing what has been happening in the past couple days. certainly, the past year where we are seeing u.s. dollar weigh on the yen,
which is a good thing. but what about u.s. corporate? is this a strong u.s. dollar for u.s. corporate swimming goes corporate when it goes public? >> look at the u.s. as an economy. it is a very defensive economy, not that you have to sell to the rest of the world, the rest of the world sells to the u.s. todrug policies are able change the gdp growth. up iwill be more than made what we see in domestic growth. that is a very powerful story. people are discounting what president trump can do and cannot do. but if you look at what he has laid out and what his advisers are saying, it is business-friendly.
there are talks of repealing obamacare and making it more business-friendly. that is a recipe for growth. whether he can influence all of that, we will see. -- we will see what happens in the second half of the story. manus: we will see what he manages to deliver. head of investments from crossbridge capital, joining us. promoted anasdaq has ceo, making her one of the most influential women on wall street and the first to run in a major u.s. exchange. we spoke to her about the changes she expects when she takes over next year. i havegreat news is, been working with bob for 10 years. partneredave been together to make sure we're optimizing the business. i do feel that i have my handprint on the vast majority
of what we have been driving towards and focused on within nasdaq the last two years. my job is to continue the journey that we have been on to make sure we continue to be a critical market and infrastructure provider to the capital markets. >> they have been very focused on technology and expanding those capabilities of the nasdaq. will that be a major focus going forward for you? yes, technology is deeply embedded in our dna. that is how we got started to be the first electronic exchange. that will continue to be our focus, and how we can bring emerging technologies and drive to allow our clients to interact with the capital markets as efficiently and effectively as possible. service,e great client operations, and all the other things that come with it. >> is there anything different you might do, as much as you can reveal?
>> generally speaking, we have been transforming now second way global technology provider. i will continue to take that journey with the clients and our employees as we continue to be a great exchange operator. >> let's talk about regulations. there is a lot of uncertainty around policies in general. we're hearing from president we're hearing from president obama, what may or may not be expected and what he is responsible for anymore. we heard from president-elect trump, about rolling back that have been imposed on the financial world. how will that affect the nasdaq? how are you preparing for that? >> to the extent they continue pro-business orientation, that does tend to come with it at some level.
one of the significant areas of regulation that is impacted our industry over the past seven years has been dodd-frank. while a lot of things have been put in place within the industry coming from dodd-frank, there has been the unintended consequences. most notably, the banks are no longer in a position to offer much-needed liquidity into some of the markets we operate. we would like to see the opportunity for dodd-frank to be takeied to allow banks to responsible risk-taking into the markets they have to provide that important liquidity. >> modified or retracted? to recognize that an enormous amount of work went into the creation of dodd-frank and there were a lot of reasons for it. we do not make sure have revisionist history and recognize the history we came from. but whenever you put a new regulation, there are unintended consequences that come with it. put a new regulation, there are unintended consequences that come with it.
so how can we make sure that we are modifying the regulation to make sure it is in fact having the impact you wanted to have? you say that president-elect trump is good for the exchange and financial markets? >> from what we have seen so far, which is only a weekend, i would say republican administration that has a pro-business orientation would generally be good for the financial industry. cute is also pledged to back on corporate taxes. how big of an effect will that have on the exchange? speaking, if you have some of the tax policies they are considering in terms of changes, the repatriation tax, that really drive, make it so companies can optimize the cash they are generating and andvested appropriately reinvest in growth. that is good for the economy. theoming up, we go to fintech festival in singapore.
manus: welcome back to "bloomberg markets: middle east ," we are in riyadh. angie: and i am angie lau in hong kong. egyptian pound is strengthening in the black market to near parity with the bank rates. the currency rose 15.8 to the dollar compared with the national bank prices. dealers we spoke with in cairo have reported a fraction under 18 pounds to the dollar a week ago. egypt was forced to devalue the currency to meet the conditions of a $12 billion loan. the health care is said to be destroying a potential sale they could value the business at $400 million.
sources say it is working with bank of america on the transaction. we are told advisers have contacted potential bidders. no agreement has been reached. demand for private health care has risen in the middle east because of high incomes and few public facilities. land -- lande has granted by the government can be used as loans. website says such land may be mortgaged to any bank or financial institution, duly registered in dubai. they intend to help investors and owners obtain financing from the institution. manus: asian lenders are spending millions on technology. the idea is, they will be able cross-border payments and reduce risk of fraud. let's get to singapore. we have the fintech festival
taking place there. guest, a very special very passionate. good morning. >> good morning. in this gathering with a 11,000 people, strong advocates. the most prominent is the lady sitting next to me. good to have you with us. we have been talking about blockchain for-- more than a week. are we at critical mass with them? >> short answer is yes. if you ask yourself what would for ading to happen today technology to become mainstream in five to 10 years, this includes a significant amount of global investment, over $1
billion of investment capital in the last year, largely focused aspirations like bitcoin. they work on difficult choices that require consensus, a significant amount of regulatory focus in terms of understanding and promoting the technology, provided it is implemented safely. most important, examples not just of experimentation, which has been going on for several years, but the first commercially oriented nationale, infrastructure project intended to actually use technology in the real world, the wholesale applications for the first time. those are being billed as we speak. you will see those begin to come into production during the early 2018.te 2017,
>> there were talks of regulation and the authorities said perhaps blockchain could be useful. where you stand,? regulation is a vital part of the echo system of financial services. -- ecosystem of financial services. are implications it can impact jobs in the future. of course, it is vitally important that financial markets and activities are subject to regulation. ironically, was first put to use for currency applications. it was able to initiate the transfer of money between anonymous actors without any intervention or supervision. concerned that regulators early on.
but that technology has now evolved in a significant direction, towards solving problems within existing regulating market infrastructure. and, they have the ability to facilitate regulations. example, by improving transparency, making regulatory reporting easier, enabling a regulator to have a direct viewpoint into the ledger of activities that market participants are undertaking. there is a feature of today's market infrastructure. recognizing fiber risk is also a concern for regulators -- recognizing cyber risk is also a concern for regulators. >> your company recently signed a deal. where else do you see opportunities for blockchain in
asia? >> the australian stock exchange, we have been working with them for well over a year now. isthat case, that project through its earliest stages. it is beyond the experimental concept phase and is targeting the delivery of technology by the end of 2017. that will be in production-ready form. there are many similarly situated organizations that are using post-trade infrastructure that is very highly functional. not in crisis, but outdated. those organizations who include an array of market infrastructure provided to many different countries are watching this very closely because it represents the cutting edge of a new way of doing trade. a new way of processing materials that is
interested for them. they otherwise need to replace those infrastructures that are based on technologies that are 30 years old. the short answer is, the opportunity in asia is very significant. >> thank you for the insights today. we are coming to you live from the fintech festival here in singapore. to see.hat was great one very passionate woman about blockchain, ceo of digital live -- blythe masters. india's largest conglomerate.
was toppled by the parent company. tata. ousted by now it is happening at the first tata unit, the beverages unit. they did say seven of the 10 directors voted to replace it and he would take over. they said there is nothing on the agenda about replacing the chairman. but they said it was about the illegality of what he did on november 24. there are 29 policies. oust him fromt to all of them, as they are finding.
he has impacted shares of the units, pushing them lower. they have started the process to remove mistry as the chairman of the hotel groups. palace inhe taj dubai, and the one in new york. but on the fourth of november, independent directors expressed confidence in him. they are wondering in the boardroom what to do about mistry. is fighting back, no doubt about it. how is he pushing back? did issue a, tata statement, saying there were concerns about mistry's time as chairman.
he says he boosted the net worth to 62%.s of tata'sid some investments were of a questionable nature. the finger-pointing when on. angie: thank you so much for that. for we let you go, a small factor, long-distance winner in the presidential election. fancy dress masks, and the demand for the donald trump edition has exploded. producing 300 50 masks a day, up from just a handful before the vote. they also produce celebrities like president obama. the demand for a hillary clinton model is now low. as they say.ics, and that is it for us on this addiction of -- this edition of
>> is the inherent in hong kong. i'm angie lau with an update on the stories. opec has launched a final push to secure the deal on output cuts. venezuela is leading the charge after meetings this weekend failed results with saudi arabia, iraq and iran remaining at odds over how to share the proposed cuts ahead of the cartels november 30 meeting. chinese premier is said to be confident of meeting major full-year targets with aggregate demand expected to rise moderately. i says come on the back of easing monetary policy, ensuring the growth target of about 6.5% will be met.