tv Bloomberg Markets Middle East Bloomberg June 4, 2017 12:00am-1:01am EDT
♪ >> it's 5:00 a.m. in london, the city is on high alert because of incidents being treated as a terror attack. suspects drove a van into pedestrian on london bridge and went on a stabbing spree, killing six and injuring more than 20. coming to you live from the bloomberg studios in london. yousef: i am yousef gamal el-din in dubai. tracy: this is "bloomberg markets: middle east." you are our top stories.
donald trump seizes on the london attack to make a case for his travel ban. he takes to twitter to ask courts to reinstate restrictions from people from muslim countries. yousef: dice rows over the effectiveness of the outputs. bloomberg'saight to about the terror attack on london bridge. what is a very latest? we have heard from metropolitan police, assisting commissioner mark, who has cleared up what happened. he said a van containing three suspects drove through london bridge onto the pavement and engaged and hit pedestrian -- pedestrians. three men got out of the car and proceeded to engage in stabbing with aacking victims
knife. we know six people have died from both of the attacks. all three of the suspects were shot and killed by police. there were some reports that the attackers had been wearing explosive will -- explosive belts. police have concerned -- have confirmed that they were hoaxes. one point that mark made clear to the press is that they are still some way from finding out what actually happened in the moment that followed the car mounting the pavement. for more, let's go to our young goal -- london bureau chief. she is on the phone for us from london. tell us what we have seen so far in terms of the reaction from the police and downing street? mma: from downing street, not much of a reaction yet. they went to downing street to
monitor the meeting of ministers and security officials for the next couple of hours or so. manchester attack, terror alert was put up to critical meaning the attack was imminent. perhaps it is something they might talk about in their meeting. police said they would increase the police presence on the streets of london. we are in an election campaign. that does have some bearing on what has been going on and their reactions. campaigning, we will have to see. yousef: let's expand on that. at whatook back happened at the manchester arena bombing that killed more than 20 people, then you had earlier in march, when somebody drove a
vehicle into pedestrians at westminster. some of the reaction we got on the political front, in terms of what kind of weight will this have an election rhetoric? if at all? her --hat we saw after after manchester, there was a suspension for three days. when campaigning started up again, the opposition labor may foriticized theresa her cut to the police budget. it through a link between those cuts and the terrorist attack. betweeno drew a link wars and terrorism at home. on the other hand, we have seen the conservatives making, if you like, political hay.
the labor party leader had .raditionally been a pacifist it went really mainstream about the ira which was big of a campaign in the 1990's. has vulnerabilities, if you like. but remains to be seen, whether it will be included in their campaign, we will see if they take advantage of that. yousef: u.s. president donald trump is reacting to the u.k. prime minister over the phone. he offered his government's full support for the investigation. he did sees the opportunity -- seize the opportunity to make the case for his travel parent. he reinstated his travel ban and said that restrictions will
provide an actual level of security. the white house asked the u.s. supreme court to immediately re-and date the ban. -- reinstate the ban. ceoave comments from the who says the laptop dan has weighed most on middle east and u.s. routes. the revenue for -- the revenue per kilometer has a big decline. chief economist at emirates nbd. when you have these kinds of occurrences it seems callous to talk about the market impact. on a pure, general level, looking to next week, it seems like we have a lot of headline. we have the terrorist attack, the u.k. general election, the testimony from comey, how are investors supposed to deal with all of this uncertainty? a very testing week for all financial markets in general. i think we have this latest
outrage in london, this will be the first factor going into sentiment here it with the election on thursday, and the backdrop to the election being one of narrowing opinion polls, this -- the suggestion of suspicion for this latest terrorist event will play into that narrative. create greater anxiety about the possibility that you see, perhaps a hung parliament, or not like the majority that theresa may wanted when she called the election just over a month ago. yousef: we have only seen the movie little bit of days ahead of the election. you look at two week volatility up on the bloomberg. just for the bigger picture as to what has been happening. we had brexit in the summer of last year. that was the last time we had a spike. you could see the last few days it has been creeping up. how much more of a reaction are we going to see in the city of
london? tim: the two are probably combined. the terrorist event will create an environment in which there will be greater uncertainty about the election outcome. that is the way it knocks on to advantage into markets. event itself the will be a factor that causes more than a short-term impact, but medium-term implications for the stability of parliament. perhaps for the stability of the government. brexitr those negotiations. that is probably what the markets will be thinking. tracy: you mention the prospect of a hung parliament there. after the manchester attack, we did see some people who were expecting the conservatives to get a boost off the back of that, that did not happen. they started losing in the polls. as we enter the final week of thatigning here, assuming there is some impacts from the terrorist attacks, what do you expect to see? tim: it is difficult to say.
the pattern of previous elections have not been great for the opinion polls. tracy: putting it very diplomatically. i suspect that, in terms of this election, some of the very short-term, or the recent opinion polls, the markets may look at them with skepticism. rather look at the averages over the course of the last month or so as a more reliable guide. that is probably what might provide more reassurance. if you start believing the recent opinion polls, you start to be a little bit more precarious. it makes her decision to call an election look a little bit more justified, or a lot more risky. yousef: you can get the latest polls and visuals on the bloomberg on eu go. in terms of what it means for the road ahead and the risk premium that is factored into with yet another
incident with casualties in the heart of a financial capital, should there be more of a reaction to the reality on the grounds? not i think the markets are aware of the issues. potential for more of them to come. if the actual what it does to policy, and when it might imply for policy from any government which emerges out of this. us.y: you are staying with we will have lots more to discuss with you. first, coming up on "bloomberg markets: middle east." investmet bank tells us why they are opting for big bond sales. catch our exclusive interview with the founder of the uae's biggest private health care provider, l.a. he has high hopes for his company as he turns his attention to saudi arabia. this is bloomberg. ♪
yousef: you are watching "bloomberg markets: middle east." tracy: i am tracy alloway. hows take a quick check of u.s. markets closed on friday. we did have big news in the form of u.s. payrolls, slightly disappointing. if you take a look at the 10 year treasury yields, that was actually found. treasury is rallying off of the back of that data. downberg commodity index almost 1/5 of 1% off the back of week oil. old rallying on safe haven demand. another great day for the equity markets, shrugging off all that payroll is concerned. s&p 500 hovering close to its record. the dow jones in this and the nasdaq surging to yet another record pretty amazing close from u.s. equities there.
is impressive. that will be part of our conversation with tim. let's talk a little bit more about what is happening with treasury yield and the fed. tracy: we did have the payrolls data on friday. it came in weaker than expected. people are starting to adjust their forecast for fed rate hike. the one move in particular is september. if you take a look at the screen behind meet you can see that the chances for september hike, as price by the futures market has split to about 26%. that is down from 45% just back in april. pretty amazing. tim: that is the one on the focus. datave seen enough recently to maintain expectations for the june rate hike. the messaging from the fed has been pretty consistent in indicating it will be a move in a couple of weeks time. third rateubsequent hike for the year at that is
under scrutiny. i think it is a little early to rule it out. are perhaps reacting to pessimistically to the payroll. good still a relatively report, it was not as good as the markets were hoping for. othere seeing a lot of market data, which has been pretty strong. this was perhaps a little bit of an outlier. the trend in the labor market has been pretty consistent. the unemployment rate tells you that as well at 4.3% unemployment rate. the market reaction was a little bit overdone to some extent. at the moment, you would probably get that september is still there, but it will depend on the next few months to keep it in position as the favorite for the year. yousef: we put up on the bloomberg a bigger picture to build up on the chart. w irp is on the queue basis for the meeting. the probability that this is
based on the fed future. we saw a bit of a change when it comes to key commentators like goldman sachs to push back their expectations. would agreethe fed to what you are saying about the unemployment number being a good number. what do you think that their great could happen? tim: the issue is not only about the data, the data will be important, but it will be about sentiment regarding the forms and the policy agenda of the trump white house. this years came into expecting what was going to be a ,ig stimulus package infrastructure spending, tax cuts and regulatory reform. at the moment, it doesn't look like much of that will happen, so far at least. you are getting mixed economic plus the legislative wins for the trump white house, that will be limited.
fadearkets may start to that expectation of the september move and push it out further, on the assumption that it will take longer for that stimulus to come through. even though the fed, when it implied they will raise three times, did not necessarily put a lot of stock on expectations around that stimulus. really looking at three rate hikes, regardless of what the stimulus had. tracy: we need to talk about full employment. looks like full employment. you have everyone who can get a job, reasonably can get a job. you don't have inflation running wild. isn't this what the fed wanted? tim: definitely, a low 4%. the probably that you go below 4% in the future. you are starting to see wage pressure in specific sectors in the united states. wages isll uplift in
not necessarily across the board, but you are starting to see some pocket where it is difficult's -- it is difficult. further,ent will fall it is only a matter of time before you get more widespread pressure on wages, then ultimately on prices as well. than thee much lower fed had been anticipating. tracy: we are not done with you yet. you will be back to discuss oil with us in just a moment. tell, a big interview to our viewers about on bloomberg tv on monday. we will be joined exclusively by the jamie dimon, chairman and ceo of j.p. morgan chase at 8:00 a.m. in dubai and noon if you're watching from hong kong. yousef: the deal to extend the -- we discuss why
yousef: this is "bloomberg markets: middle east." tracy: i am tracy alloway. its biggest drop in four weeks amid questions over the effectiveness of opec's deal to help rebalance the market. this as u.s. production continues to grow. russian energy minister told bloomberg that the deal should not be seen as a failure. if we had not extended the deal, i believe we would have at not a percent as you mentioned, but probably 50%. yousef: what has been happening with u.s. rigs? in lateex coming friday, and 11 consecutive week of gains. we put this together on a chart
seating get that additional perspective. your top panel is u.s. crude production. your bottom panel is u.s. crude. you could see it up once again to 733. you consider that back in may 2016, that is more than double of that level. the chiefg tim fox economist at emirates. look at what is happening at the oil price and what is happening with u.s. output and the resilience of the shale industry. opec is in trouble, isn't it? tim: i agree with the comments the russian minister made in relation to they have not acted and seen a much bigger decline in the oil price. ant they are doing is having impact, just not the impact it would probably be be -- probably be most desirable, which would be if eager upside and reaction to price. the problem is, as much as opec
, other partsutput of the world are increasing output, in some cases by moore. the impact of overall supply is much less than the impact would imply. that is the dilemma that opec has. it is not as if opec has done away completely in terms of having meaning. it is less in fact and it previously has done. that is a reflection of the way that the oil markets have become more dispersed and much less dominated by the forces of national oil companies. he reminds me about what the fed used to say about financial prices. if we had not launched sheila e. in 2009 -- if we had not launched qe, it would have been difficult. what do you think opec is looking at in terms of what makes it a success or not? moment they are
probably not completely disappointed. the oil prices have been brought we study so far in 2016, and holding around that $50 mark, which is a big improvement on what we saw in 2016. probably important not to undermine's -- underestimate what opec has done. stabilize the oil market around that price. it has not galvanized a sharp move higher than that. at the same time, the prices are's ready and the opec are producers are being able to improve positions on the back of these oil prices. can values a positive that be taken out of what has been happening. what they are looking forward for in the future is -- the opec's announcement will probably have some impact in terms of the daily developments. we think that will be impacting later this year. you will see a movement into deficit from a surplus. the key question is, how it
impacts on inference trees -- inference ease and stock. stocks will be at high levels for some time. u.s. production is compensating for the decline in opec production. values keeping the overall levels of stock elevated. to 2018 is,we going as supply continues to increase out of places like the united states, and the announcement the other day has added to the expectation that the u.s. will increase further. that will be a concern for opec, they may have to think about all of these issues again in 2018. yousef: that is the critical point. the question is what happens after? morgan stanley and jpmorgan making it clear that they expect that to continue. at least there is a possibility they would have to extend even further. there, but the
market becomes reliant on a permanent removal of opec, non-opec contributions? tim: the situations they are getting themselves into, i think that is there a time limit. -- dilemma. without that reduction, the oil price would be somewhat lower. they have to maintain production to keep then order price at a level that is satisfactory, but not as ideal as where you might have wanted them. tracy: if we are getting that reaction in the market, and opec members feel they are no longer getting as much bang for their buck when it comes to the production cuts, surely than tim tatian is to cheat on compliance. the longer it goes on for, the less impact you have on price. tim: that has been the case in the past. as we go forward and as production cuts continue for
longer, the tendency a long opec thatrs may be to move in direction. compliance is been largely maintained because saudi arabia is cut i more than others. that has maintain opec compliance for the first part of this year. i think, as we go forward, even expectations around compliance from a whole range of countries could become questionable. particularly fiscal positions could become more difficult. leave it will have to there. i expect we will be discussing oil for many more months to come. that was tim fox, chief of artemis -- chief economist of emirates. we will be to the investment bank about the market in the region. this is bloomberg. ♪
are watching bloomberg, the u.k. is on high alert after a terrorist attack near london bridge. ed, give us the latest. ed: i want to recap headlines from the metropolitan police. have died. we know the metropolitan police shot and killed all three of the attackers within eight minutes of receiving a call about the attack. the commissioner mark went on to set out the timeframe that the series of events happened in this evening. he also explained the investigation. >> this is a protracted incident
that starts on the bridge and finished in the market. we believe street people were involved. we still have more to do to be 100% confident. we are still getting to the bottom of what is going on, number of casualties and it is quite complex. we are still dealing with the fact that we expected explosives, but that has been ruled out. he said there were reports that all three of the attackers were wearing exclusive -- explosive help -- belts. belts.ere hoax said they will review policing. we are no longer on a critical threat level, that was downgraded a few days ago i the prime minister to a severe threat level, but we know the prime minister will chair an emergency meeting of cobra and other ministers where they will
look at the situation and decide on further action. finally, there is about 20 taken, 20 casualties were to six different hospitals across london. that number could rise according to the london ambulance service. the prime minister will meet later and we should hear from her and get an update on the situation. ed with the latest live out of london. president trump's decision to withdraw from the paris accord not -- dominated the headlines. eric reports. big names await in on the controversy and trump found some support from within. todonald trump's decision pull out of the paris accord on climate change may have lannett in corporate america, not so much so in russia. vladimir putin speaking at the st. petersburg into -- international economic firm. he said president trump should
not he criticized for were trying and cast doubt on the paris accord. largentries with such issues, such as the u.s., are not going to work. no agreement in this field of activity could be ready for signing. this work has to be constructively organize your it -- organize. >> the russian oligarchs who controls one of the world's largest aluminum producers said trump is right to be skeptical that developing companies will comply with the paris accord. the question the sincerity of u.s. eeoc criticize trumps decision. >> they are frayed -- they are afraid of media. if you want to stay politically correct. we have a guy who is putting people accountable. >> that is one point of view.
the oil company ceo i talked to in saint petersburg said they believe climate change is real and market forces will drive the shift away from coal. with or without president trump -- coal, with or without president trump. yousef: here in the middle east we are under two hours away from the opening of the emirates markets. let me show you another eventful week across the board. pullout the mrr function on your bloomberg to get the breakdown as to what performed the best over the last five trading days. after reaching that, up 15%. those are reports of possible mergers and acquisitions on the rise. 4.8% the saudi giant there. we are seeing quite a bit of pressure on qatari stocks. will seek ongoing tensions between qatar and some of its gcc peers. you could see the stock getting clobbered down 18%.
waiting on the qatar exchange and expected sentiment. first abu dhabi bank down 3.2%. volumes are a bit softer. we are getting into the middle of ramadan. trade being taken off the table. cross over to our guest and get some additional perspective us to what is happening in terms of sentiment. is a specialist from the investment bank. in terms of what we are seeing with ramadan and with liquidity, it is not necessarily this aim story when it comes to the debt market, is it? doug: definitely not. this year is different because ramadan is not falling over the summer holidays. as far as tech market concerns, there is a lot of activity. there were a lot of market participants expecting more. we have another couple of weeks
before the school's breakup. then i think things will slow down after that. the debt markets are open and most teams have people at the desk at the moment. it is business as usual. tracy: it has been a crazy year in terms of that market. we had records last year. looks like we are on pace to match that this year. one of the interesting trends that has emerged as we are ,eeing plain-vanilla issuance not that much in terms of a cook issuance. saudi arabia's recent a cook is notwithstanding. why do you think that is? doug: i think what the region needs to do, i merrily it is governments issuing the large issuance. in 2016 we saw abu dhabi stocks by 5 billion, that was followed by qatar, then later on in the year we had saudi with 17 and a half billion. those are all focused on the
conventional market. the idea was that they wanted to target additional pools of liquidity. that is in europe and the u.s. if they had targeted were issued it, you have a restarting of liquidity. if we go back to 2016, we saw that there was pressure and liquidity in the region. in order to relieve that pressure, they had to bring in liquidity from outside, which then could make its way inside. absolutelyis an critical point. we put this on the bloomberg to show how it has been fearing. this is one sign of liquidity. saudi is the the line in white. came off on higher levels with the bond issuance. it is a bit of a different story when you look at what is happening with the board and what the emirates interbank rate. the other one has a little bit
building there. what are your topline stocks/ what is it tell us about debt market? doug: if we go back to the end of 2015, we saw the local banks paying up the liquidity. these were big local banks. when the abu dhabi government did you issuance, we saw those rates coming down. the liquidity situation in the uae is definitely a lot better than it was at the end of 2000. that is a double whammy. there was the issuance of an oil prices are higher. you are not getting the uae government pulling out of the local banking system. i think that is very similar in kuwait. to higher oil prices means that deposits, rather than being withdrawn from financial
be a funons, it will -- a slow of fun. price bouncesoil back. when it became that that was not -- that would not be the case there needs to be other forms. tracy: explain this chart to me. if you look at this chart you can see gcc over treasuries. they continue to tie in versus the oil price -- tighten versus the oil price. what is going on here? when i look at this chart i think reach for yield. there is probably a case for that. it is a dilemma we have worked with your it -- worked with. we looked back at prices at the end of 2013. you look where the prices are now. points whereasis
they were previously. other than saudi which is 20 basis points wider. what you had is a deterioration in oil prices from 110 down to -- wet the prices have see this as a consequence of the global liquidity in the market. that liquidity is spilling over into the region as well. what you are having is credit , thenglobally compressing gcc follows that, notwithstanding what we see as a steady deterioration in the environment in the region. that is the dilemma where we have credit space getting tighter and tighter and oil prices are significantly below where they were back in 2013 and 2014. you also have to think, back then they might've stole some contagion from the arab spring. see,ugh we do not
politically much of an improvement in that area, i think to the broader world, it is not front pages. yousef: we want to widen out the pages to the rest of the emerging markets. very interesting patterns emerging. we will pick that up, doug is staying with us. also reminder that you can find all of the conversation we just had on our very cool function called tv . you can dive into some of the individual securities and bloomberg functions we spoke about. that is on your right column. we will pull this a little bit back so you can see the package, some of the key and big interviews. you can also become part of the conversation. if people have strong opinions about search for yield and gcc, if it's something fundamental or about liquidity, they can give us their opinion.
,ousef: we are back with doug head of credit strategies. let's jump into the broader emerging-market conversation. , givingnnouncement south africa a reprieve. the g cbs go function as a side note, just as where your credit currently stands. the line in green as south africa. easy saudi arabia is your line in purple. at the bottom, what is the bigger story that these numbers have? it is not an elevated amounted risk if you compare that to brazil. think of emerging markets, we have seen massive inflows in emerging market's. -- thatsupporting
liquidity is supporting bonds in emerging markets. been a case where you buy into the weakness and investors have done really well out of that. it has similar issues. is really involves around the political side and what is happening on the political front and the changes happening in the cabinet. changes are not going to be evident at the moment. i think south africa, you need to be brave. once the liquidity temps turn i think all emerging markets need to beware. that is what is driving emerging markets at the moment. inflows is the magic word. we have had 17 consecutive weeks of inflows into bond funds alone . is there a limit to that appetite?
udc pockets of risk of emerging per you have brazil, the turkey referendum, political situation in south africa. does that not make anyone nervous? doug: it makes us nervous as an investor, and i think it makes a lot of other investors nervous. ishink what you are having -- the cash is not being deployed so investors are balancing going into high-yield. at the same time holding cash as well. that is really what is driving the market. until those cash inflows subside, i think we will have that technical position and strong technical drivers of the markets continue. emerging markets, we have seen it before. it is very bullish. then you have the big selloffs. it is really about staying nimble, investing in the market,
iraqi kurdistan. .ajor development watch out for commercial international banks and cuts to reduce at the price of over 85 egyptian pound spirit that is the consensus rating of 3.4 four. rsi is at 77. for of american seems to go more foreign buying of egyptian pound bonds. a crossing the uae, moody's has be a 81.thinks to that is from paa to -- baa2. 10.84 comparable companies. for outperforming the dubai benchmark, up almost over 29%. closing stock with a price target of 700 pence. this follows the credit sense news. of ther the combination
biggest health care providers in south africa and i would about the abu dhabi market. tracy: let's take a look at the abu dhabi company listed on a different exchange. health care is the largest private health care finder in the uae and it is the first company from abu dhabi to be listed in the premium segment of the london stock exchange. we spoke to the founder about his plans for expanding and mc -- nmc. >> in saudi i already have two hospitals. both are long-term care hospitals. toare planning now prioritize. >> how will you fund expansion? could you sell bonds? we go to london.
i will tell you what happens. since we are growing , we are very happy. money, they lend us money. when you have the money, it is not a problem. you should have passion to do this business. tracy: now, in the wake of brexit, would you consider a dual listing as a hedge? >> no. we are doing extremely well. any disaster is not affected because health care is the one thing. we are working with the people. came with the dead
, shes to our hospital would call me. i said don't look at the money. allah will help us. it was one man and a hospital, now it is 450. tracy: what about new ventures? i have heard mention of medical colleges, thinking licenses, both in india and the uae. are those options for you? >> i am glad you asked this question. i wanted to make a miracle college. with american collaboration, good quality for universities. i am ready to do this. also, in india, i am making a
university. it is one of the states with 11.5 and growth. 7.5%. growth is at hospitals inate the urban area. the idea is only to sell the people. africa.m going to my family would be worried if i said i was going to africa. i should get more permission and then c. , kenya,ng to africa nigeria, ethiopia, all of these places i am going. egypt as well. tracy: what about financial services?
>> i have applied for a pink license in india, hopefully i will get it. we can go for the next ages of ring -- next stages of bank. banksady have a permission. they had a bank in paris, license. -- in paris.over tracy: that was founder and nonexecutive chairman of nmc health. a big interview we need to tell you about that will be coming up on bloomberg tv on monday. thes of course jamie dimon chairman and ceo of j.p. morgan chase. he will join us at 8:00 a.m. in dubai and noon in hong kong. get across to
london for another update on the terror attack has been unfolding . we are joined by ed on the ground there. give us the latest. help us fill in what are still some gaps in the timeline and series of development. the important update we are waiting for is for the prime minister, theresa may to chair a meeting of cobra at downing street. that is the emergency cabinet including ministers and security officials. policemissioner of the did confirm that six victims have died. they are only looking at three attacked or -- attackers are and all three were shot and killed by police. we do not know the identity of the attackers. it is very early days in the investigation. one thing to note, we are currently at a severe threat level. there is no tangible evidence that the government or security thinks an attack is imminent.
we were at critical last week. the prime minister downgraded that too severe. we are waiting to see if the threat level is upgraded. he may get more when the prime minister meets with her cabinet. we do not know what time that will be. thank you for the update. ed joining us live out of london. this comes the's the election in the united kingdom. we saw some remarkable changes in the lead up to the election. the sterling really waking up in terms of week volatility. in terms of other asset classes, the question remains how much of a factor is the slater's -- latest terrorist attack going to be? be monitoring any market moves we see. the pound is a obvious candidate. you have the yen, u.s. treasuries could move off the back of this. yousef: that is all we have for this addition of "bloomberg markets: middle east." tracy: we will be live from the
jonathan: i am jonathan ferro with 30 minutes dedicate to fix income. this is bloomberg real yield. ♪ brought ona downside payroll, jobs numbers in the u.s. disappoint and weight growth goes nowhere fast. your report 10 year yields pledges to a new 2017 low and the high yield issuance spread just keep grinding tighter. we start with the big issue, the payrolls injecting uncertainty into the fed's next move.
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