>> it is 12:00 in hong kong. let's try that again. global stocks are on course for the best week since the start of the year. when you look at tokyo, markets declining. hong kong trading fairly flat. utilities on the hang seng knew the lowest level in two years. cathay pacific has released details of its turnaround plan after reporting a loss. costsntend to cut staff by 30% at the management level.

details will be announced in june. rex tillerson wants a new approach when it comes to north korea. he said years of trying to persuade pyongyang to abandon the nuclear program to -- tillerson is now flying to china on the weekend. news 24 hours a day powered by 2600 journalists and analysts in more than 120 countries. a quick check on the market. we are entering a lunch break in hong kong. 10 sent, record high. this is bloomberg. -- tencent, record high. this is bloomberg. ♪ >> welcome to the best of

bloomberg markets: middle east. week,a big stories this oil went on a roller coaster ride as output increased. winningdent trump praise from saudi arabia's ruling family. made news with shares hitting highs on merger talks plus the diplomatic row between turkey and the netherlands escalating. president erdogan steering the controversy by calling the dutch fascists. you can stop our foreign ministers plane all you want. let's see how your plans will come to turkey later on. i am talking about is policy not about citizens traveling. we will evaluate all of these accordingly.

they do not know politics or international diplomacy. they are cowardly. these nasi remnants are fascists. >> his relations with the united nations turning for the worst ahead of an april referendum that could give him recoup later powered barely spoke to alastair campbell the former communications chief for the u.k. government. >> i think it is complicated. there is lots and lots of stuff going on. this partly explains donald and brings it. the financial crisis happened. a lot of people felt that those who cause it are carrying on regardless and that the people have paid the price. there may be some truth in that. what politicians are doing like is thisd erdogan ability to exploit anger and to turn it into so the reason in fact no longer becomes what an argument.

>> why do you think the labour party has been able to tap into that anger as much? >> that is a very good question. managedur party is not to adapt to the changes. we have elected a leader who is very much about looking backwards rather than looking forward to different policies. it is very difficult to be in politics right now. likeu look at something brexit, if you look at the arguments, it is quite hard to work out, why did that happen? aboutof the answers are emotion and feeling and people having a sense of something that they want. and saidump did things

things that for most countries, he would have been finished. emotionspping into the and the anger of a certain section of the population that he needed. anger is veryut difficult to deal with. that is what erdogan is doing. it also explains why the dutch made the decision they made. they are trying to counter this populism. it is complicated. i think you are right that i think it is a global thing. it also coincides with a decline in deference for political leaders anyway. and yet, that has had the effect of people looking for these strong leaders. so, erdogan is thriving on the idea of being strong. ,ladimir putin, donald trump

the latter looks at the former with jealousy. >> we are going to talk more about donald trump and a second that we cannot ask you about scotland and i am not talking about the referendum, i am talking about the -- i am talking about the referendum. nicola sturgeon told bbc there could be another vote. >> i think there are all sorts of unintended consequences of brexit. it and illy opposed to think it should be stopped. two of the unintended consequences are the entire makeup of the united kingdom. that might not be the deciding factor. born in the england by my

family a scottish. i am passionately in favor of the united kingdom, but also the u.k. being in the eu. that sense of scotland having a majority to vote to stay in whilst england has voted to come out -- that has changed the dynamic. i think there will be another referendum. in any vote, you cannot predict what is going to happen. i think that the brexit has put the future of the united kingdom at risk. nobody has explict me how you can have the u.k. leave, northern ireland becomes a land border and yet they are saying this can be done without any border patrols -- it would be a disaster. >> iamb curious to hear your thoughts about donald trump's relationship with the media.

you have plenty of experience. how would you characterize his first relationship with united states journalists? >> i do not think it is just about the united states. , a crackdown on the media in cambodia. their defense was, donald trump is attacking the media. the president of america is a global leader. i cannot decide whether it is actually a thought-through strategy. undermineesigned to every other source of information and opinion. that becomes with people listen to and relate to. or, he has blundered into it. it is an interesting thing.

exchanges withh parts of our media but he has taken it to a different level. jamie dimon has said the economy is not going well is fake news. lying. that is a whole different game. steve bannon is say the media has to understand that we are going to come back every day. i really think it is dangerous. it is not that far removed from what erdogan has done with the media, or countries that are last in the cutting than america. >> one more question. if you were in downing street, what would you advise theresa >> in terms of the timing? am not advising her and i think

that the course she is taking, this hard brexit, i think it is going to be a catastrophe. any opportunity i have would be of how you have to think you wish a position where you can allow the british public to have another look at this. this course that we are going in train,re sitting two years of complicated negotiations. when i think the rest of the european union union is thinking, these guys are messing us around so much. i think it is going to be tough, so. she has chosen that path. regardless of the cost. >> quickly, what are the chances?

i think the chances are very high. the prime minister is determined to get this. i think it is going to be terrible. >> coming up, president trump winning praise from saudi arabia . more on that, next. this is bloomberg. ♪

winningdent trump praise from saudi arabia following his meeting with the deputy crown prince. a special advisor went as far as to say the talks could mark and historic turning point. as you say, the language is glowing. very different to the tone from the obama administration. it reflects a sense of relief in

saudi arabia on having an administration that they feel understands their concerns. inhits all the sore points the states. they feel that donald trump will be stronger on iran. percolating, describing them as terrorists. they go out of their way to say that they do not feel that this is an attack against islam. matter ofn internal maintaining internal security. >> you bring up a good point. what did they say about the nuclear deal? out that theyd

repeated their previous position which is that they think that notnuclear deal is something that they think will maintain peace in the region and they mentioned they were happy that president trump agreed with moveon iran's expansionist in the region. again, there is a meeting of minds on the issue of the iran deal which they never thought was a great deal. donald trump made it clear that he did not agree with. ,> i want to bring in our guest director at cornerstone global associates. we have been talking about the language that the saudi's are using to describe donald trump. they even lent support to his

wall idea. what are the saudi's hoping to get out of the united states? region areple in the happy to see that donald trump is back. see whicheally do direction it is going to take. yes, there are issues that need to be sorted out. overall, the relations are positive. is donaldant thing trump's stance on iran. riyadh has this particular issue as the number one priority as well as dealing with islamist extremists.

that should not affect the overwhelming majority of the arab world. things look positive. there has to be a lot of overlap. continuous dialogue is important to make relationships improve. was really only one line about the economic policy. that is what the deputy crown prince is about, the economic transformation of the kingdom. where do you see the opportunities now for american companies, either with saudi investment over american companies invest in in saudi arabia? opening to foreign investors is the key thing.

i think the saudi government is working on that. potentially, the saudi market is a huge market -- potentially -- in terms of other sectors and ones that opens up, there will be a lot of investment opportunities and naturally the saudi people have a lot of u.s. investments. in theeal investments u.s. markets so it is potentially a mutual benefit. ahead, shares of dubai's schwa holdings rising to a seven-year high. little recap that next. ♪

ofyou are watching the best

bloomberg markets: middle east. shares in shuaa holdings soaring. >> the spike in the dubai-based investment bank came after the chairman said he was emerging talks with a larger entities. has hadis a story that a lot of speculation since last year when abu dhabi financial group bought a major stake in shuaa. they have been saying they are going to implement a turnaround, that they are going to make them big again. ownedmpany was previously by an entity of the government of dubai. it has been a while and that they have been saying that they would purchase assets. yesterday they announced it to companies that they are in negotiations to buy right now but the chairman of the company

gave an interview to a local media saying that they are about to merger the company -- it could be a merger, it could be an acquisition -- it is not clear. -- names and situations that may come next. >> this is the big thing that investors have been looking for, evidence of more deals in the financial sector. do we expect more on the way? >> we definitely should. siddiqui was very clear when he said -- they had a press conference to tell the market a little bit more. he mentioned that acquisitions and expansions in strategic markets like egypt, saudi arabia -- are on the radar for schwa. -- shuaa. not be surprising to

see a rally. they were trading 10 times higher than the 30 day average. people are interested. with projected growth, ethiopia will remain africa's fastest growing economy and we spoke to this special advisor to the country's prime minister. growth wouldconomy ,emand new machinery particularly for manufacturing. the current forecast is on generaterformance to revenues in terms of foreign-exchange? developed onehave of the largest industrial -- to generate $1 billion. that is why we are forecast on export performance and rapid economy growth for the exchange

shortage during the early stages and we believe this is short-term. a little bit about the asian infrastructure investment bank. is going to be one of the main ways of getting funding. what about for africa? what about for ethiopia? egypt has requested the membership and how it has been a founding member but it is going to be a member in the second round. the country which has invested heavily in infrastructure, we spent up to 50% of our budget in infrastructure -- multinational, multilateral, international organizations and from bilateral financial sources and also, commercial platforms. >> what projects are you hoping

to help with? >> the main forecast from our perspective is energy and railways, highways, and airports. >> -- >> the dan will be commissioned -- the dam is under construction. [indiscernible] megawatts. $12 billion. poweredhe largest hydro projects in africa currently. energy and transportation are the key we need to develop in order to make you feel be a the manufacturing hub. it is forecast on developing the manufacturing capacity and our vision is to make it the largest manufacturing hub. >> what do you want to manufacture?

>> we want to create more jobs. have, also, multiple , like,, including pharmaceutical. we have a large market for the pharma industry. we also want to use it as a platform for exporting form of goods. >> the indian government has been desperate to curb their loss because record imports have hurt the deficit. persuasion did not work but the prime minister's controversial ban on high denomination notes seems to have. why that earlier program did not work yet go the earlier program had a lot of problems because in terms of the amount of gold that people had

to deport was too high and indian households didn't have that much but now they have reduced the amount of gold you can deposit in the bank. the other issue was getting the infrastructure in place because indians do not have a lot of -- the rural population doesn't have access to bank accounts, so that is another challenge, in addition to making them [indiscernible] -- at why the look falling oil price could be a bigger threat to emerging-market debt then the fed hike. ♪

>> welcome back. , bill chance of going through his proposal to cut funding to boost defense spending earning a lukewarm reaction from republicans. it willpaul ryan said be a long process. saudi arabia says that opec is prepared to extend production in june if global inventories remain high. the minister said that his supplies are still excessive in the markets are not confident that they will fall. the cartel meets on may 25.

been colleagues have cooperating with us quite nicely -- we arek we had our satisfied that we are going to be on track. price fluctuations. the japanese government has denied it will offer state funds to toshiba. the development bank of japan was considering investing in memory chip units. global news 24 hours a day powered by 2600 journalists and analysts, this is bloomberg. a quick check of the market. how are we looking? >> not too bad. we have had that rally across asian equities this week.

we are seeing a small dip in the nikkei today. csi also down. elsewhere, a lot of positive momentum in emerging-market assets. you have also seen a come back in bond yields. points.p 4.5 basis some similar moves in new zealand. soldinly, bonds being today. commodities are a mixed picture. iron ore coming down after that solid rally. if we look at the regional index, it is a brighter picture. you are seeing gains of 4/10 of 1%. the longest winning streak we

have seen since january. we are counting down to the opening in hong kong and china. this is bloomberg. ♪ >> you are watching the best of bloomberg markets: middle east. emerging market borrowers are selling bonds at an unprecedented pace. developing nation bond sales were up ahead of the federal reserve rate hike. to a founding partner. >> one has to recognize that emerging markets are pursuing more orthodox policies. commodities.und in you can see growth numbers improving across the board. we do not want to paint emerging markets with the same brush.

many of them have the appropriate framework to deal with the risks. i am not sure one news to be negative about it. i would argue that their policy framework is just as compelling or more compelling than europe or the united states. >> we have had a bumper year for debt sales in the gulf states. coming the potential one in the form of a kuwaiti issuance. given the argument you mounted and the appetite for emerging market debt, where does pricing come in? >> we should not categorize kuwait as an emerging market because these are highly rated credits which have extremely strong fundamentals from a credit point of view. they have accumulated reserves.

not in the same classification of emerging market issuers. they are definitely benefiting from the demand for yields globally. space, oftene overlooked. it is playing constructively to the further development of financial markets. we have never really focused on building our markets here. of issuance think it is be -- i establishing the region as a serious player. to your question, [indiscernible]

we do not anticipate any issues with this transaction. this would be the sixth member of the gcc -- [speaking simultaneously] i think it is another important milestone and we're looking forward to it. >> i want to pick up on your point. economies in the market. , it at the right time >> not about the market? for the gcc. i think most of the bad news was emerging last year. this time last year, budget deficits ballooned.

people felt that the reform was taken seriously. all of that created a negative environment. today, oil prices are more stable. it is safe to say that the downside remains diminished. then you look at the reform agenda, the fiscal consolidation, the outcome remains constructive. attractivevery because the impact of oil commodities on emerging market industries or even if you think about global credit and investment [indiscernible] exposure -- ishe

much higher. industry is in's government hands. there is very little direct exposure to that sector. fact, when they invest here -- there is zero correlation to the price of oil. you are bidding on the policy framework which on a relative basis remains the strongest in the world. the debt has doubled that there the region.2% for there is very little argument against buying these could is today. >> coming up, oil has been on a cut ride as opec and france while u.s. supplies rise. ♪

>> welcome back. oil has had a roller coaster ride on contrasting data from the gulf in from the united states. slumped. more from anthony dipaola. >> it was differing information coming out. investors were -- the headline we saw was that the saudi's increased production. as you know, it is looking to cut production to cut those inventories those are mainly held in the u.s. and europe. saudi's said that they went

below 10 million barrels per day so that was a large cut for them. they could really get that production off the market. overbruary, they were back 10 million. however, the saudi's were still below the level they set for themselves in the opec agreement. it is important that it was the heavy lifting that help opec come close to meeting those targets in the first month of the year. >> we are seeing producers looking downstream for alternative revenues. ofwe have seen with a lot the listed oil companies in the past as oil fell. they were able to look to trading or refining businesses.

verythe producers who were reliant -- they are also looking petrochemicals two. 1.4ave seen more than billion barrels added. there is an additional quantities expected -- maybe another 20% coming. that is really going to focus on , the fuelsd diesel that the gulf has had to import. crude, they were still importing transport fuels. now, as those are getting toher, they want fuels supply the national economies and exports. they are going to be competing with european and asian refiners . that will weigh on refiners in

the coming years. now, mohammed. talking about oil there. you keep an eye on it, too. if the opec production agreement was about keeping a floor under the oil price and we now have wti, does that mean opec has failed? >> we do not think opec has failed. we do not think that was a surprise to anyone. from that perspective, fiscal reforms remain in place. it is not about the oil anymore. i think opec is no longer the shale producer and less you get an agreement where [indiscernible] they are [indiscernible] longer-term, that would defend on global demand growth.

in the meantime, we do not think oil is going anywhere. >> perhaps it is too early to say that their plan was a failure. if they see the prospect of that extende are not going to the agreement for six months. what message would that center the market in terms of the future of the oil price? the factors of more opec production. if we see a lower price, does that take more shale off the market? >> i do not think there will be an answer. they will it up to supply and demand. it will be oil prices go back down again. back production falls until shale producers become

more cost efficient. findme point, you might cuts by oil majors coming into play where production kind of slows down. it will be a free oil market paired i do not think there is an oil swing producer in the market. i do not think anyone can control the oil price good >> if we have oil prices that are lower for longer that probably makes break even prices more important when it comes to investing in the region. who has the lowest breakeven? mentionedood you that. one of our topics is kuwait. it has the lowest budget breakeven. -- iing levels remain think it is one of the key markets to keep an eye on at the

moment. fiscally, they are comfortable. if they have some capital spending, that could add growth to the economy. -- you aregot talking about the markets here. interest rate rises, which are expected this year, that would oil morely make expensive for people that are not getting dollars at the same time. that puts additional pressures on the markets here at how do you see the markets here reacting to a rise in the dollar price? >> basically, i mean, the rising, rising rates is one of our assumptions. the economy could be impacted because it is correlated to emerging markets.

with currencies -- there might be impacts. we feel the market will suffer from less foreign inflows into dubai, specifically. gcc governments will react by raising rates, as well. so correlations -- are better off. dynamic is important but not as important. >> one of the most exciting stories right now in both oil markets is saudi aramco. your company did an interesting poll about the potential valuation of the oil giant. you said it might be worth no more than $1.5 trillion, below the kingdoms basic $2 trillion

estimate. week had a conference last and we did a survey of a number of questions and one of them was the aramco ipo. there has been a lot of chatter about its worth. this is not my area of expertise . the valuation will depend on the also, whathat -- and shape or form it will take. i think it is too early to answer that question. although these changes and the news flow will be important in determining the valuation. have been hearing about a lot of the countries trying to develop bond markets and get more foreign capital into the market. you mentioned that some of those finances were getting squeezed. maybe getting that capital is a

way to do that. with the interest rate format changing, how do you see markets reacting. do you see them bringing more funding? which markets are you looking at? >> one assumption as well as basically [indiscernible] rate.ives you an interest it is still attractive for a lot of people to invest. with the gcc are higher. i think it is an attractive region to invest in. next, cairo's model of egypt with a ski slope and high-end luxury brands. will the shoppers come? ♪

>> you are watching the best of bloomberg markets: middle east. each its inflation accelerated above 30% in february. inflation accelerated above 30% in february. >> we asked him on developer how rising prices are affecting his business. >> we have been in egypt for almost 20 years. this is not the first time we go through the situation like the current one. egypt has a lot to offer and it is going through very difficult times. if i look at egypt today, i think we are at the end. we start to see the end of the tunnel. egypt has had17, very good progress on important structural reforms.

inflation is absolutely true. this is the result of floating the currency. this will start to offset itself . on the other side, the important reforms taking place -- although, it took some time. steps in theually right direction, and, very tough steps. you are talking about floating the currency. being -- if you look at the market, when they look at the floating -- i'm sorry -- at the issuance that the egyptian government did in january, it was a sign of confidence and i think that the egyptian economy is starting to actually -- is starting to show some positive signs. of course, investments like ours

are extremely important. we are one of the largest investors in infrastructure in the retail sectors. this has a big impact on the local economy. >> you are on the ground in egypt. give us a some color in terms of what you are seeing in consumer demand. are you seeing interest from foreign consumers? >> egypt has a very deep consumer segment and deep consumer demand. the reality is there is still growth in consumer demand. this has been impacted by the last two years. that is absolutely true. bys also has been impacted the change in the offering for the market. driven by the lack in foreign currency. i would say that consumer demand

is still good. we are seeing more and more tourism coming into egypt. we have seen some very good news in that respect. overall, we are positive on the outlook. >> when you look at the region and when you look at potential areas for growth, what catches your eye? >> we look very closely on opportunities. there is a lot of growth, potentially, in the gcc, as well. we are getting deeper in our local markets, but we are also growing in east africa. growth intill room of our current markets. >> that is it for the best of bloomberg markets middle east could this week, we will speak with a health care company. >> that, and all the region's

top stories will be right here for the start of the trading week. that is on sunday morning at 8:00 in the uae on bloomberg television. >>

>> standard chartered boss bill winters said global trade could be set back decades if president trump attacks the wto. he said it is an assault on -- he sediments -- he said i'm assault on agreements would be a bad outcome. icngapore's domestic imports have the biggest increase. increaseds exports 17% in the period.