david: it is noon in hong kong. here's is an update of your top stories. a vote on the stalled health care bill. called the freedom caucus forced a delay, demanding a broader repeal of obamacare. the chairman says he does not believe negotiations with the white house are open. shareholders of samsung have said plans to split the company into a holding group and operating group are not easy.

the galaxy eight is due to be launched next week. toshiba, soaring the most after the hedge fund announced it is becoming the biggest shareholder. global news, 24 hours a day, powered by more than 26 hundred journalists and analysts. this is bloomberg. watching stocks fall closely in hong kong, that one down more than 90%. wide.r we will see what happens next, this is bloomberg. >> welcome to the best of

bloomberg markets middle east. electronicn on devices. we took a look at the impact on businesses. another downgrade for turkey. moody is cutting its outlook. a prescription for success. plans to issue bonds to fund acquisitions. arabia says the rating cut was not surprised. we spoke to the global head of the rating seed. here is what he said. >> the primary reason is the lower impact on oil prices. deficit of almost 18% of gdp. and an enormous fiscal challenge dealing with lower oil prices. the government has a plan to deal with that.

we think the deficit is going to be lower. a country with the government debt of zero and now it is rising. ask that only has been moved up from stable. >> the outlook is stabilized. >> does this cast more doubts on the reform, cutting state subsidies? or does that plan help improve the long-term -- >> if the plans as we understand them were implemented in full, saudi arabia will be transformed considerably. we think the world be difficult to implement in them in full. be a is going to restructuring of the economy but probably not to the degree the government would like. ambitious agenda. medium to long-term. it cannot be fixed in a year or two vendors.

>> is the fundamental still in place? a couplengs are still of steps above s&p. >> we think it is a single-a credit. the government debt, even though it is rising, is less than 20% of gdp. compare that to countries with similar ratings. there is some room for the saudi arabia authorities to incur debt. but starting from a low base. this reform agenda which includes moving a part of saudi ipo, does that improve the outlook down the >> i think the overall agenda is to raise the profile

of the private sector. there is an initiative to it increased private sector employment. there are demographic issues, a young population. the government is no longer capable of providing all those jobs. there need to be alternative sources of growth. the private sector can provide that better than the public sector. price, if itil help?bove $60, >> absolutely free of we are expecting a deficit of close to 8% gdp. >> the country's oil supply minister says cuts could be extended if necessary. he thinks markets are still not that confident about the

outlook. take a listen. >> our objective in doing what we do is the fundamentals. is driven by bringing supply and demand into balance. encouraging investment flows. sure global inventories are back to where they should be in terms of long-term averages. that is where i have my eyes focused on. those factors are not one that can easily be managed. there are too many variables at play. we are on course. i think the fundamentals have significantly improved over the last few months. prices will fluctuate up and down. there are other factors like speculators. currencies.

i think looking at the fundamentals, i am quite satisfied we are moving in the right direction. also, my colleagues from oil-producing nations have been cooperating with us quite nicely. i think we are satisfied we are on track. daily or weekly fluctuations in , do not get my eye off the ball in terms of fundamentals. trigger ford be the fellow oil-producing nations to say, maybe we better cut some more? >> we are looking at global inventories. transparency is not perfect. it also takes time. for inventories to correct. demand in the first quarter is not the highest.

it has taken time for some of that data to show. we believe we are on the right track. i think some time midyear, we we are.k at where it is premature to make a determination what to do. this will take its course. my colleagues from other equally committed. i think later in the second quarter, we will look at what needs to be done to ensure those fundamental factors are achieved. >> you are watching the fundamentals. at the six-month month mark, it is possible you will sit down and extend the cuts? >> if it is needed. if inventories are still above the five-year average, for example.

the markets are still not confident in the outlook. if we do not see companies and investors feeling good about the of the global oil industry. we will signal to them we are doing what it takes to bring the industry back to a healthy situation. beatr: coming back, and up sssessment on the natural ga pipeline. coming up next. ♪

anchor: you are watching the best of bloomberg markets: middle east. israel's energy master -- tester is confident talks over a pipeline with turkey to conclude over the summer. >> we started a half year ago

around of talks with the turkish government. the gasose is about pipeline exporting natural gas. another discussion is much longer. export gasable us to to greece and italy in the near future. >> you are making progress when

it comes to the talks with turkey. egypt, has int, peter durability. how much progress have you made their? >> there are some discussions i am not going to elaborate on thet exporting this to energy facilities. reference toome the general idea. the general idea is very clear. the mediterranean basin. maybe also lebanon in the future, put together. it will be some sort of replacement. in the past, there were two main sources for natural gas. siberia and the northern sea.

sea -- then potential in the eastern mediterranean is very big. the idea is to build this in order that them east mediterranean will replace the northern sea in the future as a very reliable and significant source of energy, natural gas, to the european union. >> you have also talked about to greece and italy. who is paying? i couldn't hear the entire question. aere was already feasibility study. although this is going to be the gas pipeline in the world, the longest and deepest stretching from israel through cyprus and greece directly to italy, we have found it is

economically feasible. and technologically possible. , the beginning of april, the italian energy minister is coming to israel. we already have conducted several rounds of talks with the energy ministers. somepe to conclude framework. cyprus, greece, italy. my understanding, in order to pave the way for this gas pipeline to take place, my vision is three years from now, we will be able to export natural gas to turkey. six years from now, we will be crosso complete this mediterranean pipeline. >> when it comes to the pipeline

-- when it comes to the pipeline, do you have a plan on where the money will come from? probably it will be a private sector project. feasible.ercially this, we have to conclude over the next few months. g.e type of g to some sort of understanding about the regulatory system. an understanding between the exporters, mainly israel and cyprus, and the consumers, currently greece. the main consumer will be italy. such natural gas supply might also replace some

of the supply coming from north africa. let's put the energy story aside. talk about the political situation. benjamin netanyahu has threatened to go to elections. do you support him? >> we are running a very vibrant parliamentary democracy. we have to have coalitions with many different parties. i hope the current dispute between the parties will be over. are beinguch crises resolved in few weeks time. i think israel needs stability. i think most people in israel do

hope and really believe this current political crisis, dispute, will be over in a few weeks time. i take you don't support that. you don't to get is going to happen. >> no, i think the prime i don't want to about how to much arrange media in israel, but i really believe this little dispute between the prime minister and the finance minister can be resolved. it is not a very big dispute. do believe if we speak a few weeks from now, we might forget

hopefully, there was a dispute on such a crisis. speaking, it is quite stable and this might be over soon. >> the relationship between the trump administration and prime minister netanyahu seems to be a bit tougher than initially forecast. is this a problem? >> i think the relations are good and going to be very good. i think the meeting was very good and a very friendly meeting. actually, they know each other for already to bring decades. visited washington last week and i met with my colleague. the new secretary of energy, rick perry. it was a very friendly meeting. we discussed how to collaborate between the u.s. and israel on private security.

for power stations, the electric grid. natural gas. be a very bigto issue. ed the ways and encourage american israel companies -- energy inpanies to get involved exploration phases. it seems as if most of the natural gas has yet to be explored. >> let me jump in here. let me jump in here. tensioneeing increased between israel and syria. how likely is it this will escalate into a war? >> our policy was very clear so far. despite the horrible brutal civil war, unfortunately, we saw

many casualties. we decided not to interfere weres our direct interests under threat. what is forthcoming is even more interesting. reason --hat the to exposenian attempt syria into some sort of extension of iran. ofmake syria some sort iranian -- this is a threat to israel, and all of the arab world. the whole arab peninsula would encircled by iranians in the east, in syria. also in yemen.

syria should not become an extension of iran. toup next, she'll plans invest in iran. we will have more on that story ahead. ♪

after international sanctions on iran were relaxed, iranian americans started to look to invest their money in their homeland.

of donald trump is prompting some to think again. >> with the government estimates, some of their assets, assets a manage, or equal to about $2 trillion. iran canommunity, stand to benefit from this community. especially in the u.s.. prominent americans of iranian dissent. the founder of ebay. the effective chairman of twitter. companies with iranian americans behind them in silicon valley. is mindful of the fact that it could benefit from this community. the iranian president and his first are to the u.s., as part of the un's general assembly, had a message for them. hand. extending our

a very welcoming tone, wanting them to come to back to the country or at least invest. >> where can we expect iran to use this? we have to remember, until sanctions were lifted or at sanctionssections -- were lifted, iran had been for about a decade start from technology and investment because of the strict sanctions that existed on the economy and energy. that means that the money that would come in, iran needs to overhaul its infrastructure, its oil industry. it is looking to expand its international airport. one of the first orders iran put for 200e sanctions was jets. a lot to do there. >> up next, turkey gets its credit outlook downgraded.

shows no signs of dying down. just ahead. this is bloomberg.

>> it is 12:30 here in hong kong. top tradeobama's negotiator said the trump government desire to leave the tpp is an error. >> of those things, the only one he has done is indicate the u.s. is in a withdrawal from tpp which i think is a terrible and creates a void to china is filling. which will affect not only our economic but strategic position in the region. has raisedlanka

interest rates for the first time since july. it was a surprise decision. now this six-week strike in chilly, the copper mine, ending all the workers will return under their old labor contract. unions will invoke a rare provision to invoke the old deal permit they will not have to pay a bonus but must renew talks. global news, 24 hours a day. >> we are seeing a rebound in australia. leading gains of about 0.8%.

japanese shares, easing most. the yen stepping its longest losing streak since 20 11. the philippines on the rise today. pressure after the executive apologized to shareholders for the involvement in the political scandal and the note 7 debacle. check this out. a plunge of more than 90% for the stock in hong kong, wiping out market value. outill see how this lays one hong kong opens at the bottom of the hour. china's largest dairy farm operator. a look at the big picture. equities rising for the 10th time. inugging off the declines wall street. asian financials of performing

their global peers. top of the hour, that is what we are looking out for. this is bloomberg. >> this is the best of bloomberg markets: middle east. creditrkey's outlook to negative. we spoke about the cuts and also heard from the deputy prime minister and the head of mineral research. >> we knew the referendum was coming up. it is not unexpected. nothing they said was a surprise. whatis kind of in line to rating agencies do. >> one thing that surprises me is the reaction in the market. if you look at turkish

government on spreads compared to u.s. treasuries, they have been trending down. we have also seen a rally turkish docs, close to a record in 2013. why is there a discrepancy between the rating agency and what investors see? asked this is happening in an yen rally. a lot of positive sentiment. rallying. has been turkey has been benefiting. a lot of people have been living with these risks. none of this stuff is new. skins.do develop thick >> we are going to talk more about that in a second. the turkish deputy prime minister said the netherlands actions during a diplomatic dispute defy logic. relations between the countries have they come strained after turkey arrested a dutch journalist.

take a listen. concerned,s that is the treatment of the turkish and the turkish of course protesters who were there to welcome the minister, certainly doesn't comply with european standards. responsehe dutch defied logic. europe is open, usually. there is freedom of speech, freedom of gathering. it was a very unfortunate incident. there have been words, statements in anger and frustration. i think it has to be taken within that context. fors it difficult to argue freedom of speech if you jail a journalist? not saying everything that happens in turkey is perfect.

what i'm saying is turkey has gone through a different get -- difficult time. existentialwith threat in terms of terror. the democracy survived of violent coup attempt. look below the surface, i don't think we can understand each other. >> with the passage of the referendum, which gives the president more power, help these things? or make them worse? the president himself has referred to the dutch as nazis, even though the dutch were the victims of nazis. >> i hope, the outcome from the referendum, could serve as a catalyst. a closure to put behind this difficult episode.

the system problems will be settled. i don't think the new constitution gives president new powers beyond what he already exercises in the form of government. what we are doing is this. we consolidating essentially the powers of prime minister and theident in one hand, executive branch like everywhere else. the turkish presidential system is really no fundamentally different than the u.s., what they have been practicing for 241 years. or france. deputy was turkey's prime minister. i want to bring in our guest host. she is head of research for irites.s -- em

we're talking turkey. we have political trauma with the european union. the other, economic drama. the interesting way of tightening monetary policy turkey has embarked upon. how do you see those twin developments unfolding? >> i am not sure they are entirely unrelated. if we look back at turkey's byelopment, it was driven the eu convergence story. the idea the turkish economy would move toward eventual eu membership that was a driver of investment and growth. stabilization of economic policy. more in line with what the eu would want to see. this that with the netherlands the signs the political relationship between turkey and the european union is kind of moving further apart, disintegrating, i think begs the question whether the story is

still relevant. if not, what is going to anchor turkey's economic policy? are we going to see the sort of reforms, what direction is turkey's economic policy going to take? that is a source of uncertainty. we are not talking about portfolio flows. we are talking about real investment into what is potentially one of the biggest economies in the region. and whether that is actually something that is going to be supported going forward, or investors are going to take a step back. maybe we don't want to be as bullish. >> you mentioned investors there. excellent point what is happening with turkey has been happening more broadly with emerging markets. we have seen a stunning rally thanks to the dove hike from the

fed. the softer dollar rebound. how much further could it go here? >> according to the data, it can actually go a little bit further. we have seen the rally on friday. it didn't rise that much. is actually an opportunity for investment, still. you have a lot of cheap assets across e.m. mexico is cheap, south africa still cheap. you have a long way to go. u.s. stockpiles expected to expand. let's get more on this story. economists.odity great to have you on the program. i put the state of play on a chart, showing how much will opec is bringing.

it tells the story of how the u.s. inventories are offsetting efforts. are we reading too much into this? that is what goldman is saying. it needs time to work through the system. is that something you agree with? concern for the oil price is because of u.s. -- i think markets have been overly concerned about this issue simply for a few reasons. the higher inventories came during this time, by the refineries. this could be a seasonal thing. at the revisedk oil production by the department, they are forecasting

9.2 billion barrels a day. if you contrast to this with the fall in oil production, the forecast, look for 1.2 billion barrels. >> is the opec strategy working? raise their game and take more oil out of the market? >> the contrast between the higher u.s. oil production and , if youing production notion fundamentals, the is the rebalancing story, the second half of 2017, seems to be on track.

it is key evidence to show the glut continues. >> coming up on the best of bloomberg markets: middle east, we hear from the company's newly appointed ceo on his prescription for success. ♪

of bloombergt markets: middle east. after a strong earnings report, it is now considering issuing bonds to fund acquisitions. we asked the ceo how abu dhabi's new insurance rules might impact performance for 2017. ask there are a lot of changes happening in the last few years.

one is a co-pay which made a big change in the insurance industry. pay understanding of the co- was they need to be able to take e.re of the citizens of ua over prescription, overdiagnosis, needs to be stopped. we have in as an institution weusing on it to make sure are aligned to our goals and the goals of the administration. we are celebrating the 45th year, and have been a part of the health care industry. markets --saudi inyou have invested a lot that market. >> the family.

definitely. gaps in the knowledge industry, the health care side. a lot of changes happening after the oil prices came down. less investment. given the sweeping changes overcoming the gulf health care industry, we have seen some consolidation. one of the reasons your profits came in quite high for this year. you have more to do on that front? been following a particular strategy which we announced in 2015, on the back of which we started consolidation. that is what we have been doing.

thanks to the best doctors and the management. we will look at all opportunities which will make sure the health care industry is on the right half of growth. >> are there opportunities you are looking at right now? you did expanded the fertility business. >> it is difficult for me to pinpoint. globally, a lot of assets are available. all of them are on the verge of sale. the possibilities are there for us to consolidate. we are also looking at markets where the knowledge created, the platform, can transcend. >> what sorts of geographies with those be? important --ia is

an important geography where we want to focus. the knowledge we created in the uae needs to go in saudi arabia. maternity and fertility. knowledge we have acquired in long-term care, helping us to grow in the saudi market. >> in terms of funding your expansion, what are you looking at a right now? could you borrow money and loan format? we have seen a lot of demand for fixed income assets recently. >> the family. if you look at our balance sheet, we have been very financially savvy. when we announced the 2015 strategy, we were able to raise a $25 million at 100 basis points. when we acquired a brand, we had to pay at $60 million. $560 million.

it.ill continue to look at the balance sheet has space for acquiring debt. at the same time, the fixed income market is very interesting. we will look at it. at the same time, we are somebody that wants to make sure there is a proper leverage. proper equity to get level maintained. the money should be used for acquiring us. virtually 400 bets are fully matured. 600 have yet to mature. 2017, it hassee in yet to get the benefit. next, airlines across the region targeted by washington and london. this is bloomberg. ♪

you are watching the best of bloomberg markets bital east. the airline industry thrown into turmoil after the u.s. announced andn of electronics carry-ons from certain countries. >> you would have thought they would have come out more aggressive or played the protectionist card. i haven't seen any of that. amorites came out with a tongue-in-cheek reaction saying, on twitter, they put out a video saying we have 2500 channels you can watch. who needs laptops?

reaction, we have to live with this. they might get together and see if they want to play the protectionist card. >> i got back from tokyo. i had to defrost my back. -- bag. has joined the bandwagon. could this go further? only the laptops being damaged, but if you have sensitive information, proprietary information, you probably don't want to put that in a hold where you won't be able to see if anybody is accessing it. in terms of who was following, the u.k. followed very quickly which would perhaps indicate they had had some sort of heads up. canada had a discussion where they said they would mull it as

well. i don't think anybody can afford to not have the u.s. market. nobody wants to be viewed as the weak link. everybody is looking, do we want to follow this. a lot of airports, you don't have separate security checks, depending on where you are traveling to. if you are dubai, you say, do we want to look at doing this for everybody? or have separate areas to go through? i think everybody is probably in their contingency planning rooms to see how they are going to come to terms with this. >> especially passengers that have to go through those airports. you mentioned a reaction from airports, airlines. what about the government reaction coming from different countries? >> there haven't been any government reaction. be the case they are trying to get to the bottom of it. certainly all the reports we saw come out overnight were there

, theome sort of threat somethingel suspected may have been imminent. from that point of view, it is difficult for governments to come out and take issue can read at the same time, they are strategizing. these so-called super connectors, airlines, they have a lot to lose. if you are in singapore firm mumbai, you don't have to go through dubai. they are very vulnerable from that point of view. stronge facing headwinds. i suspect they are getting together. we will get some sort of reaction in the coming days. it out of the gate, everybody is telling . -- towing the line. yousef: that is it. kuwait be live in speaking to key energy ministers. we will also get more

information on the decision to restrict electronic devices from certain cities in this part of the world. we will be here sunday morning at 8:00 on bloomberg television.

♪ it is 1:00 p.m. in hong kong. trading after losing $4 billion of market value. it is not clear what happened. short seller muddy waters the company is worth close to zero. has tightened home lending rules to curb risks. newly divorced couples will be considered second home buyers and lenders cannot offer mortgages using leveraged products as down payments. prices are rising again after a brief drop.