Our first guest is playing the long game when it came when it comes to investing in the middle east and africa. Bob diamond is known as an optimist and some of it seems to be paying off. The original vision was to in key countries. We are in seven countries. Invest intinuing to union bank of nigeria. I think our focus right now is completing the next stage of investment in upn. Ubn. We really like nigeria right now, we think it is in a better position with the collapse of the oil prices. We think the Agricultural Sector has grown very nicely. We have just made a second very large investment in ubn. Yousef are you in track to double your fiscal year profits . Yes, thats the statement we made and we expect to do that. Yousef other asset sales planned . Bob i cant think of an evening along that line. There were other countries we were interested in become a seven we are in right now, but the focus is completing application. Last year, we acquired a second bankin rwanda and a second and sandia, and we went through the integration, and i am leaving here to go to lusaka to be with our team as we complete integration across zambia. Yousef the union bank story, how are you looking to increase the stake there and when . Do you have the timing pen down pinned down . Just celebrated its 100th year. Until the late 70s it was barclays. It was a strong brand but ran into trouble in the financial crisis. We will able to acquire 20 of it directly from the central bank. We are also part of a consortium that includes 45 other significant investors that had taken their stick five years ago, almost five years ago now. 10 11 stake from the consortium, 20 outside. Additionalsed on an 14 , buying out the position of another consortium member. We are closing in a week or a rights issue that was previously announced, and when all of that is said and done, you will be at 45 , somewhere in that range. Yousef in this part of the world, dubai, have you been able to get hold of any licenses . Bob most of our markets and treasury activities done offshore. We think about the business we are doing in nigeria and rwanda, in botswana, we have corporate clients around currencies and hedging other risks. That domestic business is done through a desk that is managed right here in dubai. One of the reasons for that is this is the right center for us to be on the other side of that trade, to do business with big Investment Managers in the u. S. , wellington, like rock, fidelity as a few examples. Yousef you were bullish on the european story. You were bullish on the 12 years. What are you looking to buy in europe . Bob we have acquired a small greece. Grace in we have appointed a terrific chief executive. We are developing the technology to be a truly Challenger Bank in , taking on deposits in making loans to small businesses. There are opportunities very similar to this in italy, and were working with a number of people on the ground in italy and we think the greeks and italy are at the point where it is time to invest in the banks again. It has been 10 years since the financial crisis. Yousef so the u. K. And mainland europe is not a priority . Bob we think the europe is exciting, but we start with in both greece and italy, some inthe issues hit them First Financial services, particularly in greece, so they are the first recover. Yousef i want you to weigh in on something. We had calls for more transparency, especially in italy. Do you think that needs to be done . Bob if you go back to the financial crisis in 2008 and 2009, he was was very quick to force their banks to clean up their Balance Sheet. Arp program, it put equity into all of the banks. Number two, it required them before paying back that equity, to clean up the Balance Sheet and pass the fed stress test. Finally, it required them to pass the stress test before they could pay dividends. I think the u. S. Banks have been ahead of the curve in terms of cleaning up the Balance Sheet and lending again. This is really just hitting hard in europe right now. In greece and italy, any of these actions to get the nonperforming loans off the Balance Sheet of the banks and into the private sector we think is very positive. Yousef when you look at the turmoil in Senior Management in u. K. Banks, what strikes you about that . How do you look at the scene over there . Where the things we have been able to do in the u. K. Is working with a very strong to acquire aest, u. K. Brokerdealer. One of the things we are ceiling we are seeing is that businesses such as equity brokerage, much of the fixed income businesses, are coming out of the banks in into the brokerdealer space. For us, our investment in the u. K. So far has really been around that, the brokerdealer space. Yousef i want to bring you back to the region, saudi america saudi arabia specifically. To know how your view might have changed now that you have the weekend to think things over and talk to some other people outside of the kingdom. Changed isk what has that for us, what do we do . Invest in financial services. That is our specialty and our focus to it for us, the change from last week is that saudi arabia is a Domestic Financial Services industry, it has become investable again. Our team is looking at in looking at opportunities appeared think secondly, the opportunity to help the Sovereign Wealth Fund to invest in a more diversified way and a more specialized way outside of saudi arabia is also an even better opportunity than it had been feared i think have been. I think the one that is most striking is the opportunity to be an investor in saudi arabia. Yousef how aggressively are you willing to go into the saudi reform story . Has been five days since the conference, not to aggressively yet. Yousef elsewhere in the region, are you looking at anything else . Again,iddle east we are specialist in financial services. He opportunity in this region has been more apparent in subsaharan africa. Yousef a question on bitcoin, it is getting traction as the and in mainstream trade. In yourou place this view of the world, as it is . Bob im not sure i can add anything to the debate around cryptocurrencies. What i do feel strongly about is that a lot of the talk someology that underpins of these currencies, block chain , is having a big impact on banking. Not just commercial banking, but central banking, as well. I think the announcement recently by the Central Banks of hong kong and singapore they are going to work on a joint project to implement watching as the Core Technology underpinning both Central Banks, i think that was a very important story, i think its worth following. Yousef coming up on the best of Bloomberg Markets middle the u. S. President confirms his fed chair pick. We spoke to the middle east ceo on what that means for the region. This is bloomberg. Yousef welcome back to the best of Bloomberg Markets middle east. President trump made a decision about the next fed chair, he is going with jay powell. We spoke with a middle east ceo about how that will impact the region. Take a look. I dont know enough about Jerome Powell, but i dont think it makes a big difference to the trajectory of monetary policy. It is quite clear the labor market is tightening. The economy in the u. S. Is doing quite well, even for fiscal stimulus that may come from tax cuts. Extent, wethat should expect a continuation of the gradual tightening and also the unwinding of the Balance Sheet. I want to bring to your attention this chart from morgan stanley. The guidance we are getting is that we are going to get a december hike, but when it comes to the actual official ,nnouncement of Jerome Powell some are saying to the opposite. Whatever you are expecting with the powell pick, do the opposite. They think it will be a kneejerk reaction. What is your take . As i said, i think the market jerome discounted and powell being the next fed chairman and the trajectory of interest rates. I dont think we are going to see any kind of kneejerk reaction or unexpected move in the market. I am of the opinion that consensus rains. Yousef if you look at the bahrain story, how much of a concern is it that this spirals out of control . It is very important to put the stop on the speculation straightway. The cost of supporting bahrain is relatively low at this stage. However, i think in the longer term, there is a concern about the ability of the peg to be maintained throughout gcc. That will depend on the success of the diversification strategies being put in place currently. Yousef what does the say in terms of the wider regional story of reform . Because raman was always the weak link. Contained, is there a risk this could spread to the rest of the region in terms of ask, in terms of jeopardizing weak economic story . Been justin has not bahrain, but if you will call if you recall a year ago, saudi arabia. Havely bahrain and oman moved to do in terms of defending the peg. Bahrain has been aggressive in its reform program. I think they can go through this difficult period, it will buy time not just for itself but the rest of the gcc. Yousef your view on what is going on with the regional markets it is not just lackluster performance. We has put this up, the world record for the record indices. This is what you put on your notes that you sent us hours ago. A lot of the worstperforming indices are featured in this part of the world, you are , aking at abu dhabi, oman reminder this is your today you are looking at. Going to change anytime soon. That is the argument youre making. That is correct. If you look at the Economic Growth across the gcc, the imf is saying when 5 for the year, that is is saying. 5 for the year, that is pretty poor. This is lackluster, as you say. There is no visibility in terms of how quick that will change. Under those circumstances, it is difficult to make a positive argument for the stock market. Want to bring in some bloomberg headlines across the terminal right now, kuwait sees oil output cutting extension being knows being announced of the and appeared others may be announced in february and march. I guess that goes not only to the oil price, but where do you think this is going to go in terms of oil price for 2018, expectation, and as it faces up against Global Demand . Look, well prices have been anybodys guess for a number of years now, but the consensus seems to be a range between 50 and 60. I expect that to be the case for the foreseeable future even with the announcements you are talking about. There is the possibility we could see a spike higher in the event of some geopolitical event in 2018, but if we look at the fundamentals, as far as we can see them, it is difficult to see a number that takes you much above 62 at this stage. Do you think the implementation of further austerity we have seen in the gcc region, what we heard from the imf in terms of what this region needs to do, is going to continue . Tarek i think so. This speaks to why i remain somewhat cautious about the local market. Having said that, there is increasing murmuring that saudi arabia may release a larger than expected budget for the new year, or frontload the spending for 2018. That maketh the markets a little bit of a boost. Really, in the grand scheme of things, and fleshly, when economies transform things, and unfortunately, when economies transform, that requires a period of austerity and pain. Yousef with every major transformation, there comes opportunity. You said you are treading cautiously. A lot of risks are needed to keep in mind. What are you telling clients in terms of how to capitalize on this reform process . How do get exposure to the reform story . It is difficult through the listed companies. Generally these are the incumbents. When you see transformation in the economy, it tends to be emerging companies, entrepreneur led companies, and we see it here in the uae and saudi arabia. Listedre not many but one company is a disruptive. Private equity may be one way to play, very difficult to play it to the listed securities market. By the beginning of next are, there will put there will be a lid put on consumer spending, while there . What you think about impeding further what little Economic Growth they can safeguard . Unfortunate, it will. We see this wherever taxes are raised. In december, we get a slight bump in demand. Yousef make sure to get a good deal. Tarek and it falls off sharply in january. This is another reason why the markets remain fortunate. It is difficult to make predictions for next year. Yousef coming up next on the best of Bloomberg Markets is looking, bahrain to its neighbors for cash, that it may have to clean up its own act the see the money. We have all the details, next. This is bloomberg. Yousef welcome back to the best of Bloomberg Markets middle east. Lorraine has reportedly asked its role europe allies for cash bahrain has reportedly asked its gulf allies for cash. The request has yet to be for filled according to people familiar with the talks. Rain is being pushed to rein in its finances in exchange for the money. Our editor has more. You look at their reserve situation, down to about 1. 4 billion in august. They raised 3 billion from the bond market in september, but you ask anyone, this will only be part this will only cover part of the deficit. If you look behind the assets, everybody was pricing the factor over the saudi bailout. Even in june, saying we continue to factor external supports into the ratings. That was expected. Yousef i want to focus on what were doing in bahrain in terms of the concerns around the story. What happens next year . Bahrain, arguably by inside, not necessarily a risk in that front, but because it is so closely tied to saudi arabia, it could be the beginning of a domino series of after effects of something happens. Correct, thats why the consensus among investors is the cost of helping bahrain is lower than the cost of training up the mess of a valuation that could basically ring attention to other vulnerable countries, for example, others who could be under more pressure. That is why everyone is expected expecting saudi arabia and others to come to bahrains eight. Isist is farming was bahrain was told they have to show more sense they are bringing your finances under control. Imf numbers show it will still gdp out of the gcc. Yousef what happens if they dont get bailed out . What if it does happen . Question becomes, is it a onetime bailout, or a stopgap, or is bahrain going to be a regular recipient of that . These bailouts have allowed them to tap on markets every year and raise rates. 50ad 50 your pager your paper for the first time. Yousef next on the best of Bloomberg Markets middle east, is ipo on the uae markets set to close in. Whether it will open the floodgates. This is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Yousef welcome back to the best of Bloomberg Markets middle east. Im yousef gamal eldin. Ipo drought is set to end. Asre will be raising as much 1. 5 billion for the ipo of a Development Business they could be the biggest share sale since 2014. We spoke to the head of Investment Strategy at abu dhabi commercial bank. Weve seen a decoupling of equity markets from the oil price, which means there is a search for something more coming out of the gcc. And that something more has to be more economic reform in the i think the focus in this regard is really on saudi arabia, and from that respect even though we sort of have this davos in the desert last week, with a lot of talk about the new city on the red sea and ideas for the Investment Funds to invest more abroad, the issue is that the need to be more clarity of reforms, in my opinion, whether its weight on the markets have done on the market, and in particular the aramco ipo. Its different to do a local ipo, rather than yousef speaking of ipos, all eyes on the subsidiary it is going to come to the market and in the drought in the uae. How much demand do you expect . Is it really going to price at the top end of the range . Luciano that is difficult to say. What i would like to say is that dubai is a special case in the old gcc area. I think dubai, we have seen the not device is not an oil story. I think it will do better than many people expect. Weve seen Economic Indicators into by doing better than other countries in the region over the last year. So i think as far as emaar is concerned, i would be optimistic. It seems to me a bit tricky, but i think they could do rather well. Seem to be mentioning the oil price a lot. I want to get your thoughts, what oil prices at a twoyear high does for this agenda. It seems when you need to change the structure of the economy, or the call for change happens when times are not good, oil at 30 levels, am at these i right to assume the appetite for reform has been taken down a notch or two . Luciano i think it could be different this time. I think the oil price is increasingly determined by supply rather than demand. I think that is the long trend that has started in 2014 and it will remain there. There is an awareness of that. There is an awareness that supply will determine where determine oil price, and that is something producers are aware of. They need to reform their economy, too, they cannot depend on Global Demand for a long period. I think the idea is that structurally, if you look especially at the dollar weakening and will price the going up, that is confirmation that the oil price depends mainly on supply nowadays more than demand. Now, that is a structural issue that the producers have solved. They are continuing to confirm cuts in production. Now the issue is, are we going to ref