Yousef it is 8 a. M. Across the emirates and 5 00 a. M. In london. Angie it is just past noon in hong kong. Welcome to Bloomberg Markets middle east. We have gotten a lot of news coming out of asia. Really thing that is threatening the markets is oil. Manus it absolutely is. When you look at the oil price, just eeking out a small gain this morning. Have a look at the chart. Combining the relationship, oil and equities. The white line is the world index. Oil is the other one. Dropped over 5. 5 since opec officials got together on friday. Growing quotas discord. A lack of confidence in terms of the oil market. Doing a deal, getting everything together with opec. 40 if the deal does not go through. The bank of japan this morning, i love their opportunism. 60 for the bank of japan. The secretary of general spoke to was yesterday and you are focused on that. Angie calling for unity for the organization as it will have a supply deal next month. Took anptember 20, opec allinclusive decision to restore stability to the markets. All our member countries agreed to limit production. Angie deal or no deal. If barkindo had anything to say about it, that was his view. Lets check the market. Mumbai has been trading for 20 minutes and it has been gaining. Stocks speaking, asian really reversing losses today. Zinc climbing after unexpected pick up in chinese manufacturing. Rba making that decision on rates at 1. 5 . We saw the aussie rise as well. What about the middle east . Two hours away from the start of trading. Lets check it in terms of dubai and abu dhabi. We focused on the cross yesterday. This is how the equity markets finished the day. Oil up this morning. You have a nice gmac chinese data, the pmi data that will shift the dial in terms of discussion on what is going on in the markets. We have a look at the u. S. Equities closings of last night. You look at the index in the states, that is drifting higher. I will call it flat. Down by a 10th of 1 . We are building up, a stronger dollar. We are building up to wednesday night where no change is expected. Lets get up to speed. We have some headlines. Haidi with the first word headlines. Good morning. Haidi hey. Governor has keptasla it unchanged. It was held at a record low rate at 1. 5 . It isntral bank says accounting for inflation. The bank of England Governor Mark carney says he will hold the top job until 2019 to guide the economy after brexit after months of speculation. Philip hammond welcomed the decision. Some conservative lawmakers criticized carney, calling them political. Pulled backuse has against accusations from some democrats that the fbi case isnt a very with the president ial election. The president obama Spokesman Says he does not criticize comey reopening the email case of hillary clinton. He is a man of integrity, a man of principle and a man of good character. The president does not believe that director comey is intentionally trying to influence the outcome of the election. He does not believe he is secretly strategizing to benefit one candidate or one political party. He is in a tough spot. Haidi officials have arrested the editor of a major newspaper on suspicion of involvement in julys coup. Renewedt erdogan has his purge after the uprising and promising to restore the Death Penalty for treason. They say it is the end of Media Freedom in turkey. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Angie chinas stabilization continues into the Fourth Quarter as official factory games rise. Services also advanced. Here to talk us through it is tom joining us from beijing. What is behind this rebound . Tom i think it is a story about it gaining traction. At the end of 2015, the rate cuts. Beginning of 2016, we had booming credit numbers. We have had loosening in the real estate sector throughout the year. All these factors together have now finally started to gain some traction in restoring a bit of momentum heading into the final month of the year. There is a wonderful story you guys have written. The benefit and boost from a lower yuan. What is the next policies that . Is it fiscal, monetary, currency . What is next . Tom i think we are at a moment of policy transition, manus. The start of the year, china was still very much in stimulus mode. They were focusing on supporting growth. What we are seeing now is as the stronger numbers are coming through, the focus for policymakers the shifting towards controlling more mediumterm risks. We have had major cities introducing controls on speculations in the property market. We had the bureau announcing the main focus was no longer going to be supporting growth. It was going to be controlling asset price bubbles. There is a shift in policy away from Program Towards progrowth towards controlling risk. Manus it will be interesting to see how they control their growth. Tom, always great to get the input of your analysis. Lets get a perspective on the data and the chinese story. We have our guest, the ceo of namura asset management. Thank you for joining us. Factory orders, twoyear high. Services improving. It is a good global story. The relationship of the uae with the world and how that ranks in terms of china. China is the second biggest relationship for the region. Good news today . Absolutely. I think the chinese economy has been on the upside this year it back in january, we had the yuan depreciation, and there were lots of stories of how that would drag down Global Growth this year. That has not happened. We see the chinese economy has managed to outperform all expectations. Im particularly impressed by the factory and pmi numbers of thatcame out because outlines the shift of the manufacturing and nonmanufacturing. Good news for the region. I think you saw earlier this month last month, the uab changed its policy towards chinese visas, or applications. There is definitely an opening up to the chinese economy. Angie well, tarek, when you take a look at the chinese economy, it does show stabilization. But the question really is the policy outlook right now because the first half growth was all about that investment led infrastructure and the like. At what point when you have such a debt ridden nation that that will continue . Tarek very good question. Clearly at some point with debt to gdp running north of 250 , that is a very difficult situation to maintain. I think the key is how quickly we can transition in china from a manufacturing led economy towards domestic demand. I dont know many economies that have done that successfully quickly. At some point, there will be a hiccup in china. We expected this year but it has not happened. It is definitely something we have to watch out for probably in 2017. Angie thank you for that. Stay right there. That is the chief executive officer of nomura management. Right now we get the latest in the markets with david. Is thevery decent day best way to describe what is happening. The things we just talked about, pmi data out of china. In some ways, it is really helping to keep thing stable. If you do look at the 51 number. Before the numbers came out, it was in the red. Now we are mostly on the way out. In the hang seng, it is really leading what is happening across the region. That being said, there are several weeks spots. Australia, down 8 10 of 1 . You always have to think about volume as well. Right now, you are actually getting volumes between 8 . A little lighter compared to this time of the session. Generally speaking, a 30 drop in volumes. An uptick compared to what we do get in november. Hang seng, i mentioned that. 23,200. The nikkei 225 going about. It cannot write right in the middle of the lunch break in japan. It is opening higher. A lot of this comes down to the japanese yen. Now, that said, you look at these two things very interesting graphic because you rarely see this out of japan correlationve the between the yen breaking down. For the first time in a year, for only the third time in the last five, both of these things are correlated. Very interesting development. Much of a Risk Appetite here. Manus all i want to know is whether you had a Winning Ticket on the gold cup there. David with the very latest on the markets. Chairman wanted, that is the call. We look at the candidates for the top job. Next, change in saudi arabia. Why has it replaced its finance minister . This story is next. This is bloomberg. Angie welcome back. You are watching bloomberg. Im angie lau. Manus im manus cranny. Saudi arabia has replaced its finance minister of nearly two decades. He has been ousted in favor of another man who used to head up the Capital Markets authority. Lets bring in andrew. Are you surprised by the move and what do you make of the new man . Andrew im surprised by the move that it was not telegraphed. At the same time, we kind of knew this was in the cards. We had a changing of the old guard. Of the positions were held for years. Is replacing a lot of these old guards with younger, often less experienced but more energetic, more ambitious to try and bring the change he needs to get through quickly. Angie can this man help saudi arabia . Andrew that will be a big part of his job. We had the bond sale of 17. 5 billion last month which was the biggest for emerging markets. Saudi arabia ran a budget deficit of 100 billion last year, 16 of gdp. They need to bring investors in. They are trying to get more qualified investors to come in. They may start with the bond program. Not only do they have to sell it to external investors, but they have to sell it domestically. Ministering finance was on tv last month to talk about his austerity package. It did not go so well. He was criticized. A large part of the job will be to sell this domestically and get people on board. Manus the honeymoon period may be over for vision 2030. Thank you for joining us. Lets bring our guest back into the conversation, tarek. Changing of the guard is about appealing to a broader base. There is a lot going on in saudi. Give me your perspective. Tarek it has been a very challenging year for saudi arabia. One of the issues andrew touched upon his we had an offloading of the Austerity Program which has led to a very difficult fiscal situation, a challenging fiscal situation for the kingdom. I think perhaps now we need to see some positive catalyst for the markets and i think the new finance minister has to offer one side of the equation, but the other side which is the benefits that accrue from the vision 2013 plan. This isow much of really optics . Of three officials who turned up on a popular saudi talkshow talking about austerity, talking about this new age in saudi arabia. Hes got a lot of criticism. How much of this is now, you know, payback . Tarek i think part of it is optics of course. There has been some bad communication perhaps recently, but also, the reality is that we have seen salary cuts. We have seen higher bills for the average household. That needs to be offset at some point by some positive catalyst. I think it is time to deliver some of the promise of the vision 2030 and the National Transformation plan. These are very long for rims programs that we need to get some milestones in the interim to give people some encouragement that this is the right plan. Ngie tarek, stay with us he stays with us. Next, the bank of japan appears to be prioritizing its inflation. When it might reach the target. More on the outcome of tuesdays meetings. This is bloomberg. Manus welcome back. Im manus cranny in dubai. Angie im angie lau in hong kong. Panasonic has slashed its profit forecast because of falling profitability. Its expecting an operating profit of 2. 3 billion, 12 lower than analysts were expecting. Panasonic is struggling with a stronger yen. Manus honda raised its fully profitable the band of suvs in china. Net income is nearly 4 billion, 6 above the previous outlook. Over 7 . Upgraded the company says it is open to possible joint ventures. Angie we are watching shares of japanese airlines. Its targets by 15 because of Lower International demand. Jal maintains its yearly target. Shares of both Companies Looking like this right now. The bank of japan says it will not hit its 2 inflation target. We already knew they blew past the twoyear mark. What was significant here . The inflation forecast for 2017 and beyond that as well it seemed to push back the timing of when it will achieve its target. Ohe full forecast for 2017 t 1. 7 . It pushed back the projected timing. 2 inl increase towards the second half of the projection period. The language is quite cautious. It may not even happen in that period. That was the second half of a period in 2019. Theterm of the ehad ohead of boj will end in 2018. Been leading, has you can see how inflation has been doing. Cpi pushing higher but it is coming back. The inflation target is someone weaker than the previous outlook. He said getting to 2 inflation could take some more time. Manus thank you very much. Rosalind with the very latest on the bank of japan. Lets bring in tarek, ceo of Nomura Asset Management for the middle east. If you take six weeks ago, there was this level of expectation going into september. Kuroda is not focused on expanding the monetary base. How could they control this yield . Tarek one of the issues the boj has, they really have put themselves into the corner because they have gone into negative Interest Rate territory. That has not really worked. It has created problems for the financial sector. On the other side, the purchasing program, it has become so huge that it is distorting the markets. Going any further at this stage does not seem reasonable. Angie is credibility at risk for kuroda and shinzo abe . Tarek i think so. Angie is credibilityi think moe he launched this program sometime ago and the third arrow has not delivered yet. I think the bank of japan is certainly one tool. There are lots of other tools that abe should have utilized by now. I think Foreign Investors have become somewhat disillusioned by that. You see that from the selling we have seen in the markets in the last year or so. Manus talk about the global bond perspective. I was looking at the global aggregate. It rose despite being smacked in october. It raises a moderate form of equity. Do you really think that is global . Can bonds deliver like it did this year into next year . Tarek i dont think so because inflation is picking up. Lets look at the u. S. Data for example. You have unemployment coming down, Health Care Costs going up dramatically next year. You also have oil which is almost double where it was at the beginning of this year. So, come december and january, the numbers will show an excess of the fed targets of 2 . Under those circumstances, it is difficult to see how the fed can avoid raising Interest Rates. Manus tarek, ceo of Nomura Asset Management joining us right here. Goldman sachs sees oil. You have to stay with angie it is 12 30 p. M. In hong kong, 3 30 p. M. In sydney. The bank of japan sees inflation slowing in the coming fiscal 1. 7 , but itfrom targett its monetary unchanged. Asset purchase programs. Analystsmajority of say they have expected no change after the boj reset its Monetary Program in december. The stabilization of chinas old economy appears to be taking hold. It might lead to a twoyear high. Estimates nomists with it rising for the First Time Since 2012. The central bank may hold off further measures after keeping the key rate at a record low for more than a year. Saudi arabia has replaced the man in charge of the finance ministry over the past three decades. A royal order stripped him of his post and he was replaced. Was appointed as state minister and will remain a member of the cabinet. It is the latest move to reinvent an economy that has an battered by low crude prices. Barclays cut 25 of its London Office space, highlighting the risk of weak demand of developments currently under destruction construction. Developers started work on a Record Number of central London Office projects in the first half. Ubs says oversupply is a bigger threat than brexit. Global news 24 hours a day powered by more than 2600 journalists and analysts. This is bloomberg. Angie the Australian Dollar climbed on the decision by the reserve bank of australia to keep cash rate on hold with a record low 1. 5 . Lets go to paul allen in sydney right now. What reasons do the rba give . Inflation is very much top of mind at the moment. Been proceeded by week inflation. Last week, we had Third Quarter cpi which showed improvement to 1. 3 . It did not file in with what the governor has been saying recently. Inflation matters which are words which made to find them. The rba expects inflation to remain low for some time. There is some willingness of the reserve bank to tolerate inflation. In that respect, 22 of the 28 economists got it completely right. The reserve bank said holding the rate was consistent with Sustainable Growth and achieving that inflation title at the time. Angie . Manus i will pick it up from here. Aussieking at the dollar. What did they have to say about the currency . Paul well, there used to be a day when the currency would feature very loud and proud in rba statements. Those days have passed so the language has been different. The reserve bank saying the Lower Exchange rate has helped the sector but it could complicate the economy making adjustments. We have seen the aussie creeping up over the past few months. It did jump when the decision was released a while ago. Some comments on housing is one of the reasons for them not wanting to lower the Exchange Rate the cash rate any further. The statement saying considerable supply was coming on strength. They have strengthened standards. It was lower than it was a year ago. We will be hearing more from the rba this week when it releases its growth and inflation targets for 2017. We may get more clues on whether the easing cycle is over or not. Manus thank you very much. Oil is never far from our focus here. It is leveling out. Failedetwee