Replace the president s friend as she replaces the finance chief. Is 8 00 a. M. Across the emirates, 4 00 a. M. In london. In hong kong, just past noon. Welcome to labor markets middle east. Lets take a look at the state of play on the markets. We cant ignore what is happening in the u. S. , because thats whats driving the sentiment we are seeing across the board in asia. Trading for almost 20 minutes, down close to 1 . As you can see, despite the topicshaven of the yen, is also down more than 2 . It really is all about volatility as a result of the latest paul showing trump in the lead. Manus yeah. C onink if you go to ele your terminal, you can pick up the sentiment. This is very reminiscent of what happened in the 10 days before brexit. If we look at the bank of america volatility chart, youve mentor rumpall trumpometer, dollarpeso. This is in the five days. I took it back a little bit further. If we go back as far as june, you can see volatility is nowhere near where we were on brexit run ups. There is still a believe that markets are holding onto that clinton will succeed. But the volatility index is up for five straight days. That is the longest run of indexes since brexit. If the s p is right, it predicts tot properly what happens the rate hikes, killing all the way back to 1984. We will talk about this later on. As we go from the eighth of august, my birthday, from the eighth of august on, s p down 3. 6 . Correctly predict the outcome in the election and 86 of occasions since 1928. More to come on that story. Lets get you up to speed. It is two hours away from the middle east markets beginning their trading day. Bloomberge benchmark gcc q2 hundred index. You can see it is 5822. Barely unchanged. Abu dhabi, dubai, q atar. The qatari index up i want 20 . We will talk about cyborg later on. Some first word headlines. Shery ahn is with us today. Good morning. Reporter the south korean president has named a new Prime Minister and finance chief as she seeks to restore confidence over an influence peddling scandal. Her prosecutors want to arrest her, defenders of the allegation. He was an advisor to the former president. Chiefnancial Services Comes finance minister. Disappointing earnings in tokyo. Operating profit trailing estimates i about 75 . Sharp is expecting its first annual operating profit in two years. It has been boosting efforts to cut costs after taiwans false con gain control of the company in august. Shares have doubled since then. Charger may have more reason to sell its private equity business. The Division Posted a 30 billion loss in the Third Quarter and had negative revenue of nearly 200 million in the first nine months of this year. The ceo is said to be weighing a sale of the unit to its managers after writing down billions in loans and investments is the commodities crash. Dubai is hoping to develop the worlds biggest airport as government has hired hsbc to help raise money for the expansion. Dubai international will grow to serve 146 million passengers in nine years. The master plan is for capacity of about 220 million. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Shery ahn, thank you very much. The fed wraps up its two day meeting on wednesday evening. While most with the central bank would press the pause button again, it is expected to keep rate hike in for a december. But an economics professor at the university of Chicago School of business and a former Federal Reserve governor seems to think the fed should act sooner rather than later. Probability is quite high in december for rate hikes. My guess is as the data comes out over the next six or seven weeks, it is likely to suggest that the probability is even higher. I think they are largely ready, both in the u. S. And world wide. But what is driving the markets right now . For the latest, heres haidi lun. As you said earlier, asian markets have been relatively protected from the growing political anxiety in the u. S. We have seen not a lot of convictions in terms of strong positions being taken. We are less than a week away from that vote. We are seeing a lot of risk aversion across the board. Up by 2 . 225 these are session lows we are looking at. We have a stronger yen on the back of the steep selloff of the dollar overnight. We also have reaction to the bank of japan not adding to further stimulus yesterday, as well as the timeframe weighing on sentiment. With new zealand up, they are having really good jobless numbers coming through. The economy seems to be doing very well. Still, you can see how negative the sentiment is. By 1. 5 . Down that positive feedback we had from that allaround pmi beats coming in from china is one off. We are seeing the u. S. Headlines, trump taking the lead in some of these polls starting to weigh on sentiment in asia. Starts here, slumping to an 11 week low, the hang seng down by one and 3 10 of 1 . Ofis a Broad Spectrum sectors. Sinopec financial and is big losers. Take a look at what we are seeing in the currency spectrum. The dollar weakening overnight is playing out across asian currencies. , of course, they have their own political anxieties, the leadership replacing the Prime Minister, the finance minister replace as well, but President Park is still battling this influence scandal that has been developing. Close ton won down by 1 . You have the kiwi dollar looking like this as well. Jobs Numbers Family told on to much of those gains. Finally, if you are looking for some optimism, commodities continue to build on the back of potentially [indiscernible] those Economic Indicators doing very well. Of course, it is these safe havens. Silver looking like gold, up by another quarter of 1 . Manus. Fors thank you very much running up those markets for us. There is a pretty big story down in this part of the world, the commercial bank of qatar has a 411 million rights issue. Bank the first of many issues to calm . Joining us on the line is the senior director of Asset Management at al rayon investment. Thank you so much for joining us. In terms of this story, commercial bank going for rights issues, first of all, what does this say . Should we be more concerned about the Capital Buffers in the qatari banks . Anna good morning guest good morning, manus. Should we be more concerned about the Capital Buffers in those banks . Probably not. Are apart from commercial bank, which is clearly having to take action to increase its equity. The rest of the countrys banks are relatively wellcapitalized, so that should not be the worry. A number of them have been issuing Tier One Capital in terms of bonds or sukuk over the last couple of years. From a capitalization perspective, we are trying. Liquidity is clearly more stretched in qatar and in the gcc as a whole. Ofus as you say, that sort its that one to bed. I am wondering about the appetite this rights issue. I havesometimes when been here, we have talked about the nonperforming loan issue in a number of countries in the region. Give us an update on the health check, the nonperforming loans slide loan side of this equation. What i really want to know, do you expect the uptake in this rights issue to the full and plan to . And plenty . Guest commercial bank has a loss of one million rail because they took a 500 million rail provision. That took the nonperforming loans of a little more than 5 , and they were a little above 4 at the end of 2015. To put that in the context, the nonprofit loans were about 2 . This is very much a commercial bank issue. Yes, we need to be aware of what other banks are doing and look , but theeterioration commercial bank is clearly an outlier. Appetite for the rights issue, it is a 30 discount to the current share price. I guess some of that will depend on what happens in the next few days and weeks in terms of global risk as well as how well bank ceo layscial out his story and convinces Equity Investors to write him a check. Rishaad the is, right nowng we are seeing bond markets underperform as people think and feel a little bit better about the global markets. Commercial bank is certainly not the first to expand its core equity capital. Uae equity banks have done the same. But what are the risks . Good morning, angie. You are absolutely right. The islamic bank had a sukuk issue, and their rights issue it wasis year executed very well. The risk is that the rights issue does not get done. The risk is that investors dont have the confidence in commercial banks that many would like them to have. I would be surprised, to be honest, if that was to happen. It is a risk, but it is an outside chance rather than something to really worry about. Is this a symptom of what we are seeing more broadly in the oil markets here, especially ahead of this opec meeting, whether or not we will even get a deal . So you mean it is commercial bank to do with the oil markets . Well, really, the issues we are seeing, the need for capitalization, the need to aek liquidity, is it really symptom of just the general feeling of whether or not the oil markets can support a growing economy . You are absolutely right. We have had almost two years of falling oil prices. That sucked a significant amount of liquidity. That liquidity resides largely within the banking sector. Across the region, banks have suffered has oil rises have fallen as government deposits have dropped, and even private deposits have come under pressure. Commercial bank is obviously struggling with that, but i think the other issue is also to do with risk management. Rme of the banks have come two years into this and doing very well. Andrs, the music stopped they are paying the consequences for not for being perhaps either more cavalier when times are better, or not really being conservative as they should have been in terms of the provisioning. Angie its like that old childrens fable, the aesop fable, they still need to get a lesson from that. Thank you so much for that. Show, we wille talk to a company that helped build some of singapores most the ceo joinsks, us in 20 minutes. Coming up next, a slippery slide for crude. We will take a look if it can reverses losses without a doubt the national securities. This is bloomberg. Manus welcome back. You are watching bloomberg. Oil is extending its losses, trading at its lowest level in a month. Lets get to our Energy Market editor, aaron clark. Thanks for joining us. Again, another leg lower, and this all comes down to exemption after exemption of stockpiles. What is driving the move back to the onemonth lows . Reporter those are a couple of the factors. Right around 46 a barrel today. Over the last three sessions, it has fallen about 6. 1 . Like you said, the main trigger for that was on friday. Opec members met and they failed to come to an agreement on output. They met in september and came to a framework, a basic agreement that they wanted to limit output, potentially even cut output, but the devil is in the details. How much will everyone produce . How much will everyone cut . They failed to come to an agreement about who was going to cut how much and by win on friday. I think that injected an amount of uncertainty in the market, and thats why we are in this bearish trend down the last few days. What about the global glut . Is there still overhang of stockpiles . Reporter i think that is the other factor. The American Petroleum institute says that last week u. S. Inventories rose to about 9 Million Barrels a day. That is a bearish number, a big game. Bloomberg has estimates forecasting that u. S. Inventories rose by about 2 Million Barrels last week. Total u. S. Oil inventories are right around 467 Million Barrels. That is still about 30 above the fiveyear average. There is still quite a bit of an overhang. There is a glut you have to eat through before you get more of a supplydemand balance. That is definitely affecting prices, and thats why you are seeing this downward trend. Manus the question is, will that trend continue . Arron, thank you so much. Aaron clark joining us on the latest on the oil markets. And we have the managing director of National Bank of abu dhabi securities. There is only one story. Whether you think that saudi is going to produce a role in hold crude above 50 bucks, what is the betting in your shop . I am hearing what has been said. Im not sure that what is happening with oil process is related to opec. I think the markets are in the extreme because of in the bond markets, there is a selloff. What comes to mind is, if they reach an agreement five days ago, when oil prices have gone up . I think my answer would have been no, because i think there is a risk attitude with many and that isw, coming out. Technically i think we are still trading in the range. And 45, be the 2046 back to the 51 or 52. I dont think the fundamentals have changed in the last five days, and i think the talk will drag for maybe a few more weeks. Manus another few weeks. They will behat happy with 50 . Guest if this continues, i think they are budgeting for that, and they have put down their expenditure up for the past year, and that could continue. It will be tough times for a year or two, but i think yes that, they can. The issue is not just saudi. The issue is saudis said, we are not going to cut production until everybody does for us. If they back down on that, it will be a very negative statement. I think everybody has to be on board before they come in and they do an agreement. Manus that is the obvious message. You stay with us. Weve got much more to discuss. The polls are moving. What happens . We are moments away from the u. S. Election. And the Federal Reserve. All that to discuss. This is bloomberg. Angie breaking News Headlines coming across the terminal, that valiant pharmaceuticals is in talks to sell its gastrointestinal drugs business to japans cicada pharmaceutical. They are responding, saying it is not the support on valeant. That at anyying time they are in talks with many parties, they are not focusing on valeant, but they are saying that will make a full disclosure with any agreement is reached. Those comments coming from takeda, just crossing right now. Angie, thanks. Weve still got our guest in dubai, managing director of the National Bank of abu dhabi. There are two big issues that weve got to talk about. One is the Federal Reserve this evening. There has never been so much dissent. 7. 7 of the time if the fed has dissented. Yellen faces more dissent and greenspan or bernanke. Growth going into 2017 . Guest everybody is expecting the announcement or statement that may come up today, to prepare markets for that. I think there are also some indications of the 2017. , i thinkcrease is slow it will grow. I dont think you will hear that at me statement now, especially with the things coming with the elections. General, i think that in general is not positive for the dollar. It is not positive for the kind of stability we have seen in the market in the past few months. It is certainly not status quo. That is one of the key issues in the election, something says ormp, as an outside cat it outside candidate, that he represents. I want to pull up the fix index. Vix index. Anxiety is ramping up. We have seen a decline to the highest seeing it climb to the highest since june. What does it mean to outside investors, especially in the middle east . An increase in volatility will mean an increase in volatility on the short term, especially if it spikes at the rate is going up. It really shows that people are being anxious. I think there is a lot of liquidity that is outside, whether it was outside now are outside for a while. We see gold going up. I think overall, people are just staying on the outside, and that means it could be good and bad, depending on the outcome of the results. If you get a clinton kind of win, we may see relief early that could come back in. Interesting. K its the markets look at 3 upside on clinton and a 20 drop on a trump victory. Same kind of status quo for you . Guest i think so. That is kind of the feeling we have at the moment, although the initial reaction may not be the longterm reaction. We think initially, if clinton wins, there will be a surge in the market. So much for you joining us, giving us your perspective on the markets. The managing director from National Bank of abu dhabi. Dhabisp, again, abu new development is looking towards asia for a Big Technology investment. Futures on the market. We are looking at a softer opening across the u. S. Equities. Seeing is believing, and thats why were opening more Xfinity Stores closer to you. Visit us today and learn how to get the most out of all your services, like xfinity x1. Well put the power in your hands, so you can see how x1 is changing the way you experience tv with features like voice remote, making it easier and more fun than ever. Theres more in store than you imagine. Visit an xfinity store today and see for yourself. Xfinity, the future of awesome. Speed always wins. Especially in my business. With slow internet from the phone company, you cant keep up. Youre stuck, watching spinning wheels and progress bars until someone else scoops your story. Switch to comcast business. With highspeed internet up to 10 gigabits per second. You wouldnt pick a slow race car. Then why settle for slow internet . Comcast business. Built for speed. Built for business. Shery oil is extending its declines from its lowest close it over a month. U. S. Crude stockpiles have expanded, further extending an inventory glut. Supplies rose by 9. 3 Million Barrels last week. In the meantime, opec members libya and nigeria are boosting output, despite the groups efforts to stabilize prices. Kongsshes in hong legislative council. This mornings session was halted after they tried to retake a note and security guards tried to drag them out. Hong kong chief executive see why moan has now stepped forward to vacate their seats. Is scheduled for thursday. Auto sales in the u. S. Could be plenty telling. They were down 4. 4 last month from the previous october, which did have to bang extra field days. Chryslera, and fiat are also a decline. A