Will that continue . Yousef it is 8 00 a. M. Across the emirates. I am yousef gamal eldin. I am shery ahn in hong kong. It seems to be that seeking safety is a theme for the week, bonds rallying, investors , soing safety, chasing debt caution seems to be the theme, but not necessarily the theme for the last couple of weeks. Yousef i tell you what, we have heard whispers about trump trade unwinding, and yes some Asset Classes reflect that, but if you look at the bigger picture. Story, riskells the on, risk off, one of my favorite functions on the bloomberg. As you can see, we are firmly risk on. Greatof volatility, a index, a global metric. This looks at everything from currencies to volatility to solver and yields, so an accurate reflection of risk sentiment. At the moment, on the upbeat and setting up the broader story that the trump trade is in tact, at least as we speak. Sentiment. Lets tell you how the middle east markets closed. , ani and abu dhabi interesting picture as earnings trickle in. , downside indubai abu dhabi. Saudi arabia up. 3 , a therkable recovery after sales giant found itself under pressure. Threeextending losses, a. 7 slump, down. 7 there. Monitoring the turkish lira after the parliament votes ,ver the weekend, reaffirming confirmed the power of president erdogan. Down. 3 against the greenback. Shery right. Pictureeeing some mixed are crossed in asia, japan losing ground on a stronger yen, but other markets seeing some resilience, so lets get the details rom Juliette Saly from Juliette Saly. We are probably likely to see some mixed movement as we await more stimulus plans from president trump. He says markets are waiting for trumpvidence that donald will deliver on fiscal stimulus and deregulation, so markets in a holding pattern. For itsn come on track best close since june 2015, the stronger yen weighing on the nikkei, down by over 1 , but upside in china, the shanghai composite up. 3 , flat on the hang seng, australia weaker by. 8 . Some of the big Market Movers in the region today, toshiba rising almost 9 on a report that its chip business is drawing interest. , but risinglat after a consortium move to buy part of ping an. Look at this big fall in 17 , the ceon saying he is embarrassed over the profit downgrade as he leads the company after seven years at the home. The japanese yen of course stronger today, 113. 63. So much. Ank you Samsung Electronics has confirmed faulty batteries cause of some of its galaxy note 7 models to burst into flames. Rosalind chin as following this for a spirit samsung is blaming it on an affiliate. Rosalind thats right. The batteries were long suspected to be the issue with these note 7 phones, overheating and catching on fire. There has been a lengthy investigation, samsung saying irregular size batteries caused overheating and fires. Were made by a samsung affiliate, samsung sdi. Electrodes in those batteries came into contact with one another. They found defects in design and manufacturing phases. Providedsays we have the target for the battery specifications for the note 7, and we are taking responsibility for our failure to alter me identify and verify the issues. They have taken several corrective measures to make sure this never happens again. Insung had invested a lot finding out what happened to these batteries. Did their own investigations in addition to several agencies, and these are the results. The financialbout cost of the note 7 fiasco p at how much will this impacted the Balance Sheet . Rosalind samsung has not given us details on that right now. Estimates have come in saying million,upwards of 6 because the product was recalled. They also had to pull the note 7 line completely. Samsung itself has not done too badly. The Company Actually posted strong results, the earning side showing the biggest operating profit in three years at 7. 8 billion. That the estimates, and we will get more details on how the division is doing tomorrow when samsung posts fourthquarter results. Yousef all right, lets check in on first word headlines. President trumps pick for secretary of state looking certain to be confirmed as key republican critics drop opposition. Lindsey john mccain and graham say they will vote for Rex Tillerson despite concerns about his relationship with russia, sang the new president deserves the benefit of the doubt. Arabias Energy Minister saying opec and other producers have cut supply by 1. 5 Million Barrels a day since the first of january, more than 80 of their collective target under last years deal to stabilize prices. Best agreements producers have ever had. A meeting in vns agreed on monitoring to ensure 100 compliance. Saudi basic industries lying out shells share and a petrochemical business, shells third exit in as many years. Shell has been reviewing its rolein in the region. To end the fighting in syria begins monday with russia, turkey, and iran holding talks in kazakhstan. The knighted states been mostly out of the loop. The u. S. Ambassador will attend the talks, but it is unclear if the groups will meet. Covered, 2600rld journalists and 100 20 countries. Youre watching bloomberg. Thank you. Donald trumps trade talk got talker in tougher in his inaugural address. He sits down with theresa may this week to discuss they postbrexit deal. Kathleen hays in hong kong with us. Great to have you here. President trump, still sounds really weird, what did he say exactly that field this antitrade fear . Its great to be watching all of this from afar. It isnt specifically what trump said. Its the fact that when you heard him on the campaign trail talk about trade and representing u. S. Workers, it seemed Like Campaign talk. Now he seems pretty serious. Lets listen to just one part of his inaugural address that seems to demonstrate this. Every decision on trade, on taxes, on immigration, on will be made to benefit of workers and american families. We must protect our borders from the ravages of other countries making our products, stating our companies, and destroying our jobs. Website,he white house which now represents donald trump, right . He is the president. He is vowing to withdraw from , renegotiate nafta if he cant get a fair deal for workers, then he will withdraw. What youre going to see is the nafta impact, raising the question of nafta impact on workers. You see nafta starting, then china enter the wto. Meanwhile, the blue line represents imports from mexico , exports and imports have risen steadily between the two countries, so maybe nafta was not so bad entirely for the u. S. , but what has fallen definitively is the number of u. S. Manufacturing workers and chinashe question of currency strategy, how much it impacted it. Nevertheless, what is important for mexico is that 80 of their exports go to the u. S. Mexico asent of saying he will seek a respectful dialogue with donald trump guided by national interest. Mexico meeting donald trump on january 31. For now, we will sit down and continue this dialogue and maybe ak, letter hoping to keep things on track. Yousef theresa may talking about a potential trade deal with the u. K. How much traction is she making and what do we know . A white house a tells Bloomberg News that they intend to lay the groundwork for a postbrexit trade deal. Said publicly she wants to build on the special u. S. U. K. Relationship, not just trade, but national security. Trump Officials Say they believe their talks with may ahead of the brexit vote will hopefully be more aggressive and help her in her dealings with the eu. Australia is opening talks as well with the u. K. , and as theresa may says the u. K. Is open for business, it looks like shes following up. Yousef lets continue that conversation from this part of the world. Great to have you on the program. Is trump going to deliver on the promises for fiscal reform and cutting taxes . If you look at what we have seen so far, false fema head, isnt it . I think he will make Good Progress on the promises he has made. The difficulty is knowing which ones he will really follow through on, cutting taxes, the potential for u. S. Companies to repatriate cash, deregulation, all areas where we have Good Progress made. That, and beyond especially Foreign Policy and trade, it gets more difficult. I know the aggressive talk, but what we feel is more likely is a pragmatic outcome. Once you start engaging and trade restrictions, there is a big risk that you have retaliation. Yousef hold that thought. We will continue our conversation and egg into some of the earnings out of this part of the world and what that tells us about the economy, specifically the regions largest economy, the kingdom of saudi arabia. Yousef we will also talk more programer guests on the on the donald trump conversation, china, and the of the fact that western democracy could be flawed, one of the arguments being made. This is bloomberg. Yousef welcome back to Bloomberg Markets middle east live on bloomberg tv and radio. I am yousef gamal eldin. I am shery ahn in hong kong. Strongly thaness 2016, the market looking for oil between 55 and 60. Lets see how the Government Strategy is hang out. Head of middle east research for credit suisse, thank you for sticking around. Just got theire fiscal budget, but saudi arabia to haverically known difficulty when it comes to actual spending. The government has consistently overspent every year between 20002015. They have missed by an average of 24 . Becausee only exception of low oil prices, but given the rebound in the price of oil, there we go, do think we will see another time when saudi arabia goes back to old habits and puts reform on the back corner back burner . There is some level of spending to come back. Last year was the first year on record when we saw that level of overspending disappear. It is reflective of the fact the government has a renewed focus on keeping expenditure under control, but with revenue picking up, the scope for that but ing to increase, would doubt it goes back to that 24 average. Have had earnings from different sectors and saudi arabia, and this is the first opportunity for all abuzz to be able to gauge the health of saudi corporates after austerity measures have begun taking effect. What is your call as to well those saudi corporates are at the moment . A lot of them missed expectations. I think you are seeing the impact of that austerity come into force, discretionary , saudig under pressure banks reporting higher aovisions, though that is not huge surprise because traditionally q4 has been when tend to have their provision higher than expected anyway, so i would not say a huge surprise. Overall trend of earnings, q2 and q3, a solid quarter in terms of positive earnings surprise, and Earnings Growth has been under pressure, but you are starting to see Earnings Growth bottom out and improve, so from quarter to quarter you might see deviations, but the underlying trend, there is still a positive trend. We see nonoiln revenue and saudi arabia start supporting the economy . That is ultimately the big question, how much success can the saudi government push on a nonoilrowing revenue base . The push will come beyond 2018 vat is targeted to be introduced. The initial few years, it will be a slower buildup and nonoil revenues. Yousef this chart tells an interesting story, a big theme when oil prices were lower, the contracts ofrward dropped significantly in the last 34 months, now the lowest in 16 months. That is your line in white. The line in blue is rent crude. Brent crude. Thehe oil price is stock in 45 to 60 range, could there be Downside Pressure . The forwards, the stock market, the interbank rate . Definitely. We have seen rates come off of little bit due to the bond issue. The currency that was a cheap bet for the market to make, limited downside risks, but now the oil prices managing to sustain better than the market was anticipating, so those bets are fading away as well. It there. Will leave always a pleasure to have you on the show. Lets get you a preview of what is still to come, opec and friends agree on a way to make sure everybody sticks to the agreed output cuts. We will get you the full story behind the cartel and what they have planned, details next. This is bloomberg. Shery welcome back. Im shery ahn in hong kong. I am yousef gamalfsanjan eldin. Takata having a difficult day. They have lost 45 of their worth since monday. Shery foxconn chairman weighing an investment with apple in the display factory. Moreacility would cost than 7 billion and could create 50,000 jobs. At u. S. Protectionism is inevitable, American Consumers may not be willing to pay higher prices for products made at home. Utility companies in california seeking 1 billion to promote electric cars. Looking to boost spending on charging stations to meet the goal of zero emission cars on the road by 2025. It onrnia is pushing for cutting Greenhouse Gas omissions despite Donald Trumps promise to kill similar efforts of the federal level. Haveand other producers agreed on a way to monitor compliance with their historic output deal. Anthony, how does opec say it is doing on these compliance cuts . We hear whispers on most every day now. Good morning. They say they are doing well on the compliance, not 100 yet. The saudi Energy Minister says they help to reach 100 in february, everyone complying fully with their quota levels. They have cut 1. 5 million , and the day so far target is 1. 8. Saudi arabia, going beyond their commitment. The russians are working there and on the way there, looking to cut 300,000 barrels a day by april or may. That a lot of analysts and market watchers told me would be the laggards like iraq are on the way as well, so opec doing well and they say they deal that these reductions will have the impact on the market they were looking for. So how is opec monitoring this compliance . What are they looking at . The point of yesterdays meeting, to set up the mechanism about how they would communicate that to the market, so they are setting up a committee of several countries to look at exports, look at socalled secondary sources, look ate analysts that the market, count tankers, talk to sources, develop their own estimates for what countries are producing, and a look at those production estimates and make sure they are in line with cuts. They will look at exports as a way to backup that data, so thats what they will be looking at to monitor those cuts. They will meet and in march and may to look at compliance on the market. Much forank you so joining as per the latest from opec, brent prices holding above 55 a barrel, although some downward pressure. Coming up, on the rise, what is helping kuwaiti stocks. We will have the details. This is bloomberg. I am yousef gamal eldin. These of the first word headlines from around the world. President trump breaking a campaign promise, top advisers saying he has no intentions of releasing his tax returns. May ons with theresa friday to talk about a postbrexit deal. They have stepped up their war with the u. S. Media over the size of the inauguration audience. Samsung Electronics Says blame for its to flammable note 7 fiasco. Overheating and fires caused by separation film in the batteries. The companies apologized and promised to strengthen battery safety. Companys deepest business crisis and killed off its Flagship Smartphone and may have cost at 6 billion. The wall street journal says the sec has opened an investigation into data breaches that yahoo . Unidentified sources saying the inquiry will look at whether the company should have reported the hacker earlier. The report also said that yahoo thought the breach affected fewer than 500 million users eventually disclosed. Turkish lawmakers have given their verbal to president erdogans attempt to secure sweeping executive authority. Members voted to make the president had of the executive and abolish the job of Prime Minister. The move triggers a referendum that could be held in early april. The changes will concentrate dangerous power in a single authority, opponents say. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Shery kuwaiti stocks are on a worldbeating rally, the index rising for 13 straight days, up 15 since the start of the year. For more on the rally and how long it might go on for, lets go to Tracy Alloway in abu dhabi. What is driving these gains . Thats right. I dont know about you, but if someone asked me the bestperforming stock market index, i would not have thought about the kuwait stock index, and yet here we are. Have happen is this perfect confluence of factors events that have combined to create a positive environment for kuwaiti assets. One is the rising oil price, more generally the case for the gulf. On the other hand, if you look uaehat saudi arabia and the are doing, you could think away may begin to do a similar thing this year. You also have the kuwaiti investment authority, the sovereign wealth on promising to buy domestic equities. Pakistan, one of the bestperforming stock exchanges last year, boosting itself to emerging Market Status this year, and that leaves a hole in front tier markets that kuwait could fill, so a laundry list of things pushing up kuwaiti equities right now. Yousef im looking at some of these by you way should ands, and it is reminiscent of the moroccan stock market during the first two weeks of the year, seemingly collective euphoria, then people bailing when metrics get stretch. What you looking at, which one stand out . Tracy thats right. There is a saying that markets can stay rational for quite some time. If you look at the technical indicators around kuwait he stocks, there is another record the exchange holes, the exchange in the world with the highest percentage of overvalued stocks based on something called the relative strength indicator, Something Like 70 of the 182 stocks in the kuwait stock index are flashing that overbought symbol. On the other hand, volumes remain healthy. Quites in kuwait are strong when a lot of other gulf markets have been struggling to boost a