Calling the president a Big Personality with a big job. It is a 00 a. M. Across the emirates. Welcome to Bloomberg Markets middle east. I am yousef gamal eldin in dubai. Shery i am shery ahn in hong kong. It has just gone midday. Markets gaining ground, south korea leading the pack, take a function. R gmm japans nikkei up. 7 because of this slide in the yen, down. 5 , also the boj buying etfs and the past three sessions. Surging 3. 5 , rising three consecutive sessions, the highest level since may 2014. It is all to do with what investors are thinking of right the and it seems to be political environment europe a key focus here. Yousef it is definitely a key focus and point of our discussions. We look for the latest development in terms of the french president ial election, greece. This is the chart you should pull up, the latest recommendation coming from one of the biggest banks in terms of how you can hedge against the political risks out of france. Follow it up on your bloomberg. They are suggesting you go straight into the dax, going back to 2011, your money would have been better off there. You can keep your exposure to the reflation trade, but lets do some of these numbers on hsbc. Shery right, the latest headlines out of hsbc, fourthquarter results. The full year 2016 pretax profit was 7. 1 billion dollars. Alsois above estimates, hsbc fullyear adjusted pretax of 19. 3 billion. The stock and hsbc has soared more than 50 since the brexit vote, helped by a slumping pound. Right now the pretax profit at 19. 3 billion. Offer little bit on the buyback program. Yousef yeah, a couple of things to note. The adequacy was going to be key , Bloomberg Intelligence pointing out that the policies of donald trump are likely to factor into the equation as well. It is exposed to their rising rates, revenue linked to mexico of thena, so policies u. S. Administration. Hsbc they are instigating a further 1 billion buyback program. This is critical because we had , a threethat from ubs billion dollars by back, so less than what ubs would have expected, so lets cross over to hsbcs headquarters. Results coming through come in yes, everyone closely watching for example this announcement about Share Buybacks come up one of the contributors to driving hsbc asres much higher last year well as the slumping pound. They are also looking at other factors. The fact that Bloomberg Intelligence has pointed out, can hsbc keep revenues greater than costs . Saw an improvement across performance when it announced results in november, and those drove shares higher on that day. When you look at the details that will come out in the coming minutes regarding the results for the full year and Fourth Quarter from hsbc. One other factor is the contribution of facia. Asia contributes more 40 of revenues there. We saw asian growth have been slowing, and had been one of the clouds on the horizon for hsbc. How are things going to go this time around with a shot looking like it has picked up. Thank you. Later, we speak exclusively to 6 00 a. M. London time, 2 00 p. M. Hong kong, 10 00 p. M. In the emirates. Also of the till heads up for clients, continued coverage of hsbc earnings, you. An go to tliv this is rolling coverage, minute by minute interactions responses and perspectives on the numbers, even charts. So if you want to keep up to date and abreast pullup tliv. Lets check first word headlines. President trump has picked a new National Security adviser after Michael Flynn resigned from lying about his ties with russia. Lieutenantelected general hr mcmaster for the post. The president met several hisntial candidates after initial choice rejected the job. Defense secretary james mattis says the u. S. Is not an iraq to seize oil despite trump threats to do so. Iraqs Prime Minister and military leaders in baghdad under the shadow of the president s oil comments and the failed travel ban, which included iragi citizens. He said u. S. Forces would be there for some time fighting socalled Islamic State alongside iraqs army. The resilience of this army. Ecognized it took casualties it has reconstituted itself, both equipment and personnel wise, and as you know has crossed the line of departure going against the enemy and west mosul. This was something that was not a foregone conclusion for an army many were questioning. Area finance ministers dashed in the hopes greece may have had. Creditors are demanding pension and labor reforms need to occur before they sign off on an agreement, but having previously said these would be the last talks before european elections, the eu agreed to pick up discussions in the coming days. We have to realize that there is no agreement, no political agreement, at this point. It would be to early. It is a positive and good step that the institutions have enough confidence and common agreement to go back into effort. Dotcom has claimed a major victory after he was ruled not guilty of copyright infringement. The court did find he was eligible for removal to the u. S. On grounds of conspiracy to defraud. The u. S. Is seeking to extradite him. He says he will appeal the ruling. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Yousef saudi arabia boosted exports and production to the highest Monthly Average on record. Russia managed to overtake the kingdom for the title of the Worlds Largest crude producer. What does this tell us about the balance in the oil markets . They did swap positions backandforth. Good morning. Yes, it is closed between russia and saudi arabia, not a huge amount of difference. The most important thing in terms of market balance is the fact that saudi arabia is cutting from a record high. We expected they were, but it is worth remembering that even though saudi arabia has major medic cuts, production is still quite high. Russia as well a record high before it made its own cuts, so there is still a lot of oil in the market despite cuts, and that is why it will be interesting to see if they can take enough oil of the market. Shery at least for now, we do have that deal to cut production, so will it be extended for a full year . That is a good question, because they will discuss that very question in june. Will they continue further . Well, to do that, there needs to and lot of will to do so override the seasonality that benefits them. Saudi arabia cut production when reduction would normally dip anyway when domestic demand is lower. If it is going to extend, it has to make cuts when demand is highest, which eats into exports. Furthermore, a lot of u. S. Shale oil, so opec would look at those numbers and say, is it worth of these higher prices for our own reduced exports and an increase in u. S. Oil on the market . Shery thank you so much for joining us. Of course we do have an exclusive interview with the total ceo tomorrow here on bloomberg, so dont miss that. Hsbc asst lines out of well, fourthquarter pretax loss. Ame in at 3. 45 billion the company has also maintained the dividend at . 51 for ordinary share, and total dividend for 2016 at 10. 1 billion. Dividends were something investors were looking closely at. Saw a sharee shal buyback that lifted the stock. The bank is guiding for maintaining current levels of dividends. We do have more on the buyback, the board has determined to return to shareholders a further 1 billion by way of a Share Buyback, which is expected to be completed in the first half of next year. Right, later in the show, we speak to the middle east and africa head of airbus on doing business with iran as tensions rise with the u. S. Price will never reach 100 dollars again, that is rding to the founder of we were asking why. That is next. This is bloomberg. Yousef welcome back to Bloomberg Markets middle east live on bloomberg tv and radio. I am yousef gamal eldin in dubai. Shery i am shery ahn in hong kong. Lets get the latest from the markets. By theies pressured dollar index gaining above 101. The market still look positive, risk on sentiment across the board. Juliette saly has the details on the markets. It. Ette you said risk on in deed ahead of the free open of u. S. Markets today. Most asian equity markets stronger, but the focus is once again in china, a very strong rally from chinese banks, and also from automakers today. The chinese stocks listed in hong kong continuing on that strong rally, the hiv and share indexes now at november 2015 ,ighs, up 12 so far this year so a lot of that optimism about chinas Economic Data flowing through into the equity market. Bill international in hong kong, up by a 9 after Credit Suisse gave it an upgrade to outperform. Some weakness, the aussie market down by a third of 1 , bhp billiton after the bell with earnings results. We have seen a big Stock Options trade in the early session in sydney today. If you look at the nikkei, trading higher, the yen retreating, up by. 7 . Has been a couple of calls about the yen today, the imf saying it will weekend to around 120 before rallying. Bloomberg daybreak asia radio saying we could see the yen go to 125, but down. 5 at the moment. Thanks. Has slipped to second place in the global ranking of oil producers. My next guest says change in oil markets is structural, not cyclical, and 100 a barrel will not be seen again. Oining me now is fouad attar congratulations on the new business. Lets kick off with crude oil, the lubricant of much of the economic activity. In terms of where you stand on oil prices, you say 100 long gone, will not happen. What is your call on oil prices . This push and pull war between opec and nonopec and shale producers . The general consensus is around the 40 to 60 mark, but structural change is about technology. The cost is always falling, and it is a losing game to bet against it. With u. S. Shale having had a , they haveamp emerged stronger, leaner, and fitter. I think that is something you will always see going forward, and when you have other highcost producers coming back online, canada, brazil, untapped capacity in libya, iran, the longerterm trend is more of a soft cap at the safety level, barring any severe escalation or political risks that could drive things up. Yousef i pulled up this chart here, a great overview of liquidity conditions. And youraudi arabia emirates interbank rate in white. Saudi arabia has stabilized with the rebound in oil prices. R is still relatively high. Its not just the rebound in oil prices. Qatar, abu dhabi, saudi arabia had those jumbo debt issuance is. So you had pressure building up, helped put cash back in the system, so enzi easing of the pressure, but the deficits are here to stay. For stronger companies, less than 5 in the coming year, but for saudi, the deficit expected at 10 , some of the situation still quite tight, but ultimately bond issuances will become a regular part of the funding situation for sovereigns in the region. Of the storm eye is the banking industry, how much will better margins from potentially higher rates help banks offset the challenges, including provisions, the quiddity, and so on . All banks everywhere are looking at higher rates, so that is a beneficial factor on that ist side, but balanced by increases in the funding costs on the liabilities side, so you would expect corporates expect more on their deposits, expect higher funding costs, so netnet, the higher rates will not have that much of an impact. With regard to profitability, you are seeing an incremental rise in problem loans come of it nonetheless, banks here are quite more capitalized and quite well positioned to buffer some of the asset quality weaknesses expected in a slowing economy. Shery you release this key report arguing why it is important in this time of more protectionist trends comes explain that to us. Sure, the paper i wrote was looking at the events of trump and brexit and looking at them in a context of income and wealth inequality, and islamic finance, you can substitute the capitalism,ve profit and asset sharing, and so it really talks about an equitybased type of investment structure rather than debtbased bahrain, and that supports more Inclusive Capitalism and wealth distribution. Shery right, the key issues with the brexit vote as well as the election of donald trump, khalid howladar, thank you for joining us, managing director and founder of acreditus. Coming up, what australias Prime Minister said about his relationship with President Trump. That exclusive interview with Malcolm Turnbull is up next. This is bloomberg. Yousef welcome back. Youre watching bloomberg. I am yousef gamal eldin in dubai. Shery i am shery ahn in hong kong. Malcolm turnbull says he has had several frank exchanges with President Trump, but the details are not meant for the public domain. In an exclusive interview with daybreak australia, he described the american president as having a Big Personality with a very big job. We have had several conversations now, and they have been constructive, frank, and forthright. Deep engagement with the american administration, and every american administration. Australianu. S. Alliance, relationship, is deep. Ofis held over a century fighting sidebyside in every major conflict. It is an alliance. It is an economic heart ownership. And it is built on millions of people links and family links come in so it is very strong and deep. What you think of the man though . He is a very Big Personality and has a very big job. In terms of the added difficulty of decisionmaking, he is someone who does diplomacy by social media, twitter. There is an element of the unexpected. Is that change the way you deal with the u. S. . Know, we pursue our National Interests methodically, calm lake, consistently. We make our case, very frankly and forthrightly when we are speaking to our american friends, but like as you would expect, with good friends, we are fairly circumspect about what we say in public, so it is important we have frank exchanges with our american counterparts, but we dont lecture them through the media. It is very important i think to be able to talk frankly as good friends should. In the markets, we have been trying to work out what is trump the president versus trump the candidate, and a lot of that has come to fruition in terms of pulling out of the tpp and immigration. Do you think he means what he says . That is a judgment you have to make. , people always assume president s and Prime Ministers mean what they say, naturally, but in terms of a sort of commentary on u. S. Politics, i will leave that to the collective talent that bloomberg. It is not my job to comment on u. S. Political developments. Latest business flash headlines. China, sources say the country may ease Foreign Ownership limits on life insurance. Government may raise the longstanding 50 ceiling on an overseas insurers stake in their local joint venture. Cic beright, chinas says the countrys big three ,irline still have room to gain even with stocks at their most expensive and more than 18 months. The brokerage says they should get a bump up in business. They are the biggest gainers this year and bloombergs asiapacific airlines index, but still trailed the Global Industry average. The latest bets on the demise of the internal Combustion Engine are building. Toyota Building Seven new fueling stations. They are trying to a dress the lack of refueling for hydrogen and targeting 100 by 2024. Hsbc has been in focusing the company has had a good year with a further 1 billion buyback. Some additional lines, lets get you up to speed. By bloombergt intelligence, before the earnings announcement, the Succession Process is still on track. Hsbc also saying it took a 3. 2 billion goodwill impairment in british pounds in europe, and again saying the buyback is to be completed in the first half of 2017. We are still getting our head d these numbers, tliv is the destination for minute by minute coverage, and we widen out the brexit conversation as the business looks to restructure for the road ahead. This is bloomberg. These are the first word headlines from around the world. The u. K. House of lords debates the bill that would allow Prime Minister theresa may to trigger britains to parts are from the european union. Some members of the unelected changesuse are seeking opposition lawmakers failed to secure and the house of commons. So far, 30 amendments have been proposed, and the lack of a majority and lords means she is more likely to lose their. Polls to just Marine Le Pen is gaining ahead of the first round vote on april 23. The survey has the National Front leader at 27 . N wouldl found macro defeat the pen and a runoff. Between french tenyear bonds and german equivalents white into the most in more than a year. A plane with five people on board has crashed into a Shopping Mall in the austrian city of melbourne. Police have confirmed everyone on board or killed. Camesses say the plane down and exploded after taking off from the nearby airport around 9 00 a. M. Local time. It is the worst Civil Aviation accident for 30 years in the state. Ambassador to the u. N. Has died suddenly while at work at age 64. He had then moscows envoy to the u. S. Since 2006. President putin paid tribute, and Samantha Power called him a diplomatic maestro. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Yousef thanks. Hsbc has announced a fourthquarter pretax loss of and a full your preadjusted of 19. 3 billion. It announced it is instigating a one billion dollars buyback program, lower than what ubs had forecast. This in amore on second, but let me show you this chart, how analysts feel about the stock before the ratings announcement. The top panel is the average