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00:00This is Bloomberg Daybreak Middle East. Your top stories this morning stocks see mixed trading on a softer dollar. But investors are still cautious over whether the sell off has room to run. President Biden arrives in Tokyo from Seoul in his first trip to the region as the US leader with a plan to counter Beijing's influence. Australia's new leader Anthony Albanese also heading to Japan for the club meeting after being sworn in as the country's 30 first prime minister. Saudi Arabia's sovereign wealth fund takes a one point five billion dollar stake in Prince Alwaleed ISE investment company sending shares on K 8 see soaring in Riyadh. It's just gone 8:00 am across the average warm welcome to this Monday edition of DAYBREAK Middle East Manus Cranny. Is it a bear market rally. Are we just desperate to find some buying signals. Yes. There is a bounce in the US equity markets this morning up by eight tenths of one percent. But seven weeks that wreaked havoc and delivered fear all across the wealth of the world. Larry Summers tells Bloomberg that the sell off that you've seen is a feature not a bug of the Fed policy. And you will hear more of that. The Fed's toleration for more aggressive sales on in equity is that the Amman life survey is let me show you what seven weeks of destruction really looks like. It's the longest losing streak since the dot com bust. Now we did briefly make it into a bear market. Then we bonds don't fight. The M Life survey says. A thousand responses. There's another 10 percent to go in this market before you trade the bottom 30 500 and just 4 percent see the bottom being formed here. So that is the implosion on the equity market 14 weeks of outflows. Yes the Covid cases in Beijing are rising. So where do you take your haven. It was supposed to be the dollar. But let me show you the bonds because again a fierce rally in the bond market. The sense of panic that prevailed on Thursday Wednesday and Friday at was very very prevalent. We've done the survey of the economists out there. They still say that bonds will end this year at three point and the third quarter at three point zero eight percent. But as you can see that was some hellishly bumpy days up by 10 basis points up by 15 basis points in the middle of the curve. And James Bullard says front loading is what's needed and then you could have rate cuts going into next year. I told you years was take cover in the dollar now. That was not the trade was down one and a half percent last week. The correlation to risk aversion is breaking. Dying. You're seeing that you differential with the rest of G7 also narrowing ever so slightly. I wouldn't say it's imploded but it has changed. The question you need to ask yourself is whether is the Fed done and is risk aversion enough to counter the Fed narrative in the bond market. That is the juxtaposition. Let's get to David Ingles. Asia is grappling with the news flow from Beijing on Covid cases versus the bear market bonds that you have in the rest of the world. David. Absolutely and that's in fact where you're seeing most of the weakness across markets on the mainland and here in Hong Kong which by the way just went into the lunch break here. To your earlier point man is this correlations in breaking down. Yes we are feeling we're feeling that dollar weakness it to varying degrees with the Kiwi dollar in fact reaching this downtrend. We'll see whether that lasts. As you can see here about nine tenths of one percent. The Asian session though to your other your other point here and there's this breaking down. Yes. You're getting dollar weakness. You're not getting the strength though that intuitively people thought you might be getting. In fact as you can see we're at session lows there on the Asian benchmark. To the other point I was making here as far as some other markets are concerned. So you are getting a lot of weakness coming through in these Chinese markets. Hong Kong were down about 1 2 percent depending on which metric you're looking at. By the way inflation numbers are coming through later today. I'll end on this. As far as a snapshot is concerned monkeypox. Some of these vaccine testing and health care related names are rallying hard along those themes Magnus. David thanks very much. Great roundup David Ingles. In Hong Kong the U.S. equity market as we've been showing you a incrementally positive start to the week following the longest losing streak since the dotcom bust. The former Treasury secretary Larry Summers says the market rate is just part of the solution. It's part of the Fed's efforts to address inflation the way monetary policy works is by raising the costs of capital and discouraging investment. The way it works is by reducing wealth which reduces spending. This is part of the process. This is a feature not a bug associated with the tightening of monetary policy that we've had. Well let's say Larry Summers take on the markets. The Emily Chang Pulse survey showing investors expecting more pain in the equity markets had. Mark Cranfield is with us. That's hurly burly is far from done. According to High Flyers and Bloomberg terminal users. Indeed. The Fed and China were the two most commonly cited reasons for why equity investors are still got a tough period coming ahead. The people in them live pulse survey. They wanted to see an end to Fed hiking as being a good reason for them to be more positive on equities. They also wanted to see an end to China's Covid zero policy as well. They were the top of the list. So neither of those look as though they much chance of them happening in the very near future. So what you're seeing in terms of a recovery in U.S. equities today is probably just a bit of a bounce within what still remains to be a bear trend. One of my favorite lines from the Bank of America survey Mark is if we look at U.S. GDP in the first quarter by twenty four point four trillion the global equity market collapsed from the peak in November is twenty three point four. So we've almost wiped out the size of America. Now this has. I suppose to a certain extent this is what the Fed want. They want a tightening an African. They want us to say want America to spend less and perhaps take some of the demand out of it. The question is how much more pain do you think the Fed is going to tolerate. Because if you listen to Esther George Bullard over the past five days that they're going to let more pain rip. Yeah well this is the difficult part for investors is that history tells us is that when central banks especially big ones like the Federal Reserve when they get aggressive on changing policy they usually go too far in the other direction. And that's partly why you're seeing the US dollar weaken over the past couple of weeks because at the moment the narrative is that the US dollar is being used as a tool to pricing the potential for the next recession in the United States probably even more so than other parts of the asset space. So at the moment the dollar is taking the brunt of that. And while investors fear that the Fed may overdo it and not only raise rates the reason for too long then the dollar is the one that's likely to take the pain. OK. Monk thank you very much. The M.A. strategy team lead that Mark Cranfield a bit of breaking news we brought you last week had knock on Borealis seeking to IPO that plastics joint venture. Today we have some pricing for you. It looks as if it's going to set a share price at two forty five dirhams. The implied it comes in pretty much at the at the valuation number that we had which was 20 billion for the overall company. So seven hundred seven point three five billion dirhams from the IPO of this joint venture. Three billion shares representing 10 percent of the equity is to be put out there in Abu Dhabi. And the subscriptions period starts May 2013 and it runs through May twenty eighth. So we keep an eye on that. In terms of the book building that's the latest read headline on the Brugge IPO. Oh on the bureau's plastics IPO. Now Australia has a new prime minister Anthony Albanese. He will be heading to Tokyo to the quad meeting just hours after being sworn in as president as prime minister. President Biden is already in Japan. Let's get the details with our chief North Asia correspondent Stephen Anger. It's a tough day one for the new prime minister. Straight on a plane straight into defense straight into the quad. Absolutely there's domestic frying pan. Now that is the international frying pan that is hopping from one hot plate to another. Obviously Albanese is going to be tested under fire of course for his international chops with the quad meeting tomorrow with Biden with Modi of India and Kishi of Japan. And you know Biden too might need some name tags on these people because he just came from South Korea where there's a new president there. Yoon Kishi to Japan is a fairly new prime minister. And now Albanese Modi is about the only rock steady one from India. But again Albanese is already getting a little bit of a soft tone from Beijing. We haven't gotten official diplomatic channels welcoming him into the world of world leaders. But he we have gotten comments from the Global Times the state media essentially putting a softer tone than what they've used against Scott Morrison's government which they don't like by the way is basically saying China's rise shouldn't be viewed by Australia as a threat. China will definitely be a good partner. Those are just a couple of lines coming from the strident Global Times towards the Albanese government a bit of an ongoing branch if you will. But Mr Albanese before he left for that Japan trip said because he's under pressure not to be too easy on China. He says the relationship with China will remain a difficult one day one day one as you say straight out of the domestic frying pan into the fire. Of course there is a fantastic piece over the weekend about Albanese's rise from you know his childhood to rise to the biggest and top job in the world. It's a great read. I encourage everybody to go have a read out it OK. Stephen will catch up with you a little bit later on through the show. To Saudi Arabia the sovereign wealth fund that they've put one point five billion dollars staking kingdom holding. This is the investment company controlled by the billionaire Prince Alwaleed bin Talal. Simone Foxman has the details. So Simona this is an interesting shift in the allocation of capital. What is the PPF get its hands on. And what does the prince give up. Well they get its hands on sixteen point nine percent of kingdom holding. Prince Alwaleed will retain a 78 percent stake in the company. So we know the numbers here but we don't fully understand the rationale. Is this part of the confer the confirmed understanding as it were between Prince Alwaleed and the Saudi government to secure his release from detention at part of the Ritz back in 2017 2018 when there was that massive anti-corruption probe. We don't know. Does this have anything to do with Kingdom's massive stake in Twitter. Remember just a couple of weeks ago Kingdom Holdings came out so they weren't going to support Elon Musk's takeover bid. And then suddenly about three weeks later they turned around and said they were all for it. Or could it have anything to do with bringing Prince Alwaleed and his firm back into the Saudi government. Fold mind UPI FS investments particularly in technology and hospitality. Those are things in some way that mirror what kingdom holding has in its portfolio. What is clear however is the last couple of years have not been kind to kingdom holding despite the run up in global equities. The firm took until 2021 mid 2021 to recover its value after Prince Alwaleed arrest. It was down 10 percent. Shares were down 10 percent this year before this investment partly because of that uncertainty about what that understanding between the government and Prince Alwaleed was. Also because of hospitality exposure do we see that momentum. The jump in shares that we saw yesterday continue with everyone back at their desks. That will be the question as we go into trading this morning minus. So we'll keep an eye on it. Lovely up some that Simone Foxman on the very latest deal for the P.F. Prince Alwaleed bin Talal first rate news. Vonnie Quinn is with the team in New York. Vonnie. Good morning. Thank you. Beijing has reported a record number of Covid cases during its current outbreak reviving concern authorities may impose a lockdown. Ninety nine new infections were announced for Sunday up from sixty one a day prior. And with the tally mostly hovering around 50 cases each 24 hour period. The Beijing government says the Covid situation quote is still severe and complicated and that the capital is in a critical time. President Biden has warned about the growing monkeypox outbreak. At least two cases were confirmed in the United States. The rare and potentially deadly cousin of a smallpox virus is traditionally confined to regions in Africa. But infections have been rising in Europe and North America. Biden says the spread of the virus could be consequential and his advisers are working on a response. New York City police are searching for a man who shot and killed a subway commuter in what they say appears to be an unprovoked attack. Witnesses have told media outlets the gunman fired one shot as the Q train pulled into Canal Street station striking the victim in the chest. He's been name as 48 year old Daniel and records Mayor Eric Adams made reducing violent crime a central plank of his election campaign. Infant formula will start arriving in U.S. stores as early as this week. A military plane has delivered more than 32 tons of it from Europe as part of an emergency program. Shortages due to supply chain snarls were worsened in February when the biggest manufacturer of lavatories issued a voluntary recall and closed account after four infants fell ill. Manchester City have since the sixth English Premier League title in 11 seasons giving Liverpool by a single point after a come from behind victory on the final day that he scored three goals and five minutes after trailing Aston Villa two nil at home. It's the first time the club has secured the title in front of their own fans who of course will field in their thousands at the final whistle. Be careful on that one. WS News 24 hours a day on air and on Bloomberg Quicktake powered by more than twenty seven hundred journalists and analysts in more than 120 countries. ISE. Vonnie Quinn. This is Bloomberg Commodities Edge funny. Good to see Vonnie Quinn in New York. Still ahead on the show the CEO of Siemens Energy joins the team somebody to talk about the plans to fully acquire the wind turbine make it got messed up. We have the details. Plus we discussed regional policy and strategy with Ross Muller investment banks Ali Tom Keene. But up next the Fed's hawkish at all costs posture has market watchers debating how much lower can stocks go. We get the insights from Forbes managing director Alan Marcus. He joins me next. This is Bloomberg. What is unavoidable is that selection. I would take actually the approach of Andrew Bailey at the Bank of England. I will be brutally honest. I'm afraid that grim swim against the apocalyptic branches and the Fed is finally catching up to developments on the ground. It's been very difficult for households obviously. Gas prices have been extremely high. Food prices are high. It was avoidable had the Fed not stuck to its transitory inflation characterisation. Things are so uncertain in the economy right now. It's very difficult to think about trying to give guidance out into the future. Inflation is coming down. That's what we really need to see as inflation comes down. Hopefully some of those prices will revert and they'll come down many opinions amidst the dipping into market. The Ali ISE chief economic adviser. Bloomberg opinion columnist. Mohamed El-Erian. And a constant critique of the Fed. Inflation expectations have eased the US in the US. But growth concerns linger. El-Erian says in stagflation is inevitable. So the chart that you looking at is the break evens across the US twos fives and tens. Let's bring in a lot. Marcus FSB managing director head of asset management. It was a tough tough week last week. Let's start there. We briefly dipped into a bear market. Do your clients believe it's the bottom. Because our EM Live blog. A thousand respondents say there's another 10 percent lower to come in the US equity market. Will that be resonant with your clients and the people you talk to. I think in line with the earnings growth or lack of earnings growth. I think the market's now corrected. And I think we're in this new normal phase where expectations are a little bit lower. Perhaps we see a relief rally going into the summer. But I think we're sort of staying in this kind of range for the S & P around the sort of three thousand three thousand one area. The chart that I just showed then I think tells a very important story that in the meltdown we've missed. Let's have a look at it again. These are the break evens and they have come back considerably since their peak in March on the very short end of the car from four point nine to three point nine. I've written down three peaks peak inflation pick Fed angst and peak market fear. Do you think in the first instance we have hit peak inflation. I think we're close to it. We're still in sort of 8 to 9 percent. It may drift a little bit lower as we get later into the year. But I think the market's now adjusting to a bigger slowdown than perhaps we'd forecast at the beginning of the year. At the same time we've had an extremely big bounce post Covid. It's only natural to see that that be rolled back a little bit. I think as you say it's going to take years to get back to 2 percent. The easy lifting is going to be the 8 to 5 percent seems to be really mad. You remain bullish on the dollar of course. I saw the dollar at the start of the show one of its worst week in six. You know you saw this heat come out of the dollar as we went into major risk off mode. And many would say that's just not supposed to happen. Why did it happen. And B is it a buying opportunity in the dollar. And if so against what IBD. How do you play it. Where do you step in. I mean there's a number of factors. The dollar remains and it's proven to be the world's reserve currency yet again in times of trouble. And we've seen defaults for example in Sri Lanka. The emerging markets I think are on the back foot quite seriously. You're going to get this continuous policy divergence even if the rate argument adjusts to a more dovish stance as we get into the second half of next year. But the dollar still remains the asset of choice while we've got this volatility. Even if the ECB goes into sort of what should I call it I you know a quasar more tightening mode. Let let let's just focus in there a little bit. Broad dollar you buy. But Eurodollar you think the days apparently calls are over. Well I think the market will want to test it. Obviously we had no rate hikes predicted at the beginning. And now Legarde wants to say one in July and maybe we're talking about three going into the full year. But at the same time you have to look at really the dynamics of where everything is. You're still going to get growth in the US albeit avoiding a narrow recession. The Eurozone and the U.K. certainly looks a lot more of a difficult place. Pollard's comments I think were quite important. He talks about the size and the scope of front loading. It wouldn't be like 75 50s or grand for him. He talks about front loading getting to three and a quarter of this year and then maybe rate cuts now in 2023. But he doesn't see a recession. Does that does that conjugation make sense to the true idea of a recession. Should be those very big negative numbers 2 3 4 5 percent. The IMF obviously reference the negative nought point one percent. The idea of snuffing out inflation as quickly as possible is to see those steep rate rises. And I don't think he's alluding. The fact that he's worried about socially problems at the same time you're beginning to see though that the economy has adjusted somewhat and you need to sort of really focus on where policy will be in the future. I think the 10 year Treasury curve is is reflecting that. OK well let's see how it plays out as you say at this dollar. This dollar debt might might prove an interesting buy an opportunity for you. OK thank you very much. Marcus FASB managing director head of asset management for the markets this morning setting the agenda on DAYBREAK. Middle East. This is bimbo. Let's get you up to speed with the business headlines this Monday morning. HSBC has reportedly suspended an executive after he dined played the risks of climate change. Stuart CAC is the head of responsible investing for the bank's asset management unit. He criticized HSBC for paying too much attention to climate and other environmental and social issues. HSBC CEO No. Quinn says CAC remarks are inconsistent with the bank's strategy and don't reflect the views of senior management. Didi shareholders are expected to vote in favour of delisting in New York during a special meeting on Monday. The decision will add eleven months of turmoil after its U.S. debut sparked a string of regulatory crackdowns by Beijing. Wiping 60 billion dollars off these Michael Barr de-listing would also clear the way for a possible share float in Hong Kong. IBEX is corporate jet division is more optimistic about the prospects for this year even as the war in Ukraine and China's lockdowns weigh on sales. The plane maker had a slow couple of years for orders of its newest business jet model with almost all work travel cartel. However sales now trended upwards with five corporate jet orders in the books so far for 2022. Business travel is back. Revenge travel and tourism is key. Let me give you a quick snapshot of how our markets fared at the end of last week. Of course Saudi Arabia was open yesterday and even in the sight of those bear markets that traded in the United States on Friday. You saw the Dow will down by seven tenths of one percent. That was led lower by the bank sector. By the way just to bear in mind that Saudi Arabia is up 19 percent over the past 52 weeks and you think of the other markets down 20 25 percent. So there's still a stoicism relative to the rest of the world. Here's the bounce back that has endured. Is that enough pain in the growth stocks story to warrant a clarion call to buy. We will debate C of Siemens Energy joins me shortly. This is Bloomberg Daybreak Middle East. Your top stories this morning stocks mixed trade this morning on the softer dollar but investors still cautious whether this sell off has room to run. President Biden arrives in Tokyo from Seoul. It's his first trip to the region as a U.S. leader. And with a plan to counter Beijing's influence Australia's new leader Anthony Albanese also heading to Japan for the cool meeting after being sworn in as the country's 30 first prime minister. That's Saudi Arabia's sovereign wealth fund takes a one point five billion dollar stake in Prince Alwaleed ISE investment company. Sending the stock. Casey. Casey soaring in rehab. Well Beijing has seen a spike in its Covid cases. You've got an active central bank. What does it mean for markets. David Ingles puts it together in Hong Kong. David. Well we still need to see what will happen amidst that rising case count. It was ninety nine. That's as a Sunday. So that's the highest in the current outbreak. And certainly the concern is you know does Beijing move towards the path of Shanghai. Because if it does we all know the economic damage there. You're looking at a mixed bag across the region and still about dollar weakness. You were talking about this earlier. Man is a big drop in the dollar last week. That's certainly what we're continuing to see in the region really more so against DRM. In fact this change things up. Have a look at well you're seeing it right now. But you know some of your key crisis right now dollar yen dollar China. Now as you can see dollar weakness continues to really filter through. Have a look at where we are here in the benchmark. We are at lunch break here in Hong Kong. Very strong start to the day that Hong Kong opened up. And this is essentially where we are in terms of the session right now. We're close to session lows. We are on the lunch break. So we'll see what happens these next few minutes or so minus. David let's just continue a conversation regarding this stock you warn of the risk that if Beijing goes the road of Shanghai that that is a risk to sentiment global sentiment. But what else is going to drive this market this week. I mean you get a sense certainly to people that we talked to you get a sense that the optimism is building but it can't go just the full way. While there is uncertainty over what happens there with with with the Covid strategy. Right. And with good reason. Right. You have a health care issue obviously that's separate. Then you have an economic issue. And by the way since we're talking about the virus here monkeypox that's that's the theme that's playing out across some of these virus and testing and health care names here. But to your earlier point let's have a look at where we are here and the benchmarks. Very good week last week. In fact we are so poised for the best month here for the CSI. Three hundred against the S & P going back about two years or so. But I'll end to this chart which actually shows you our first test because of that good week faltering at the 50 day moving average for the first time. That first test so far in 2022 minus. David thank you very much. Well Zimmerman's energy will offer four point three billion dollars to buy the shows it doesn't already own in Zimmerman's massive renewable energy. It's a long awaited move. And the attempt here is to turn around the troubled Spanish wind turbine maker. The CEO for Siemens Energy is Christian. He joins me now. Christian a very precise number. Eighteen point zero five. It's a rather odd number. Why such a specific offer of eighteen point zero five. And is this a final offer. Good morning from my side. And obviously yes we worked long on the evaluation of the offer and we put forward a prize to make sure that we exceed although the six months average value of the stock that was driving us. And this is why the number looks a little bit odd because it's based on the calculation procedures which are applied in the Spanish capital market. And this was a driver obviously for the pricing. Now I think we we put an offer forward for both sides of the shareholders for the Siemens company. So shareholders as well as for the Siemens Energy shareholders which we believe is a very attractive offer. And from here we work on and see over the next couple of weeks and months I'll see how we can proceed. What do you think it's do you think it's it's a full and final and plentiful offer. Well there is a very sound base. I mean we obviously have been looking in this transaction for a long time and we have a very light to date. And you also obviously see the opportunities in the wind market but we also obviously see the challenges what the company currently has. And in this regards we believe it's a very attractive offer to the Siemens companies our shareholders. And obviously we hope that we can convince the shareholders on that as well. For me the priority at the moment is also as fast as possible. Getting the company Siemens got me so stabilized and back to the success roads again in this attractive wind market. How do you how do you stabilize that company immediately. Do you pull out of do you pull out of the onshore wind. G G G G. G. Just put out of that what is that what I think when I was. No. First of all you know that they seem an economy that has a new CEO who is now developing a plan really on what to tackle first. A lot of the things what you're seeing is operational issues along the supply chain and logistics. It's not surprising in the current market. And these are things where I think we also can contribute ISE help a lot to the Siemens colleagues to help in this regard. That is something which is not only focused around the onshore market. So at the moment looking on the onshore market as the biggest wind market and also as a base for a good service business it is not an intention to change that. I think the setup makes sense for me. We will look further and further this. But obviously at the moment the key element for me is stabilizing the supply chain. Is this a conviction by or desperate move. No I mean at the end. I mean if you look on the electricity market or energy market I mean there are so many things which are changing but there are certain things were absolutely sure electricity were gonna grow stable over the next decades to come. Renewables will play a more more decisive role. All the growth is going to be covered by renewable votes potentially depending on the scenario it will grow even faster. So the mid-term picture on wind and renewables in general is perfect. That's a very very good in the current environment. Yes they are our operation and financial challenges. And for me the key thing is resolve these as fast as possible. And we believe the transaction can help to do this and achieve this as fast as possible. But what if you were a majority you were and are a majority shareholder. What more are you going to be able to do as full owner. Is it going to be a much more aggressive turnaround plan that you couldn't affect as a majority shareholder. Well you know at the moment is everything is about speech rights. And at the moment we act as a majority shareholder through the bolt rights say. Obviously there are certain elements as a majority shareholder which we can influence. It is say some time consuming processes. And obviously yes it gives us all the opportunity if we fully integrate the company to really make sure that on the supply chain on the logistics on the transparency also reporting we really harmonize the processes between the rest of the business that Siemens Energy and Siemens commits that we can leverage our much much bigger buying power in the market. And also on the financial side in terms of really also presenting the company the cash pooling and everything is elements you can leverage. So I think there's a lot of things which can make the process simply more effective. It's not that you couldn't do certain things as a majority shareholder but as I said the effectiveness and the speed of the measures is much easier in a fully integrated case. And the rest the market will ask itself is this as if had several profit warnings. You've had suspension of guidance. The risk to the market is that you take full ownership of this ailing company which has problems a multitude of problems from cash flow to inflation issues. And it's gonna be a drag on Siemens Energy's results. Can you assure the market. But that is not going to be the case. Yeah I mean first of all obviously we have seen that also our share prices really following also the seems comments on share price and the oil is always sets. I want to make sure that we are buying into an opportunity once we do this step. We have reviewed this carefully. We obviously know the company substantially well much better obviously than you. If you would not be an owner and in this regard we decided that we clearly can recommend our shareholders this transaction. And this is why we went forward now. And I'm confident that the two companies together form an absolutely strong leader in the energy industry which is really needed to drive that transformation of energy. Just how critical a moment is the energy market in Europe question. We deal with daily news flow on Germany to cut off Russian oil. Russia strangling supply into Europe. It's a daily it's a daily information road isn't it. How critical a point are we in the European energy complex. Well we see I think an unseen change in the European markets certain assumptions. What we had like for example access to cheap gas in Germany is going away and we have to replan the whole system. So I think we have still not fully embrace the open society. The amount of change which is going to come in which means there will be massive investment into the infrastructure which means electric regrets. We have to speed up the renewables. We have to build all the LNG import into Europe and in Germany particular. So that is a substantial change which going to come. I think we always have to recognize. I mean this is more or less just three months down the road since the war in Ukraine started. And obviously we now have to cut this big problem into pieces to understand what needs to be done. But for definite things that change what we're going to see in Europe in terms of energy infrastructure will be substantial. And this will also come with the need for significant investment into the energy infrastructure. Christian thank you so much. We wish you well with the full ownership and the bed. Christian Brook CEO of Siemens Energy. My guest this morning on the bed for the rest of Massa. They do not post right here on Bloomberg. Turkey's foreign currency reserves shrank at four point eight billion dollars in the seven days through May 13th. That is the largest drop in a year. The currency tumbled the most in so far this month. Simone Foxman has the details from Doha where the Economist are saying about the latest data. So Simona I mean this was a huge move in the reserves. Talk me through it. Yeah in fact Christian Maggio of T.D. Securities called this a shocking move here. And he said that it shows that policymakers are unsuccessfully leaning against the wind in their attempts to stall the weakening of the lira against the US dollar. State banks are always thought to have been be intervening in the currency markets but it's clear their efforts recently seemed to be hitting a wall with the lira continuing to decline. We did see a brief pause in that weakness against the US dollar late last week but we're only seeing that weakness continue on Friday and then again even this morning. Also not adding to positive bullish sentiment for the lira here. Is that an official who is in charge of compiling inflation data resigned over the weekend that fueling fears that the government is meddling with this data. So part may be part of the reason we're seeing continued weakness again today minus. And Israel's central bank makes its latest decision on interest rates. We've got an active Fed the bull I'm talking about consistent 50 basis point moves more pressure on the central bank. Absolutely and the question is not does the central bank hike rates. It's by how much the story is clear. If we jump into our G TV go we'll see that inflation right now 4 percent year on year for April well above the 1 to 3 percent target that the central bank is looking at. And that is expected to continue through the rest of the year. Last month the central bank delivered a larger than expected rate hike. So the question for analysts this month is do we get another 25 basis points or are we looking at something more like 40 basis points. As the central bank continues to talk about its aggressive policy. We'll see that data. We'll see that decision come out later today. OK Samantha thank you very much. That's Simone Foxman. Kailey Leinz from the Carter Financial Center in Doha. Now a couple of major stories driving the Middle East narrative but the latest headline that we have is the UAE. The IPL roster builds here. This is the UAE chemicals firm Burridge to see two billion dollars in an IPO. And of course it is the ad NOK Borealis jayvee. Let's ask my guest what he thinks of it all. Ali Taqi he's the head of Strategic Equities Client Solutions Matt Miller Investment. Another IPO while Abu Dhabi. Not to be left ISE are they. I mean you might you might have you might have water cooling. We've got chemicals but it adds the narrative. Big deal. How much of this is going to be about capital appreciation and how much of this is going to be about David about dividends. Ali we've got the price. It's going to 245 valuation around around 2 billion or a 20 billion dollar valuation. Two billion dollars to go. Do you think the clients lap it up. Good morning. Look the operating was announced just this morning. So are you still to look into the numbers. But I think most of ad knock related companies have been a dividend yield play with varying degrees of growth. But I think the more important point to highlight that the dividends of all of these stocks carry an upside risk. So what you see today optically looks a lot more lucrative and attractive to three years down the line. So for instance are not drilling if I'm not mistaken has already guided to a 5 percent increase in annual increase. FERTIG Loeb ran away with itself. Exactly. So all of these you know the CapEx needs of these companies the cash flow generating ability and really the debt levels a combination of that would allow you to see how much upside risk is there assuming no significant growth in the free cash flow. Well just looking back here at the statement this was the story that we wrote the other day. Boras expects its owners expected to receive nine hundred seventy five million dollars for 2022 financial year 2022 rising to one point three billion in 2023. I mean do you think this is going to be a very it's gonna be while Covid allocation is always difficult to get as that. Is that going to be tight. Do you think there is gonna be a well built up IPO given the market. Partly Bali at the moment. I think look the challenge with this the pricing of this IPO was where does it sit relative to its kind of sister companies or peers. And I think it's coming from the initial numbers. It looks that it will be fairly valued in or I mean attractively valued because that's where we see with this market correction the dividend yield names are really really attracting us at this point. And that's what we've been adding to. And we'll talk about you know your ads. You. I love. Would you say it's the stars aligned for banks. Absolutely. Now here's a shocking headline. We've got somebody telling us to buy Saudi banks and Emirati banks but I'm convinced me beyond names. As to the merit of your Saudi bank call on your UAE court how actively are you adding. We're constantly adding on on almost every weakness that you see in the market. But as I say the stars are aligned in the sense one we see the books are relatively cleaner now when compared to where there were about two years give or take Covid era kind of thing. The other thing is the rising interest rate environment which you mentioned rightly helps the NIMs and the profitability. If we look at government spending which a lot of it is local and is relying heavily on private sector participation that all translates into loan book growth. We've seen also the increased in IPO activities and if there is additional lending there is a very handsome pool of fees to be generated there for the banks. So I think this when you put everything together then it really boils down to valuations and that's where we see a really wide range. Just want to get your take on the P.A. I've taking a one and a half billion stake in our wallets. EADS company NYSE has been active recently. What does it say to you. Look it says multiple things but the way I look at it is collaboration is good. Combining forces is good. Kingdom Holdings our portfolio has had assets internationally as well as locally. And PPF is mandated to invest internally to boost the economic growth internally or locally I would say in Saudi Arabia. So you know an acquisition like this at the right price would make sense. And then pooling of assets pooling of liquidity is is just create a better. And let's say more carefully planned investment planned over the coming years. Ali thank you very much. Ali Taqi there which is called on the markets head of Strategic Equities and Client Solutions. RTX investment. Plenty more ahead on your Monday edition of DAYBREAK. Middle East. Sheet see Biden read ISE is ISE. And on that tape the conversations were broad. They included Ukraine North Korea China and supply chains. Japan and the US will work closely to counter China's coercive behavior said these are the first top lines on the relationship between the new prime minister of Japan Kishida and Joe Biden. As China's Wang Yi warns the Indo-Pacific strategy is doomed to failure and his new prime minister from Australia on his way to meet the quote let's get from the political elite to the Davos elite including Francine Lacqua. The World Economic Forum has returned en masse having been postponed during the pandemic. Francine Lacqua is utterly confused because it's warm it's beautiful it's not snowing. How are you. What's going on. What's on the agenda. RADDATZ I showed up so early because actually I didn't have to brave the. No I did not have to wear my snow boots. So actually you're right. A lot of the participants here just don't know how to get from A to B that I can walk and not slip. So yes this will also be a large thing. Look look it's beautiful here in Davos. Also without the snow a lot of participants will arrive this morning. Two thousand five hundred participants overall. But remember this is the first time in 28 months that the West actually convenes in person. There's a lot to get through. And that is not without controversy. Remember about us we've been talking through the years about how so many Russian oligarchs were here. And actually almost just behind me about 200 meters from the Congress Center. There was a house. That was Russia house. I remember used to go in and you saw ministers and you used to talk about some of the initiatives that they put in place. Now it's been transformed called the Russia War Crime House. It's a lot of the focus will be on Ukraine. But this isn't an uneasy transition for Davos that for so many years of course was friendly to some of the Russian participants. The other question is of course manners. What happens to climate change in the past. We've seen that Davos participants were not the best in trying to really pinpoint recessions. They weren't the right ones in looking at the next 12 months because they often got it wrong on what they should be worrying about. I'm speaking about Covid but some of the other things. One of the lead stories that we've got this morning the HSBC suspending an executive who downplayed climate change front saying how much will climate be on the agenda. Given that we've come you've come from cop in the autumn time to the hills of Davos you know do you think that climate will be up there. I would be all about Ukraine Russia conflict and energy. Yeah man it's climate definitely will be in most of the sessions. Again it's going to be different to what it was eight months ago when we had that huge spat between Donald Trump and Greg Feinberg here in Davos. The focus will be on climate change. But again it does have to be to have concrete action. And this is what we've lacking. We've been lacking here in the past. So there's a bit more hope that something can be done on Ukraine. But a lot of people as you know also just show up to do business. There is not that much great expectation of the deficit league coming together in actually signing some pledges that then will make a difference in terms of climate change. OK. Well enjoy. Enjoy the hills. Francine great work with Citadel Capital last week. Enjoyed the interview with Can and Chase a few ladies forests Francine Lacqua and the whole Bloomberg team in Davos for your coverage. And don't miss our interviews with the IMF managing director Christine Lena Georgieva the ECB president Christine Legarde the EU Commissioner for Economy Paolo Gent The Lonely and the NASDAQ president and CEO Danna Freedman joining the Bloomberg team. Quick snapshot of how we are across the global market map. China under pressure is the concern is that Beijing goes the road of Shanghai.

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