Israel Rejects Cease-Fire Belief | Horizons Heart East & Africa 05/07/2024

This is Horizon's Middle East andAfrica. Our top stories this morning.Israel rejects a cease fire plan backed by Hamas.It vows to continue its operation in Rafah.But we will still send a delegation. They will still send a delegation tomeet with mediators. Oil rising on tensions in the MiddleEast. Asian stocks fell on Wall Street higheron optimism that the Fed will begin cutting rates this year.Plus, we speak exclusively to the CFO of Adnoc Gas as the energy firm reportsearnings.

Well, it's just gone.8 a.m. across the Emirates.I'm Gianni Versace here in Dubai. Let's get a check on how markets arefaring. The theme is still risk on for theseglobal markets. A positive close for S&P and NASDAQyesterday as true to start bringing in the timing of that first rate cut fromthe Fed now sitting around a September, you can see behind me we've got the MSCIAsia Pacific Index and leaning into some of that positivity, also up around 2/10of a percent today. The S&P futures seen also building onsome of the positive momentum from.

Yesterday, but only up about five basispoints. Ten year yields obviously still infocus, sitting around four and a half percent, but worth bearing in mind.We've rallied about 20 basis points since that Fed meeting at just around aweek ago. So a long way to travel.Fixed income goals obviously in focus as well.A safe Haven bid is currently going through four.That's a commodity. Switching over to oil in focus here aswell as we talk about building geopolitical premium into this curve.And what's interesting is our terminal.

Trip chart today is showing that oil hassort of settled in this 80 to $85 range. You can see it is broadly a tight range.You broke through it over the course of the last couple of months, geopoliticalpremium being built in supply cuts weighing in as well as supply, a bigfocus for the commodity at this point in time.But we are back through 85 to the downside.Interesting to see where where we will go from here into those OPEC meetings.The big decision in a couple of weeks time as well.But let's check in on how markets in Asia are faring.April Hong is standing by in our.

Singapore studio.Avery, what is the latest this morning? Yeah, we're seeing a bit of a mixed bagin the Asia Pacific, even though the gauge of stocks is sitting a bit higher,thanks to what we're seeing in Japan and South Korea, that fed optimism.Japan, of course, playing catch up after the long weekend.But we're seeing that drag coming through from Chinese equities.The Hang Seng on track to snap a ten session winning streak, and that'sdespite positive news flow coming out from the Chinese property sector, thelikes of Shenzhen, the tech hub and the Tier one city, relaxing some of its homebuying restrictions.

Of course, we're also keeping an eye ondollar yen that's been nudging towards the 155 level as traders refocus on theyield differentials. That's, of course, something that's beenhelping the Japanese equities. The other currency that we've beenwatching today is the Aussie, as we'll hear from the Reserve Bank of Australialater this hour. And traders have mostly been pricingfor, if you can flip the board, take a look at the RBA expectations, mostlybeen pricing for a hawkish Reserve Bank of Australia, although we did get retailsales numbers that fell more than expected out of Australia today.So the path for work seems a bit less.

Clear Jomana.April, thank you so much for that overview.And of course, all eyes on that RBA decision.It's coming out at the bottom of this hour.Now our top geopolitical news today. Israel has rejected a cease fire planbacked by Hamas, the country's war cabinet, saying the proposal falls farshort of their necessary demands. It also vows to continue militaryoperations in Rafah after warning civilians to move out of parts of thecity. However, Israel says it will still senda delegation to meet with mediators.

Hamas and Israel have been negotiatingvia Qatar, Egypt and the US on an agreement that would see the release ofIsraeli hostages held in Gaza in exchange for Palestinians detained inIsraeli jails. It also includes a pause in fighting atBloomberg's Middle East economy. And government editor Paul Wallace ishere with more. Paul, a lot of news to digest over thelast 24 hours. At one point in the evening, it seemedas though a truce was in sight. But then, of course, the Israeli sidecame back and said that there were parts of the proposal that were unacceptable.Is there still hope for a truce deal to.

Be agreed at this point?Hi, Jim. There is.And these as you mentioned, these negotiations are continuing.The next stop for those is Cairo, where envoys will head back to.However, things certainly do not look great.And if anything, it seems like there's been a bit of regression in the last twodays as far as negotiations are concerned, are concerned.Israel rejected a proposal that Hamas said it had accepted.However, it's still unclear what exactly was in that proposal.As far as Israel is concerned and for.

And from what Israeli officials havesaid, it clearly didn't include everything or it wasn't exactly as theywere expecting over the over the weekend.And as you say, details are still thin on the ground.We don't know exactly what is included in that proposal.But what we do know is it's not enough to get Israel over the line.There is also talk that the Hamas side have been pushing not just for a ceasefire, but what they're calling, quote unquote, a period of sustainable calm ora permanent cessation of military and hostile operations.What appetite is there from the Israeli.

Side to go along with that, do youthink? I think very little and this is a bigsticking point at the moment. Broadly, the two sides are agreed on howhow many hostages should be released and how quickly and how many Palestiniansdetained in Israeli jails should be let out.But what they're not agreed on is Hamas wanting the war effectively to end whenthere is a truce. It wants a ceasefire to be permanent.For all intents and purposes. Israel does not.It says it still wants to destroy Hamas as a military organization.The group still has several thousand.

Fighters in Rafah.And Israel says that until that happens, until those units are destroyed, the warcannot be over. Israel is still intent on achieving whatPrime Minister Benjamin Netanyahu calls total victory.And in his eyes, that doesn't happen until until Hamas is no longer standingas a military organization, many Israeli families are standing by waiting for therelease of those hostages as well. Paul, obviously, we will be coveringmore of this story, but thank you for giving us an overview of the latest inthe last 24 hours. That was Paul Wallace, Bloomberg'sMiddle East economy and government.

Editor.Well, let's bring in Fleur Hassan, the special envoy to Israel's foreignministry and former deputy mayor of Jerusalem.Good morning to you, Fleur. You probably heard my discussion nowwith my colleague talking about the terms of the truce.Let me just put the question to you. What is it about that proposal putforward by Hamas yesterday that proved unpalatable to Israel?Well, first of all, you have to understand that this is the fifth dealthat has been offered to Hamas. And instead of accepting or rejectingit, all Hamas has done is come with a.

Counteroffer.That is very far from the last very generous offer of Israel.And the sticking point really is, as you mentioned earlier, does Hamas stay onits feet after the war? And to Israel, Hamas is not just anotheraggressive regime. It is an existential threat because themassacre of October 7th, they have continuously repeated that they wish todo again and again. So Israel cannot remain safe if Hamasremains in control of the Gaza Strip. And that's really the sticking point.And as you can understand, as America would not have allowed Osama bin Ladento stay in his place with the power that.

He had and ISIS to remain as a party oras a movement in the Middle East. This is what we're facing right now.The fact that these discussions are still taking place and the PrimeMinister Netanyahu, has suggested that delegates will still continue theseconversations with Hamas. Does that not also, in your eyes,legitimize Hamas as a political party? Look, ultimately, we're doing thisthrough mediators, through Qatar, through Egypt, our neighbor, who we havepeace with, and we have no choice because we have 132 hostages that wedon't know how many of them are alive because we haven't received any proof oflife from them.

But ultimately, we owe it to thosefamilies to try our best at every given juncture to try and get them home.They cannot remain there in those terror tunnels.God knows what they're experiencing. We have a one year old baby.We have a two year old people. And so in order to get the two the twoobjectives of the goal, one is to bring the hostages.And two, is to make sure that Hamas does not continue to exist, ruling the GazaStrip, not just for Israel, but for its own people.They have brought a countless horrors to their own people.Let me just ask you what happens next,.

Because there have been reports formonths now suggestions that a new front is going to open up in Iraq, and that isthey're going to go ahead with that offensive despite warnings from theU.N., from the U.S. that this would cause another severehumanitarian crisis within Rafa. What is the appetite from Israeli sideto go ahead with that offensive? And why would you do it if it would riskputting a wall between you and your closest allies?Well, there's not going to be a war with Egypt.That's definitely out of the question. Egypt understand to come Assad.Egypt has spent the last ten years.

Trying to get rid of their own MuslimBrotherhood version of Hamas within their territory.So I'm not concerned about that. Look, we posed five different deals andHamas at every given point said no. The only time they began to say yes orshow any type of flexibility is when they knew a Rafa offensive was imminent.That's the only time they showed any type of appetite to continue talkingabout a deal. So Israel has to continue with itsoffensive, mainly because Hamas, this is the only time they will actually get tothe point of any compromise. And that's why we have to go ahead withRafah.

It's very sad that we got to this point.Two months ago. We did not go into Rafah because thewhole world tried to mediate a truce with Hamas and Hamas was having none ofit for the last two months. Let's go back to the talks about thetruce and where we go from here. In your eyes, is there still apossibility? Is there hope that this truce can getover the line? I think there's hope that there's hope.The prime minister sent a delegation to continue to talk the terms to see if wecan actually close the gap between Israel's minimum and Hamas's minimum.So it's not over.

There is hope.I am, you know, connected to many of the hostage families, and I pray for theirreturn every day. And I really hope that we can closethose gaps and we can start talking about returning those innocent peoplehome. But what's really disturbing to meactually, this morning is that one of the statements that Hamas made was like,if they can't find 32 hostages alive, they will compensate with dead bodies.What does that mean? There's 132 people in there.What does that mean? They can't find 32 people alive.That really is disturbing to me this.

Morning.And I hope that we can get not just our hostages, but proof of life of the restof them. Sir, thank you so much for joining us onour show this morning. We appreciate you coming on.Thank you. Flora has done at the home of specialenvoy to Israel's foreign ministry and former deputy mayor of Jerusalem.Well, still ahead on our show today, Adnoc gas CFO Peter Vendrell joins usexclusively to break down their quarterly results.This is Bloomberg. So the jobs number, in a way, while itwas lower, it's actually encouraging to.

Think, okay, now we're going to start tosee maybe a way forward where we are having a you know, they always call it asoft landing, but a way for us to slowly slow the economy, manage down theinflationary environment, and therefore be able to lower the cost of capitalover time. For me, it's really looking at thetotality of the data and not just looking at an employment report or a CPIor other piece of information. You really want to make sure we'relooking at the broad picture. We have the maximum employment and pricestability goals that we want to, from my perspective, see all the data andinformation speaks to all of that.

And really, you know, as the data comein, hopefully we'll be moving in the direction we want to see both oninflation and in terms of restoring balance to the economy.And then we'll make our decisions based on on that.That was the New York Fed president John Williams, and the Nasdaq CEO AdenaFriedman speaking to me yesterday. We were talking about the state of thefintech industry, but of course, it had to bring in macro.Let's also bring in for this discussion then that has their fight there.The CEO, CIO at Lone Ogi, wonderful to have you with us here in Dubai also.Let's just pick up on the market.

Narrative right now.It feels as though Friday's NFC Prince was a real turning point because tradersonce more started thinking about the timing of this first rate cut.For a while, it was looking as though people were starting to think about ratehikes again, but now they're back to the rate cut narrative.How pivotal of a number do you think that NFP Prince was in terms of marketdirection? I think it was really soothing thesentiment that was growing nervous about all the inflation data that had precededand for the inflation outlook. Having a softer jobs report, a softerpayroll and also slightly higher.

Unemployment rate, wage growth beingbelow expectations just means that services inflation is headed the rightway and services inflation is the most important one in the outlook for now.What do you make of Powell pushing back so much against this prospect of ratehikes and the press conference? I think it is all about directingexpectations, right? On the one hand, they don't want to beover promising and they don't want the market to go ahead of itself.And on the other hand, it also doesn't want the market to to just go down in aless controlled way. So I think it is all about managingexpectations, really.

How many rate cuts are you pencillingfor this year? We think it's going to be somewherebetween two or three. Our base case is for three rate cutsstarting in July probably. So here's the question I have for therate cuts and community core PCE, which is the indicator that the Fed looks at,is still closer to 3% than it is to 2%. Do you believe that that number canstill get to 2% if the Fed start the rate cutting cycle in the next couple ofmonths? I think so.I mean, in terms of just looking at how the consumption is behaving and thesoftness of that, how this is related to.

The labor market, I think we are headedthe right way. I mean, what the Fed really needs is notso much the point number to be true, to be out in in reach, but the direction togive it confidence that it is on the right path.So I believe there is very good room for rate cuts.Okay. So how does that translate to marketopportunities then? We've been tracking equities.Things have been doing well since mid last week.Rates obviously rallying a lot to the dollar has started softening to thosetrends continue.

Look, I think the most importantopportunity for investors right now is to seize the rate levels that areattractive. I mean, consider that for a moment.In spite of all the re thinking around how many rate cuts could actually bedone in this year, The equity market has been so strong since the beginning ofthe year and contrast that to what fixed income has done.And I think at this moment, really being overweight in fixed income does make alot of sense. Do you have a target on where the tenyear yield could get to? I think we are headed towards 4% andthis would be a 12 months target and.

Forecast for sure.When you think about not just the Fed but central banks around the world aswell, we have the Bank of England this week, RBA in just a few minutes now.Where do you think the Fed stands in terms of setting the standard ofbeginning the rate cutting cycle versus other central banks that they could beinclined to wait for the Fed? Or do you think that individual countrydynamics are going to have to proceeds? I think idiosyncratic and individualdynamics are all all about 20 and 24. The Swiss National Bank has beenstanding out as the very first of the of the well-regarded central banks to cutinterest rates, and it will probably be.

Followed by the ECB before the Fedactually starts. So I think there is just a dynamicsabout central banks going to be very individual.And contrast that to the Bank of Japan. That is very late in the hiking cycle.So at a completely opposite end. Yeah.So then how do you tie that back to the dollar?Then again, the theme of last year was US exceptionalism.And even when we talk about rate cuts, other central banks around the worldseem to want to get going. To your point, S&P have started.Maybe, you know, ECB have been hinting.

Strongly that they're going to go in thesummer as well in that environment and a game of relativity.The dollar is still is king, isn't it? I think so.We are. Still betting on the dollar, certainlyagainst most developed markets. Currencies against emerging marketcurrencies may differ a little bit, but overall the dollar remains strong.Yeah. Yeah, that seems to be the case.And then that I'm going to leave it there.It's so wonderful to have you with us on the show and enjoy your time in Dubaithen that has faith there.

The Emir CIO at Lombard OJI.Also coming up on our show, Aramco's Profit in Focus ahead of first quarterresults out later today. We will have a preview coming up next.This is bloomberg. Welcome back to Horizon's Middle Eastand Africa. I'm of Versace in Dubai.Aramco's profits and shareholder payouts are in focus ahead of first quarterresults out today. The Saudi oil giant has lowered itsproduction since the second quarter of last year in line with the OPEC+ cuts.So let's get more from Bloomberg's Middle East energy editor, AnthonyZappala.

Good to have you with me on the show thefirst time you joined me on the set. So it's good to have your perspective.Let's just talk specifically about Aramco.Clearly, they've had to cut down on production in line with these Opec+cuts, but at the same time, oil prices are higher.So what does that mean for that profit? Yeah.Good morning. It's good to be here.Yeah. It's likely that that productiondecrease is going to hurt the profit going forward.Bloomberg Intelligence is forecasting.

About a 10% decline in the net profit.And if you look on a on a quarter to quarter basis, we've got, you know, verylittle movement actually between the two quarters in the oil price.So we have seen that come up so far this year.But on a quarter to quarter basis, we're pretty much there.So that that decline in production is going to is going to impact the profit.As you mentioned, they've had to cut that because of the Opec+ cuts, plusthose voluntary cuts that many OPEC members led by Saudi Arabia have made.So they're producing around about 9 million barrels a day at the moment.That could change going forward later.

This year if Opec+ sees that demandcoming in and sees stockpiles reducing. But so far, they're roundabout thatlevel. What about income from Sabic?Sabic has been disappointing the petrochemicals arm.How likely is that to pose a drag on overall earnings?Yeah, well, Saudi Arabia is the majority owner there, so that is going to have animpact there. And we've seen the global petrochemicalindustry suffering basically because of things like feedstock prices.Simply energy costs in terms of running a lot of chemical plants.So that's impacted more kind of the.

European aspect of of the chemicalbusiness. So we've seen a lot of those MiddleEastern producers doing a little bit better.But but yeah, Sabic is having some problems.So that is going to weigh on Aramco. So we'll keep an eye out for theearnings later today. Anthony, the color, thank you so muchfor joining us on the show. A quick check at how oil is faring as wetake into consideration the geopolitical risk premium that is building into thecurve. And you can see that we are trading justshy of $84 now.

So 83 six is over at about 3/10 of apercent firmer at nine max. Crude oil also just sitting below $79 aswell. This as we head into that all importantopec+ meeting in a couple of weeks time. At this point, the market is notexpecting a any change when it comes to those output quotas.But of course, things could change. And again, geopolitics on the horizon aswell. So that is your check for crude oilright now. But coming up, we are going to beassessing where things stand in the war in Gaza as truce talks falter.This is Bloomberg.

This is Harrison's Middle East andAfrica. Our top stories this morning.Israel rejects a cease fire plan backed by Hamas.It vows to continue its operation and death, but will still send a delegationto meet with mediators. Oil rising on tensions in the MiddleEast. Asian stocks fell on Wall Street higheron optimism that the Fed will begin cutting rates this year.Plus, we speak exclusively to the CFO of Adnoc Gas as the energy firm reportsearnings. And it's just gone.8:30 a.m.

Across the Emirates.I'm sure a lot of Versace in Dubai. Some breaking news we want to bring toyou. The RBA have decided to keep ratesunchanged, so keeping the cash rate target at 4.35%.Let me just bring you a little bit more commentary that we're getting from theRBA. The board is not ruling anything in orout. RBA needs to be confident that inflationis moving sustainably to target. Inflation is falling more gradually thanexpected and of course they're there referring to the surprisingly highquarterly prints we had the last quarter.

Above markets expectations.Further commentary from the RBA saying wages growth are above sustainable levelgiven productivity inflation easing slower than previously expected.So more commentary is coming through. But what we can see is the Aussie hasdropped the Aussie dollar down about 3/10 of a percent.On the day after this announcement came out, some people thought that perhapsthey may even go for a rate hike or perhaps some more hawkish with thecommentary. But let's get out to April in Singaporefor reaction across these markets to that RBA decision to keep ratesunchanged.

APRYeah, keeping things unchanged, but I guess what you alluded to is theinflation outlook of the RBA as inflation eases more slowly than thecentral bank has hoped, That seems to strike a more hawkish tone from theAustralian Central Bank. Of course the attention will be shiftingto the words of the RBA governor in the next hour and as we sift through thatstatement, we are seeing the Aussie losing ground, pulling away from 67 UScents pressure coming through a little on the policy sensitive to here and theAustralian stocks still hanging on to the gains of about 9/10 fuelled ofcourse as well from the narrative that.

The Fed rate cuts are still on the tablethis year. Lots to talk through when it comes tocentral banks today Jomana. April, thank you so much for thatoverview once more. All right.A quick market check on our. April just alluded to this, but MSCIAPAC is doing quite well. So up about 2/10 of a percent today onthe session. Building on some of the positivity wehad at the US session. S&P futures also leaning towards thegreen. We've got ten year sitting below 4.5%gold also in focus.

The safe haven commodity tends tobenefit as the market prices in more rate cuts.So we're keeping an eye on the price of gold.It is, of course, up 12% for the year. But our main geopolitical news.Israel has rejected a cease fire plan backed by Hamas with the country's warcabinet saying the proposal falls far short of their necessary demands.But officials say a delegation will still meet with negotiators in Cairo.Israel is promising to continue military operations in Rafah after warningcivilians to move out of parts of the city.Joining us now is Saran Up, Harvard,.

Lesko, the control risk group.Amy, a partner. Thank you for joining us.This is a big deal. We were speaking about it earlier on theshow and the potential of a breakthrough with Israel, Hamas.But it seems as though Israel are not happy with the proposals that are on thetable at this point in time. Let me just ask you, this.Is a lasting cease fire actually achievable at this point?I think that's a critical question. And as you say, we are at a criticalpoint now where that might be more likely than it has ever been in the lastfew months.

I think clearly the two sides havemaximalist demands, Right? Israel does not want a lasting ceasefireuntil it has secured a secure thehostages hostages, but also has sort ofmet its vow to defeat Hamas, which which, according to Mr.Netanyahu, hasn't happened yet. Hamas has an interest in agreeing aceasefire because it will live another day to fight for it.So it is a critical moment where the pressures have gathered to the to to theboiling point and it may become possible to actuallyend up with a deal yet.

One of the paradoxes I see is the wholegoal from Israel's perspective of going ahead with the invasion of the war inGaza was to neutralize Hamas. That's what they wanted to do.And yet here we are seven months later, you have more than 30,000 casualties onthe Palestinian side. The Israeli hostages are still beingheld by Hamas. There are truce talks taking placebetween Israel mediated by US, Egypt and Qatar, but Hamas is still the otherside. So if their goal was to neutralize ordefeat Hamas, that hasn't happened and that's why it's going to be difficultfor them to get this over the line,.

Because if their goal was to neutralizethem in a way by going ahead with this truce, that they're also legitimizingthem as a political party. The classic Catch 22 situation.Right. You can't.Israel doesn't see a future of Gaza with Hamas events, but there but it has towork with Hamas to end up with a resolution.And that has made the situation extremely complicated.And then, of course, you have the set of constraints that each of these sideshave internally, domestically. Prime Minister Netanyahu has a lot ofpressure internally, both from.

Protesters who are demanding that he hegoes forward to release the hostages, but also from his political allies whoare intent on a Rafah operation. If this truce deal falls apart, howlikely is it, you think, for Israel to go ahead with the offensive?And so far, I think to some extent, they're already have started anoperation in Rafah. They have called it limited.And I think the the the there is a chance that they will they will juststrike in Rafah sufficiently and occupy positions in Rafah, the IDF sufficientlyto be able to allow Netanyahu to call that a successtogether with the release of hostages.

And that would create the opening to geta ceasefire. The alternative is that you'll have amore prolonged operation in Rafah, but still I think with a lot more focus onthe humanitarian situation and in more surgical than sort of full scale.I just wonder what that means for Israel's standing within theinternational community because many, including their closest ally, USPresident Biden, has warned Netanyahu not to go ahead for the offensive.From a humanitarian perspective. You heard from the UN as well.If they do decides to go forward with the attack on death, what does that doto Israel's standing within the.

International community and some ofthese deep relationships that they have with their Western allies?I mean, certainly Israel's been more and more isolated in the last few months, atthe very least throughout the conflict. And we there are if Hamas is actuallyencouraging that or sort of appreciating that, because it weakensIsrael's position. Right.To negotiations and has come to this point,I think some of the stronger allies will still be there.And we have to understand as well as for Israel as it is for Hamas, for Israel,this is an existential threat, and.

Particularly for Prime MinisterNetanyahu. It is an existential threat.And that's what makes it the tensions. A final quick one.How close are you watching what's happening in southern Lebanon, thenorthern border with Israel, the daily CROSSFIRE exchange in Israel?Yeah, those have died down a bit. I think the both houses in the in theRed Sea and the Hezbollah attacks will continue.If we see more operations in Rafah, we will see an intensification of theseattacks. But probably we expect them to be withinthe parameters that we've seen until.

Now.So tit for tat, no further escalation. Yeah, well, at least no furtherescalation there for the time being. Thank you so much for joining me on theshow today. Valuable to hear your perspectives.That was Serrano Pepper Lesko control risk group email partner.Also coming up, we ask whether Chad and Togo's presidential elections candeliver meaningful change. That conversation also coming up next.This is Bloomberg. Welcome back to Horizon's Middle Eastand Africa. I'm John Versace and Dubai.While we have been monitoring the.

Headlines coming out of Israel over thecourse of the last 24 hours, and what we are hearing now is that Qatar are sayinga delegation is heading to Cairo Tuesday for truce talks.So these ongoing negotiations are still occurring between the two sides, betweenIsrael and Hamas, mediated by Egypt, by Qatar and the US.Al Jazeera also reporting now that Israeli troops have now entered theRafah crossing south of Gaza Strip. So this is per Al-Jazeera.And as we have been mentioning on the show, the focus is, of course, whatIsrael decides to do in it and whether they go along for the attack.Now, Hamas says movement of people aid.

Has now stopped at the crossing.Hamas says the movement of people has not stopped.So we are also getting a commentary out of the Hamas side of the equation,saying that both the movement of people and humanitarian aid that are beingcrucial to the delivery of humanitarian aid to the rest of the strip has nowbeen stopped. So some breaking news there.All right. In Chad, the votes are being counted ina long delayed presidential election, with military leader Mohammad Debywidely expected to win. Meanwhile, Togo's ruling party has won alandslide in last week's elections,.

Setting the stage for the family dynastyto extend its 57 year rule. Let's bring in Bloomberg's On zeroGanga, who is in Kigali. And just give us a sense for how theseelections in Chad are going to play out and what it means for the economy.If we start with Chad, it's almost a case of you can't have your cake and eatit leading to this election. There has been growing anti-Frenchsentiment in the country, and this is because President Mohammad Dhabi wantsto be seen as an independent and less dependent on the West.And also the people want to feel like they're in a sovereign country.And so this is the reason why America is.

Becoming the casualty.They only have 100 troops in the country.But authorities have said that their presence there is illegal.They're fighting beside a thousand French troops trying to curtailinsurgencies in the region. The U.S.has already said they'll begin withdrawing their troops, but France isnot going anywhere. They have too much of a strategicrelationship with Chad to be able to leave leading to this election, that acouple of issues are key to the people of Nigeria, one of them being security,the other being reducing the cost of.

Living.But to Chad's external partners, what they're very keen on is maintainingregional stability and the flow of refugees there, 500,000 of them in Chad.And the fear is that they might start trying to make their way to Europe.Oh, and what about the elections in Togo?But what are some of the key takeaways over there?What does that mean for the economy there, too?This is very interesting elections for the region because, one, they werepostponed twice and in just a week leading to the voting that we sawconstitutional amendment that removed.

Presidential time.And also so that the president will be elected by a parliamentary system.Critics have said that this is a political move by the president to stayin power for longer. And the people at the polling stationsay they hope they were able to have a say in who becomes president.The issues also remain structural and fundamental issues.Security is one of them. Infrastructure, electricity, but mostimportantly, poverty alleviation, because the World Bank estimates that40% of that country live in poverty. Bloomberg's Indira Gandhi.Thank you so much for that overview of.

The elections and obviously crucial forboth of those economies. Thank you.And we will bring you the latest from how those elections unfold.We are just getting now what we should be getting, the results of the earningsout of UBS. And this is going to be a crucial andactually quite an interesting one. A lot of focus on their capitalposition. Worth pointing out that UBS shares havelost about $9 billion of market cap since the publication of those too bigto fail rules out of the Swiss authorities.So this is what we're getting in terms.

Of headlines.The pre-tax profits have come in at $2.38 billion.That is a big beat versus the estimate of 1.16, and that's income 1.76 billionversus estimates of 598. So very big beat on that income, pre-taxprofit as well. UBS says it has capital ratio for 2020for capital return goals. That was a big focus for investors eversince the takeover. A lot of questions about their sharebuyback and distribution programs, but UBS and now confirming that they willhave the capital to go ahead with those capital return goals.UBS to achieve another $1.5 billion in.

Cost savings by the end of 2024.Remember, this is a big focus of the CEO, Sergio Ramos, since he came in,took over Credit Suisse. Cost savings, cost synergies, what theycan do to save several billion dollars over the course of the next couple ofyears. UBS sees $1.3 billion of integrationrelated expenses in the second quarter. Low to mid single digit decline inglobal wealth management NII in second quarter.That is also a key figure. It's a pick up on why?Because a lot of the income that comes into UBS is derived from their wealthmanagement unit.

The fact that their net interest incomeis now seeing a decline as single digit decline is perhaps not so promising formarkets. So something to bear in mind there.But headline is we had a very strong beats on both the top line and thebottom line. And they have also said that they planto continue with their capsule buyback plan.So do not miss our interview. Francine Lacqua is going to be sittingdown with the CEO, Sergio Ramos, at 10 a.m.to buy time. That will be happening at seven in themorning UK time.

Also coming up on our show, Adnoc gasreports first quarter revenue that comes in strong.We speak to the CFO of Adnoc gas next. This is bloomberg. Welcome back to Horizon's Middle Eastand Africa Asia minor Versace in Dubai. Adnoc Gas reports first quarter revenuethat grew 16% from last year. The company has been expanding CapEx andplans to build plans to invest rather over $13 billion through 2028.Let's bring in Peter Van Drew Adnoc, CFO.Wonderful to have you with us on the show.Maybe let's just start with that.

Headline number.Your first quarter revenue has come in at 6 billion, around 6 billion versus5.2 billion estimates. So it feels as though it has been a goodyear. How would you describe it in your ownwords? I think it was a very strong performancein the first quarter. Your revenues, as you say, $6 billion,which is 16% of all EBIDTA was strong, $2 billion.And then last but not least, net income, $1.2 billion in the quarter, which is20% higher than the first quarter of 2013.So orbital a very strong quarter for us.

Hmm.Where do you think growth is going to come from in the future?I know in the past you've talked about growing on an international scale,acquiring new positions in other parts of the world, including in Europe andIndia, China, Southeast Asia. Which of those markets are you lookingto to enhance your growth profile in the future?As you say, I gas is very much about a growth story.We will spend at least $13 billion in the next five years.That growth is organic growth. The growth will be in the U.S.We saw, by the way, in the first quarter.

That all of the growth in revenues waslargely attributable to the U.S. demand for the biggest petrochemicalsupplier of feedstock. We supply about 60% of all the gas inthe U.S.. So it is a balance of growth insidecountry and international growth that we also, of course, pursue in order tosupport our growth story. If.Right. So coming back to that $30 billion thatyou plan on investing, what does that do to your margins and how do you foreseemargin growth alongside the investments that you're putting in?Right.

I'm no guy.So we could use gas or we liquefied gas, and that is what we're doing.We will grow, as I said, internationally and domestically.And with that, we believe that in the next five years, our volumes will atleast go up by 20%, if not more. So there's a clear line of sight growth.And that growth, of course, is on one hand strengthening the company, but alsothe shareholders will benefit from that because we also intend to grow ourdividend of $3.25 billion by 5% every year.So it is not just the company growing, but it's also the shareholdersbenefiting from that growth.

What are you seeing on the demand sidefrom overseas markets and how do you see things panning out in the context of theglobal economy, some of the headwinds facing the global economy?What are your signals telling you? So what we have detected today is thatthe economic growth remains strong, and that is evidenced by the fact that ourLNG portfolio, for example, continues to deliver cargoes either to the region orto the Far East. We recently concluded a deal with India,Gail, another 45 MW to date, and that is a clear indication of growth for us.But it's also a product like Nevada and Golden State that today are all growingand that is actually what drives this.

Growth in revenue.As I said before, from 5.2 to $6 billion in the quarter, underpinned by growth,domestic and international growth. Yeah.Yeah. Very clear.Can I just ask you what the status of Adnoc gas is?Deep bottling the debottlenecking of gas islands, LNG plans.When is that going to be completed? So on those island offshore UAE, we haveLNG tracks. So that is where we liquefy the gas andthen sell it. International debottlenecking is reallymaking the most of what you have.

You have certain technical tweaks whichenable you to process more energy in your facility.So it's a cheaper way to grow. And given the demand for LNG, we'recommitted to making sure that that capacity stays in line with demand.And if I may ask our comment, and you may have heard that, of course, thecompany is also looking at a new facility which is called Huawei's LNG.That is. 9.6 M Yes, that will be commissionedsomewhere in 28. So that means that we will double ourLNG export capacity. Yeah, very clear.I was going to ask you about capacity,.

But I think you anticipated my question.Peter, I'm going to leave it there. Thank you so much for joining me todayon the show. Peter Fenn, Jill Adnoc, gas CFO, thankyou. Well, let's just recap earnings that wehad from UBS this morning. A big signal for the European bankingsystem as a whole, one of the first of the European banks to report.And what we got are the headline level net income of 1.76 billion versusestimates of around 600 million. So huge beat.They're coming in almost three times what the market had anticipated in termsof more commentary.

We had a bit on the investment bank thatalso came in higher than expectations. We had the wealth management income comein line with expectations 1.1 versus estimates of 1.13.Always crucial for UBS, given how big a part the wealth management group playsin terms of driving their overall profits.UBS expects the merger of UBS, AG and Credit Suisse AG on May 31.That is in reference, of course, to the Swiss unit of Credit Suisse has been afocus for the markets as well. And then this one is interesting,something to watch out for for later. UBS sees low to mid single digit declinein global wealth management net interest.

Income in the second quarter.So not very positive guidance on net interest income there.But then on the flip side, they have confirmed that they have the capitalratio for 2020 for capital return. That is good news for anyone who wasgetting nervous about their capital distribution plans.But do not miss our interview with Socha Multi later today.Francine Lacqua will be sitting down with him.See that interview at 10 a.m. to buy time at 7 a.m.UK time here on Bloomberg TV. Before we let you go, let's take a quicklook at how markets are faring.

This is a look of equity futures tradingsideways. Nasdaq around flat as well at your stockfutures seen opening up in the green, but that is it for our show.Thank you for watching. This is Bloomberg Horizon's Middle Eastand Africa.

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