WEBVTT - Surveillance: World Economic Forum in Davos Kicks Off 0:00:09.880 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Lee. 0:00:13.960 --> 0:00:17.560 We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:33.839 Bloomberg dot Com, and of course on the Bloomberg. The 0:00:33.920 --> 0:00:36.720 weather is beautiful here in Davos at the meetings of 0:00:36.720 --> 0:00:39.760 the World Economic four and the theme globalization four point 0:00:39.760 --> 0:00:42.839 oh maybe pushed aside by the news slow yes, brexit, 0:00:42.960 --> 0:00:46.440 yes to shutdown, but also global slowdown. All of this 0:00:46.600 --> 0:00:50.880 wrapping around conversations on China, and again, as we said earlier, 0:00:50.920 --> 0:00:53.760 it could be all one or two hour conversation with 0:00:53.920 --> 0:00:58.240 Laura Chash. She's Hong Kong Exchange share working in finance. 0:00:58.440 --> 0:01:02.200 Years of Pillsbury, I'm and other law firms with far more. 0:01:02.280 --> 0:01:06.679 She is Laura Chure of the University of Wisconsin at Madison. 0:01:07.120 --> 0:01:12.759 What was it like your first day? I was coming 0:01:12.760 --> 0:01:16.600 from Hong Kong and Little Cot It was shot and 0:01:16.760 --> 0:01:19.399 this was in the late sixties. I'm betraying my age. 0:01:19.720 --> 0:01:22.720 It was the days of the Vietnam protest, so I 0:01:22.760 --> 0:01:28.000 was thrown right into that and interesting, interesting, exciting, and uh, 0:01:28.400 --> 0:01:32.119 this is a really introduction to the to the United 0:01:32.520 --> 0:01:34.839 It was a politics at the time, and Mr Kissinger 0:01:34.880 --> 0:01:38.280 and Mr Nixon to that and all. If you could 0:01:38.280 --> 0:01:40.920 have a cocktail right now at the Mandarin Bar in 0:01:41.040 --> 0:01:45.040 Hong Kong was selected members of the Trump administration who 0:01:45.120 --> 0:01:49.640 feel China is a behavioral, a cultural and a social threat. 0:01:50.040 --> 0:01:52.920 What would you say to them at the m bar? Well, 0:01:52.960 --> 0:01:57.880 I think, first and foremost, Uh, we're talking about different culture. 0:01:58.440 --> 0:02:02.000 We're talking about include sution. We have to be accepting 0:02:02.080 --> 0:02:05.120 of other people's valued and culture. But there are some 0:02:05.360 --> 0:02:09.040 common value even though we may have different culture. I 0:02:09.080 --> 0:02:15.720 think the core valued of you know, of integrity, um, honesty. 0:02:16.320 --> 0:02:19.600 These are values that the rule of law. I mean, 0:02:19.680 --> 0:02:23.200 these are values that Hong Kong hosts there and that's 0:02:23.320 --> 0:02:26.240 what made Hong Kong successful. In the last few decades, 0:02:27.520 --> 0:02:31.880 China has repeatedly promised to open its financial system to investors, 0:02:31.919 --> 0:02:35.600 foreign investors and foreign companies. What more, how's it going? 0:02:35.720 --> 0:02:39.239 First of all? And what more do they need to do? Oh, 0:02:39.280 --> 0:02:43.360 there's actually quite a lot that that the central government 0:02:43.440 --> 0:02:46.920 can do in opening up the financial market. When China 0:02:47.040 --> 0:02:49.920 joined the w TEL in two thousand and two, UH 0:02:50.080 --> 0:02:54.320 Financial Services was one of the least open of all 0:02:54.360 --> 0:02:58.000 the sectors, and over the years, gradually they have opened up. 0:02:58.000 --> 0:03:01.760 They have allowed foreign ownership in banks and security houses 0:03:01.840 --> 0:03:05.919 and so on. But because the currency is not completely convertible, 0:03:06.400 --> 0:03:10.400 so foreign investors now can access the Chinese markets through 0:03:10.440 --> 0:03:13.680 Hong Kong, so to stock connect scheme, what else can 0:03:13.760 --> 0:03:17.080 the central government do? I think they have already said 0:03:17.160 --> 0:03:21.680 a few months ago that they are eliminating the restriction 0:03:21.760 --> 0:03:24.840 on ownership. But what is more important is really not 0:03:24.880 --> 0:03:29.240 only just the ownership, but allowing foreign investor to participate 0:03:29.760 --> 0:03:33.760 in that market and vice versa. I mean that that 0:03:33.800 --> 0:03:36.400 has to be a two way street. I mean, we've 0:03:36.400 --> 0:03:39.040 seen some crazy moves on the stock markets, right, I 0:03:39.080 --> 0:03:41.600 mean one day that I think companies lost some five 0:03:41.640 --> 0:03:44.640 billion dollars, so you know, stock through downs. What can 0:03:44.680 --> 0:03:47.720 the exchange do to prevent that kind of scenario? You're 0:03:47.720 --> 0:03:52.400 talking about the exchanges in China. Well, I think the 0:03:52.480 --> 0:03:57.560 exchanges in China have a very different um problem than 0:03:57.720 --> 0:04:01.040 the rest of US because a large percentage of the 0:04:01.120 --> 0:04:05.120 participant in the domestic market are retail investors. So there's 0:04:05.160 --> 0:04:08.280 a lot of sentiment when people tray on rumors, and 0:04:08.320 --> 0:04:12.800 so that that's what brought about the big swings, and 0:04:12.840 --> 0:04:16.600 the institutional investors in China are not yet well developed. 0:04:17.279 --> 0:04:20.640 So I used to say that the institution investors in 0:04:20.720 --> 0:04:25.240 China behave like big retails. So instead of providing some 0:04:26.240 --> 0:04:29.960 uh anchor to you know, when the market was volatile, 0:04:30.160 --> 0:04:33.479 they join in the volatility and make it even more volatile. 0:04:33.560 --> 0:04:37.160 I think that is certainly an area where the institutional 0:04:37.200 --> 0:04:40.600 investor can improve um and I think that will bring 0:04:40.640 --> 0:04:44.800 stability and more stability to the market domestic market. Thank 0:04:44.800 --> 0:04:49.560 you so much, greatly appreciated. Hong Kong Exchange is their chair. 0:05:03.880 --> 0:05:05.679 This is a joy it out right now to speak 0:05:05.720 --> 0:05:09.960 with a gentleman from Nigeria, Mohammed Barkindos, OPEC Secretary General, 0:05:10.240 --> 0:05:13.400 and in conversation with his entourage as he came onto 0:05:13.400 --> 0:05:17.159 our stage, we talked about the history of nine six 0:05:17.440 --> 0:05:20.039 I think Daniel Jurgen in the prize and all of 0:05:20.040 --> 0:05:23.640 the history of OPEC, and it was a cartel, and 0:05:23.720 --> 0:05:26.920 you collegiately take offense with the idea that it's still 0:05:26.960 --> 0:05:29.800 a cartel. If it's not a cartel in OPEC, what 0:05:30.000 --> 0:05:34.760 is it. Thank you very much for having me, of course, 0:05:35.000 --> 0:05:42.440 and happy New yeah, good to see you guys. Yeah, okay, 0:05:44.800 --> 0:05:47.680 Now you're quite correct. We are no longer a cartel. 0:05:48.440 --> 0:05:55.800 I think we are a free, open, transparent organization what 0:05:56.000 --> 0:05:58.680 some of the you might call a fish bowl in 0:05:58.720 --> 0:06:03.279 the US. We have come a long way. For example, 0:06:04.240 --> 0:06:08.640 asad today, all our data, all our data, which is 0:06:08.680 --> 0:06:16.040 our key raw material, is online from sixty till date. Secondly, 0:06:17.360 --> 0:06:21.120 most of our publication of the key ones monthly oil 0:06:21.200 --> 0:06:28.440 market Report, our annual statistical bulletin, all online, accessible to 0:06:28.600 --> 0:06:35.719 all our meetings are covered by the global media and 0:06:35.760 --> 0:06:41.960 their stream. Most of the time, life were as open 0:06:42.640 --> 0:06:45.640 as any organization that you can think of, and we are. 0:06:45.760 --> 0:06:48.479 We're proud of what we have been able to achieve 0:06:49.960 --> 0:06:54.280 since the eighties, very very transparent with the data. Now, 0:06:54.600 --> 0:06:57.480 admittedly the process is less transparent to make. When someone 0:06:57.520 --> 0:06:59.960 I say here on any given morning and the president 0:07:00.000 --> 0:07:02.839 and sweets about OPEC, it's the president of the elephant 0:07:02.839 --> 0:07:04.839 in the room. Now, the President of the United States, 0:07:04.839 --> 0:07:07.800 is he around that almost? Is he the marginal producer? 0:07:08.080 --> 0:07:13.800 Marginal The President is the biggest producer in the world today, 0:07:15.960 --> 0:07:20.000 and it's logical for him to take more than a 0:07:20.080 --> 0:07:24.600 passing interest in what opic does because of what we 0:07:24.720 --> 0:07:28.520 do or fail to do, affects him, affects his industry 0:07:29.000 --> 0:07:33.920 and by extension, his economy. The last downtown has proven 0:07:33.960 --> 0:07:39.240 beyond an invisible doubt that both OPIC, the United States Ryan, 0:07:39.320 --> 0:07:41.960 the shell producers were all in the same bold trist 0:07:42.480 --> 0:07:44.160 just because of the time. I want to conflate here 0:07:44.200 --> 0:07:46.800 to basic themes in questions. One is the mystery of 0:07:46.880 --> 0:07:50.280 Russia tangential to OPEC, and the other is you've got 0:07:50.280 --> 0:07:52.840 to get to a meeting in Vienna in April. How 0:07:52.880 --> 0:07:56.040 should Russia come to the meeting with OPEC in Vienna 0:07:56.200 --> 0:07:59.800 in April. It's an odd chemistry right now? How that 0:08:00.040 --> 0:08:04.240 chemistry be in April. I think it's been good. So far, 0:08:04.320 --> 0:08:05.960 so good. We have come a long way with our 0:08:06.040 --> 0:08:11.240 Russian friends. OPEC and Russia had instituted an energy dialogue 0:08:11.280 --> 0:08:14.760 as far back as two thousand and six, and during 0:08:14.800 --> 0:08:18.200 this last downturn we have worked together with the Russian 0:08:18.720 --> 0:08:25.720 Federation to reach the historic declaration of cooperation. We also 0:08:25.800 --> 0:08:30.960 went further to implement from January twenties seventeen two last December, 0:08:31.520 --> 0:08:36.520 what we had agreed upon with very high level of performance, 0:08:36.559 --> 0:08:40.160 what we refer to as conformity or what you call compliance. 0:08:41.360 --> 0:08:46.400 The Russians had played a leading role in the entire 0:08:46.480 --> 0:08:50.280 process so far, and I've got it in good authority 0:08:50.640 --> 0:08:54.600 from the Russians. They intend to continue to work with 0:08:54.720 --> 0:08:58.520 us to sustain the balance that we have been able 0:08:58.559 --> 0:09:01.640 to achieve on a sustainable basis, so they still have 0:09:01.640 --> 0:09:04.760 a lap of partner very much. So have you got 0:09:04.760 --> 0:09:08.120 any preliminary guidance sound compliance through the early party January? 0:09:08.120 --> 0:09:10.560 What if he thinks I found the data. We had 0:09:10.679 --> 0:09:15.680 just had our technical meetings in Vienna, bringing a close 0:09:16.679 --> 0:09:21.440 twenty eighteen figures, and we took stock of the implementation 0:09:21.480 --> 0:09:25.760 of the supply adjustments from January twenty seventeen toal date. 0:09:26.400 --> 0:09:29.840 I can tell you that the level of performance was 0:09:29.960 --> 0:09:35.680 well over for both ourselves and the non Opic. We're 0:09:35.800 --> 0:09:39.800 just beginning to implement our decision on the sixth and 0:09:39.880 --> 0:09:44.600 certain of December, so it's so far, so good. We're 0:09:44.600 --> 0:09:48.920 on track to achieve our common objectives. One of the 0:09:49.000 --> 0:09:52.040 rumors here in Davos is OPAC split the polar vortex 0:09:52.080 --> 0:09:55.319 above the Arctic Circle and cause a record called in America. 0:09:55.559 --> 0:10:00.680 Over the last ten days, what we focused on is 0:10:00.720 --> 0:10:06.600 to ensure that inventories that had built up in the 0:10:06.679 --> 0:10:12.560 last downtown too unsustainable levels do not RecA in. You 0:10:12.600 --> 0:10:14.720 have visibility on that right now. I mean we count 0:10:14.720 --> 0:10:17.559 boats of Singapore. But the answer to your visibility on that, 0:10:17.880 --> 0:10:23.840 we are beginning to see very sharp reductions in supply 0:10:24.559 --> 0:10:28.760 in conformity to the supply obligations that we agreed upon 0:10:28.840 --> 0:10:31.439 on the six and seventh of December, and we have 0:10:31.440 --> 0:10:35.440 seen that the market has started to respond positively. We 0:10:35.520 --> 0:10:38.600 have seen the market structure, for example, Brent has just 0:10:38.679 --> 0:10:43.920 flipped into backwardation. And this is just the beginning of 0:10:44.000 --> 0:10:46.520 the month. Mr Kendall, thank you so much for joining 0:10:46.600 --> 0:11:05.960 us to General OPEC this morning. Let's continue the conversation 0:11:06.040 --> 0:11:08.599 here with the chief executive officers that arguably it is 0:11:08.640 --> 0:11:12.800 the single most important executive in America on the emotions 0:11:12.800 --> 0:11:15.480 of the President of the United States. Aren't Sorenson is 0:11:15.520 --> 0:11:18.559 off the fabric of Minnesota out of Minnesota law among 0:11:18.640 --> 0:11:21.720 other things. He is a Marriott CEO, and of course, 0:11:21.800 --> 0:11:23.959 as we all know that uniqueness of being the first 0:11:24.040 --> 0:11:27.240 non Marriotte to be the Marriott CEO. We can talk 0:11:27.280 --> 0:11:30.360 here the summation of your travel rewards into your new 0:11:30.440 --> 0:11:34.960 thing and your building. Hotels, guess what the governments and shutdown. 0:11:35.280 --> 0:11:39.280 Then you're at the absolute crucible of this. I read 0:11:39.320 --> 0:11:42.320 an industry article with you and John Tish about the 0:11:42.360 --> 0:11:47.280 percentage of immigrants that make Marriott go each and every day. 0:11:47.600 --> 0:11:50.719 Give us a percentage number of your employees that can 0:11:50.760 --> 0:11:53.840 relate directly to the national debate. Well, it is. It's 0:11:53.880 --> 0:11:57.439 not uncommon in our full service hotels in our urban 0:11:57.480 --> 0:12:02.320 markets to have fifties, sixties, seventy nation analities represented, all legal. 0:12:02.559 --> 0:12:04.959 By the way, we are very careful. I'm going to 0:12:05.000 --> 0:12:06.880 play the other side of the president says below. Either 0:12:07.000 --> 0:12:10.640 not illegal, The president has illegal immigrants. It is hotels 0:12:10.760 --> 0:12:14.360 is published. How do you know that they're not undocumented. 0:12:14.440 --> 0:12:17.320 We use all the tools available, including e Verify, which 0:12:17.360 --> 0:12:19.559 is provided by the I and S. But we are 0:12:20.559 --> 0:12:24.679 vigilant about the documentation and making sure that these people 0:12:24.760 --> 0:12:27.880 have the right to work in the United States. The challenge, 0:12:27.880 --> 0:12:33.240 of course government shutdown. Why because both political parties believe 0:12:33.280 --> 0:12:37.520 it's more important to leave immigration unresolved than to come 0:12:37.600 --> 0:12:40.000 up with a new consensus. Want to message them today, 0:12:40.000 --> 0:12:42.559 then we'll se message to them today. Get talking. I mean, 0:12:42.559 --> 0:12:44.440 I think the right thing is to get the government 0:12:44.440 --> 0:12:48.000 open and then to get engaged in building a national 0:12:48.000 --> 0:12:51.400 consensus around what fair immigration looks like. Because I think 0:12:51.400 --> 0:12:53.520 if you ask people across the United States, what are 0:12:53.520 --> 0:12:56.319 the rules of immigration? How do they work? People would say, 0:12:56.320 --> 0:12:58.679 I have no idea. Is this confusion right now hurting 0:12:58.679 --> 0:13:01.880 your business? Oh? It? It varies from market to market. Washington, 0:13:01.920 --> 0:13:03.840 of course, we're big. That's our hometown. We have a 0:13:03.880 --> 0:13:06.560 hundred fifty hotels or so in the Greater Washington area. 0:13:07.320 --> 0:13:10.960 Business there is down double digits since the government shutdowns. 0:13:11.000 --> 0:13:13.160 So that's the domestic tension. Let's talk about the international 0:13:13.200 --> 0:13:15.680 tension between the United States and China. You've got a 0:13:15.679 --> 0:13:17.760 decent window into what is happening in the world. Second 0:13:17.800 --> 0:13:20.680 launched economy. How big is the slowdown? Because even a 0:13:20.720 --> 0:13:23.880 company like Apple is really struggling with nit term visibility. 0:13:24.000 --> 0:13:26.200 Do you have good nit term visibility as to what 0:13:26.320 --> 0:13:28.120 is happening in the economy at the moment? Well, we 0:13:28.200 --> 0:13:31.240 know what happened last night or last week. We don't 0:13:31.240 --> 0:13:33.600 necessarily know what's going to happen three months from now. 0:13:33.679 --> 0:13:36.360 So if if you're asking that our ability to predict 0:13:36.400 --> 0:13:41.080 that's more difficult. There are there are differences. Obviously, the negatives, 0:13:41.240 --> 0:13:44.880 there's a trade war, the Chinese economy is under pressure 0:13:44.880 --> 0:13:47.880 because of it. The positive, the Chinese are trying to 0:13:47.880 --> 0:13:50.640 move towards more of a consumer economy. We are in 0:13:50.679 --> 0:13:55.480 the consumer space, so Chinese travelers within China and abroad. 0:13:56.400 --> 0:13:59.000 Chinese traveling abroad, we think is continuing to grow up, 0:14:00.120 --> 0:14:03.120 even with a weaker And they're all staying at Marriott, 0:14:03.120 --> 0:14:05.120 and no doubt I'm kidding. I don't know if you've 0:14:05.120 --> 0:14:10.120 been at the Marriott in Tulsa two e seventy one Street, Tulsa, Oklahoma. 0:14:10.520 --> 0:14:14.120 There are workers there for you who are directly affected 0:14:14.160 --> 0:14:17.960 by the shutdown, directly affected by the debate over immigration, 0:14:18.240 --> 0:14:21.480 and they've got a real job at Marriott. How does 0:14:21.520 --> 0:14:25.360 America have confidence that they will advance and prosper in 0:14:25.400 --> 0:14:28.440 the coming years. How do we as a nation get 0:14:28.480 --> 0:14:32.560 behind employers like you with these first Americans? It's all 0:14:32.600 --> 0:14:36.720 about jobs. You look at how benefited medical jobs you 0:14:36.800 --> 0:14:39.600 people will see have medical plans. All the full time 0:14:39.600 --> 0:14:42.120 folks have healthcare. Yeah, I mean they some of them 0:14:42.160 --> 0:14:45.160 have it under their spouses. And so I shouldn't say, 0:14:45.840 --> 0:14:49.320 but I think our participation rate even in retirement our 0:14:49.360 --> 0:14:54.280 participation rate is because we think it's important to build, 0:14:55.040 --> 0:14:57.040 of course, to coin and sate people fairly, but to 0:14:57.160 --> 0:15:00.400 build careers for people where they can say I can 0:15:00.480 --> 0:15:03.880 work not only last month or this month in one 0:15:03.880 --> 0:15:05.920 of your hotels, but I can build my career. I 0:15:05.920 --> 0:15:08.560 can put my kids through school, I'm gonna have a house, 0:15:09.120 --> 0:15:12.000 I can I can grow in the way I want 0:15:12.040 --> 0:15:14.080 to grow. And that's what the company has been about 0:15:14.080 --> 0:15:16.800 for decades. In some ways, Over the last couple of 0:15:16.800 --> 0:15:18.800 months or so, the company has been about managing a 0:15:18.840 --> 0:15:21.800 crisis around the hacking. What's the latest on that. Have 0:15:21.840 --> 0:15:23.880 you got any idea who was behind it and what 0:15:23.960 --> 0:15:26.320 the objectives were? I don't know that we'll ever know 0:15:26.400 --> 0:15:30.360 who was behind it. We know we know that somebody 0:15:30.440 --> 0:15:33.400 was in Star Wars reservation system for a few years. 0:15:34.080 --> 0:15:37.120 Of course, we did not find that out during the diligence. 0:15:37.120 --> 0:15:39.240 We don't think Starwood knew that before I saw the 0:15:39.240 --> 0:15:42.040 company to us, and this was something that was discovered 0:15:42.040 --> 0:15:45.560 in the fall of We moved as quickly as we 0:15:45.640 --> 0:15:48.920 could to do two things. Want to be transparent that 0:15:49.200 --> 0:15:51.320 what we knew we had to share with everybody else. 0:15:51.720 --> 0:15:53.920 And second, to find out as much as we could 0:15:53.960 --> 0:15:56.840 find out. Do you know I found out about the hacking. 0:15:57.320 --> 0:15:59.840 I had ten nights at the Ritz Carlton and Atlanta. 0:16:00.120 --> 0:16:02.400 All of a sudden shot up on my Marriott rewards. 0:16:02.680 --> 0:16:06.160 Where did this come from? Everybody was affected? Right, Well, 0:16:06.200 --> 0:16:10.360 I don't know that that's connected. Let me ask this 0:16:10.400 --> 0:16:12.840 because this is an important question. Actually, do we have 0:16:13.320 --> 0:16:17.080 firm wid protocols for when a passport gets scanned in 0:16:17.160 --> 0:16:21.680 a Marriott hotel that is now encrypted? Well? Uh, the 0:16:21.720 --> 0:16:23.720 answer is we're getting there as quickly as we can. 0:16:24.120 --> 0:16:25.920 U a couple of I want to say, a couple 0:16:25.920 --> 0:16:30.000 of comparison assports. So by the beginning of January, we 0:16:31.080 --> 0:16:34.640 determined as best we can that none of the payment 0:16:34.640 --> 0:16:38.960 card information was unencrypted, which is obviously a very good thing. 0:16:39.680 --> 0:16:43.440 We determine that about five million global passports, that is 0:16:43.520 --> 0:16:47.120 from Chinese travelers, American traveling, European travelers, about five million 0:16:47.560 --> 0:16:50.800 were unencrypted. So that's where the that's where the concern 0:16:50.880 --> 0:16:55.960 comes from. There is a debate. The U State Department says, 0:16:56.000 --> 0:16:58.600 don't worry about it, don't replace your passport. A passport 0:16:58.680 --> 0:17:02.000 number without the passport is worth nothing. But there are 0:17:02.120 --> 0:17:04.840 others who reasonably say we'll wait a second, that's my 0:17:04.880 --> 0:17:09.639 passport number. I feel violated somehow by that. What you know, 0:17:09.680 --> 0:17:11.960 what are the consequences of that? And I think for 0:17:12.040 --> 0:17:14.399 us long term, we've got to make sure that everything 0:17:14.480 --> 0:17:17.240 is encrypted. We've also got to make sure we comply 0:17:17.320 --> 0:17:20.879 with local law. So for anybody who travels abroad in 0:17:20.960 --> 0:17:24.919 many countries around the world, were required to take your passport, 0:17:25.720 --> 0:17:30.440 maybe make a physical copy of that passport, and encrypting 0:17:30.680 --> 0:17:36.200 a xerox copy is not necessarily the leading edge of technology. 0:17:36.560 --> 0:17:39.560 I want one final question. If James Diamond was sitting here, 0:17:39.600 --> 0:17:41.520 I'd ask him, as he too big as a bank, 0:17:41.600 --> 0:17:45.119 the question every day has to be his Marriott become 0:17:45.160 --> 0:17:47.919 too big with all the mergers, the scope to scale, 0:17:47.960 --> 0:17:51.879 the new rewards messing that you're doing. How do you 0:17:51.960 --> 0:17:54.480 respond to the idea of Marriott's become too big for 0:17:54.480 --> 0:17:56.159 the industry? Well, I think it's I think it's a 0:17:56.160 --> 0:17:58.520 crazy idea. I don't know that, but but but we 0:17:58.800 --> 0:18:02.680 are out seven to eight percent of the hotel rooms 0:18:02.680 --> 0:18:09.000 in the world. Seven to eight It's hardly a massive share. 0:18:09.480 --> 0:18:11.479 And by the way, about half of those rooms are 0:18:11.560 --> 0:18:14.600 run by our franchise. Is we don't even price them interesting, 0:18:14.920 --> 0:18:18.320 so it is still a highly competitive business. And what 0:18:18.359 --> 0:18:21.600 customers are italian Us is they want to be able 0:18:21.680 --> 0:18:24.400 to stay with us wherever they're going, and they're going 0:18:24.520 --> 0:18:27.320 lots of different places and lots of different purposes of 0:18:27.359 --> 0:18:30.359 their trips. Sometimes they want luxury, sometimes they don't, and 0:18:30.400 --> 0:18:33.639 we want to be there for you. Mr Thomason. Always 0:18:33.640 --> 0:18:35.480 got to catch up with you. Thank you very much 0:18:35.480 --> 0:18:50.520 for dropping by. Earlier on I caught up with the 0:18:50.560 --> 0:18:53.639 Saudi Aramco CEO. I'm in NASA speaking to me about 0:18:53.640 --> 0:18:57.480 plans for a takeover of the big Saudi petrochemical John Sabag. 0:18:57.720 --> 0:19:00.879 Take a listen to what he had to say. We 0:19:00.960 --> 0:19:04.480 are in discussion currently with the Public Investment Fund about 0:19:04.480 --> 0:19:10.800 the acquisition of seventy of the share of Serbic. We 0:19:10.840 --> 0:19:13.280 are in discussion with regard to the price that that 0:19:13.400 --> 0:19:16.160 the stage. Do we have a ballpark figure of where 0:19:16.160 --> 0:19:18.679 the price will be, not yet. I'm hearing numbers of 0:19:18.720 --> 0:19:21.920 in and around sixty billion. Is that a ballpark figure. 0:19:22.880 --> 0:19:25.639 I'm not going to comment enter price because you know, 0:19:25.760 --> 0:19:31.040 you understand this is very critical at this stage to 0:19:31.080 --> 0:19:36.639 will be to keep silent about the negotiation that's currently 0:19:36.640 --> 0:19:40.200 ongoing with public Investment fund. Well, the Energy Minister has 0:19:40.240 --> 0:19:44.080 not been silent about the financing of this acquisition. He's 0:19:44.119 --> 0:19:47.040 looking at a potential bond issuance coming up maybe in 0:19:47.040 --> 0:19:49.240 the second quarter. Could you comment on that. The financing 0:19:49.600 --> 0:19:53.119 of the potential acquisition, we are exploring. You know, we 0:19:53.200 --> 0:19:57.760 have a significant capital program. To sustain that capital program 0:19:57.880 --> 0:20:03.960 and also considering the acquisition, the potential acquisition of the 0:20:04.000 --> 0:20:09.320 stake in Cybo, are blowing all options for funding. One 0:20:09.359 --> 0:20:12.760 of it is a bond issuance and that is something 0:20:12.800 --> 0:20:15.040 that we're looking at. Let's talk about the science of 0:20:15.040 --> 0:20:17.040 the bonds, how much could potentially come to market and 0:20:17.040 --> 0:20:20.280 the potential duration of them. Well, we are at the 0:20:20.359 --> 0:20:22.879 stage we are, as I said, we are evaluating. We 0:20:22.960 --> 0:20:27.560 are when to decide soon exactly how much we would 0:20:27.640 --> 0:20:32.200 like to take from the bond market. And so it 0:20:32.320 --> 0:20:35.320 has not decided yet in terms of how much we 0:20:35.320 --> 0:20:37.560 would like to do. You know what your intentions are 0:20:37.600 --> 0:20:42.480 with the other The thirty percent is of Serbecum del 0:20:42.520 --> 0:20:48.080 Conte and well it is publicly listed company is listed 0:20:48.119 --> 0:20:50.280 in the market as the regulator giving you a waiver 0:20:50.560 --> 0:20:52.680 whereby you don't actually have to buy the thirty percent, 0:20:52.720 --> 0:20:56.120 Can you just buy the sevent We are in discussion 0:20:56.520 --> 0:20:59.119 right now with Public Investment Fund first of all, about 0:20:59.160 --> 0:21:03.439 the acquisition of the seventy percent, and the issue whether 0:21:03.720 --> 0:21:06.760 we need to or not is in discussion. With this 0:21:06.840 --> 0:21:09.240 you may with regard to that, have you had any 0:21:09.280 --> 0:21:13.639 preliminary guidance on that at all. Our intention is not 0:21:13.720 --> 0:21:17.600 to acquire anything from the public with regard to PENT 0:21:17.680 --> 0:21:19.760 of this stage. So if you're told that you would 0:21:19.760 --> 0:21:22.080 have to also acquire the thirty percent, it would actually 0:21:22.080 --> 0:21:24.600 be a deal breaker for you, guys well, as I say, 0:21:24.640 --> 0:21:27.880 this is something right now is in discussion, and there's 0:21:27.920 --> 0:21:30.520 no intention to acquire the thirty percent from the public. 0:21:30.640 --> 0:21:35.080 Our intention and our strategy is to acquire the seventy 0:21:35.080 --> 0:21:39.200 percent stake in with the Public Investment Fund. There's all 0:21:39.240 --> 0:21:42.960 the discussion is about the seventy We have no intention 0:21:43.520 --> 0:21:46.760 of acquiring the percent listed in the market. So the 0:21:46.760 --> 0:21:48.800 guidance we've had from the Energy Minister is that for 0:21:48.920 --> 0:21:51.080 the seventy percent, you will come to market, you will 0:21:51.160 --> 0:21:54.320 issue some debt later this year, perhaps in the second quarter. 0:21:54.480 --> 0:21:55.960 The guidance we've also had is that it will be 0:21:56.000 --> 0:21:58.399 an international bond. Now that's going to come with some 0:21:58.440 --> 0:22:01.679 financial disclosures. Are you prepared to disclose some of the financials? 0:22:01.920 --> 0:22:05.639 Definitely is going to be international bond. We're currently in 0:22:06.119 --> 0:22:14.280 discussion with with regard to how much and were and 0:22:14.359 --> 0:22:19.960 all of that issuance for the bonds, and everything is 0:22:20.000 --> 0:22:25.679 going well in terms of h anything that is required 0:22:25.680 --> 0:22:30.199 by the regalitis, in terms of disclosures, in terms of 0:22:30.560 --> 0:22:35.679 financial disclosures or any type of disclosure required by the 0:22:35.760 --> 0:22:40.199 issuance market, we will comply. Well, let's talk about the 0:22:40.200 --> 0:22:42.199 potential for disclosures because some of the reporting we have 0:22:42.280 --> 0:22:45.280 done has shown that Sammy Ramco's books have basically got 0:22:45.359 --> 0:22:48.160 zero debt and you're one of the most profitable companies 0:22:48.160 --> 0:22:51.080 on the planet. When you disclose to issue this bond, 0:22:51.560 --> 0:22:53.439 is that what you're going to reveal essentially that you 0:22:53.480 --> 0:22:55.320 have no debt on the book, so that you are 0:22:55.359 --> 0:23:00.920 incredibly profitable. We will reveal our balance sheets and any 0:23:00.920 --> 0:23:03.320 it's not you know, we have jvs. They have they 0:23:03.359 --> 0:23:06.000 have did in the market, they have project financing that 0:23:06.119 --> 0:23:10.800 so it's not when we uh disclosure, will disclose the 0:23:10.840 --> 0:23:13.399 whole around Cole and all of our DV in the 0:23:13.480 --> 0:23:15.920 Kingdom and out of the Kingdom some of them went 0:23:15.960 --> 0:23:18.560 to their dead market. So all the data with regard 0:23:18.600 --> 0:23:22.639 to the gearing ratio of Saudia around Cole will be shaped. 0:23:22.760 --> 0:23:25.000 Let's talk about the potential for pricing. The Kingdom came 0:23:25.040 --> 0:23:27.800 to the market quite recently ten year money a hundred 0:23:27.840 --> 0:23:30.479 seventy five basis points at the treasuries. Do you think 0:23:30.520 --> 0:23:33.359 when a ramco comes to market, actually spreads will be 0:23:33.400 --> 0:23:37.360 tighter for Sara a Ramco. That will be decided by 0:23:37.400 --> 0:23:41.560 the market when we go and seek the wants. But 0:23:41.720 --> 0:23:44.080 I think our round compositions around Cole is a very 0:23:44.480 --> 0:23:48.000 successful company. We have great results in two thousand and 0:23:48.160 --> 0:23:51.080 eighteen and our history and our track record in terms 0:23:51.119 --> 0:23:55.800 of performance, I think, well, when we share all of 0:23:55.840 --> 0:23:59.439 that information in in addition to the disclosure, yeah, the 0:23:59.480 --> 0:24:05.480 market will decide and we have to agree on ahead 0:24:05.480 --> 0:24:07.000 of that. You might have to talk to a credit 0:24:07.080 --> 0:24:09.159 rights and agency. You speaking to the credit writing agency 0:24:09.280 --> 0:24:13.879 right now? We have we did engage a credit rating agencies. 0:24:13.880 --> 0:24:15.960 So if we have all of the information required, are 0:24:16.000 --> 0:24:17.720 you going to have a better credit writing agency than 0:24:17.760 --> 0:24:20.520 the Kingdom? Well, we are, as I said, we are 0:24:20.560 --> 0:24:25.879 maintaining the Kingdom softeign credit ratings and what event we 0:24:25.960 --> 0:24:28.680 have from the other rating agencies we will be shaping 0:24:28.760 --> 0:24:32.879 when we go with the disclosure. The CEO of sari 0:24:32.920 --> 0:24:35.080 Aramco there am in NASA speaking to me a little 0:24:35.080 --> 0:24:51.520 bit earlier on if this is with our question our 0:24:51.680 --> 0:24:56.360 interview of Davos on this issue of Brexit. For those 0:24:56.359 --> 0:25:00.080 of us foreign it is baffeding in his extraordinary is 0:25:00.080 --> 0:25:03.840 a modest journalist at the Evening Standard, wandered by Mr 0:25:03.880 --> 0:25:07.800 Cameron's government to be chancelled the Exchequer, but far more 0:25:07.920 --> 0:25:11.320 importantly to us to care about design. He is an 0:25:11.320 --> 0:25:16.040 Osborne of Osborne in a little Definitive and Design. What 0:25:16.160 --> 0:25:19.399 was it like in your childhood bedroom? Did they change 0:25:19.400 --> 0:25:22.600 the wallpaper every ninety days? Well, my dad set up 0:25:22.640 --> 0:25:25.879 Osborne Little of design company and yeah, well you know, 0:25:25.920 --> 0:25:28.320 we had to showcase the product and there were always 0:25:28.320 --> 0:25:30.359 new collections and said the house was always big. Read 0:25:30.760 --> 0:25:33.040 you'd like to warpaper and they came in they said, no, 0:25:33.240 --> 0:25:36.919