00:00Yesterday, President Trump saying Iran needs to be very worried.
00:03How dangerous do you think the situation is right now?
00:06I think it's de-escalating to a certain level, and I think it is for the benefit of the region
00:10for Iran to lose its nuclear program.
00:13So I don't see this progress as a negative per se, but the execution risk is there.
00:19So talks have moved from being in Turkey to Oman right now, but will it yield anything
00:24meaningful and will that mean something meaningful for the public of Iran is a question that
00:27Do you really believe that there's going to be a deal done though?
00:30Because most people I talk to are very skeptical.
00:32Look, let's define what a deal looks like, and let's not forget that almost a decade back,
00:37almost a decade back, there was a deal called JCPOA, Joint Plan of Comprehensible of Action,
00:43and that was ripped apart.
00:44So if this is going to be some sort of a renewed JCPOA that has Iran's uranium management program
00:49under control, that is a positive for the region.
00:52Now how you execute that is the question that no one has an answer to right now.
00:57But I think conversations, Joanna, are better than non-conversations, so there is a series
01:03of talks that are going forward right now, and let's see how that plays out.
01:06But if it plays out in the way that Trump administration hopes to, it's a net benefit for the region.
01:11Okay.
01:12Interesting.
01:13So it's sort of a positive spin on it versus the other people that I've been speaking to.
01:17But at the same time, if you look at the main risk indicator, we look at oil, and the
01:22reason there's so much geopolitical premium right now in oil is because of the Iran premium.
01:26Do you think that where we are right now is reflective of some of the risks?
01:32Look, vis-a-vis commodity prices, base metals, precious metals, AI stocks, stocks in general,
01:39the reality is that investors are finding it challenging to price all of the collective
01:43risks that we are looking at right now with this current macro backdrop.
01:46So Iran and the conversations around Iran, the reason why I'm putting a positive spin is
01:51that having a conversation to de-escalate the situation is a positive in my view.
01:55Now, it doesn't take away from the fact that we're going to have to deal with a number of
01:59different cases around the world.
02:00Oil markets are going to be basically quite susceptible to shocks around geopolitics, as
02:07was the case in Venezuela, as it is now in Iran, and potentially what happens in Russia, Ukraine,
02:12you know, going forward.
02:13And so to me, it's not a short-term negative, provided that the conversations yield something
02:20that is tangible.
02:21You know, when we talk about geopolitical risks, it's always in the context of something negative
02:26happening.
02:27But what about pricing in a positive tail risk?
02:29So a positive outcome for Iran, an actual resolution to the Ukraine-Russia talks that
02:36are taking place, by the way, here in the UAE?
02:39I mean, perhaps investors are not thinking about the positive outcomes that could be yielded
02:43as well.
02:44There's so much noise in the market that it's very difficult to focus on the positive just
02:48because we have to price a broader set of risks as investors, which we are finding challenging
02:52to do across the board.
02:54Having said that, from a geopolitical stance, I think Russia-Ukraine is a much more
02:58challenging issue to overcome, whereas if a deal gets agreed with Iran, again, it's
03:04an if, it's an assumption, it will be beneficial for GCC, for capital coming into the GCC.
03:10So I see the conversations as a positive.
03:12Again, we'll see what it yields.
03:14I think Russia-Ukraine is more challenging, though.
03:16Yeah, it is.
03:17It is for sure.
03:18And it's been going on for four years now, which is shocking to me.
03:22Let's just take a step back and look at the markets because you have the geopolitics,
03:27a lot of headlines coming through from geopolitics.
03:29But actually, the big market driver the last couple of days has been this route that we've
03:34been talking about in tech.
03:35About $1 trillion worth of market cap has been wiped off the market.
03:39Perhaps that is the bigger risk for investors looking ahead and the hype around a lot of
03:45these stocks that people were really excited about last year.
03:47Look, have you noticed and we have all noticed effectively that our reaction, the investor
03:53reaction to news, especially adverse news, is way more significant and volatile or vicious
04:02than it really needs to be.
04:03And I think there are a number of reasons for that.
04:05And one of which is going to be the escalating cost of debt, long-term debt in particular,
04:10what it means for cost of debt, cost of capital.
04:12So investors trying to understand, for example, we talked about the Alphabet, the CapEx investments,
04:18$185 billion whatever dollars.
04:21Actually, if they can fund it, this should be a positive.
04:25The question is, can they fund it?
04:26If they're going to go to the debt markets, what does it mean?
04:28Well, they're sitting on a cash file of $120 billion.
04:31So in that case, you have to look at the numbers.
04:34It's different for, say, the likes of Oracle, for example.
04:37Absolutely.
04:38So can investors differentiate?
04:40They should.
04:41But market reaction is also about the momentum trade.
04:45And it is driven by fear more than hope, as it generally is.
04:48One thing I will say, Jumana, though, I think we need to watch the Japanese debt auctions more carefully.
04:54I mean, they just came out with a 30-year, which actually went better than people thought it would.
04:58But still, the yields remain elevated.
05:00They will continue to remain elevated, which, again, to my mind means that investors will have to take a look at what the cost of capital will be for certain companies and price them accordingly.
05:11The problem is we're not going to be in any shortage of news flow coming our way.
05:16Our reaction to these sales of news flows can't be so volatile.
05:20That's the issue.
05:21So where do you put your money, in defensives, in value, in safe havens?
05:25I think it's a portfolio.
05:26And the real answer to that question is invest in things that you do understand to a certain extent.
05:32But I think in a market like this, with a backdrop like this, I mean, am I going to bet on AI?
05:36Yes, I'm going to bet on AI, because I think our society is going to need more of this.
05:40Am I going to bet on data centers?
05:41Yes, I will.
05:42But if I'm betting on these things, I also want to bet on the energy infrastructure of these things.
05:47Yeah.
05:48So focusing on areas that will complement this.
05:51But then there are fundamental, more thematic areas like water security, food security,
05:56that also, I think, are areas that we will have to talk about going forward.
05:59So it's a basket case.
06:00It's a basket case.
06:01It's a basket case.
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