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tv   On the Move With Rishaad Salamat  Bloomberg  December 22, 2013 8:00pm-10:01pm EST

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>> good morning, everybody. i am rishaad salamat. this is "on the move." a breakthrough for apple in china. we are watching the suppliers with taiwan markets about to get underway. bowing to shut down thailand and block elections. antigovernment groups renew protests in bangkok. fallenck market that has nearly everyday this month. the issues that faced shanghai. we are going to get taiwanese markets starting.
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we don't have trading in tokyo. it is the emperor's birthday. john, good morning. >> japan is closed or the emperor's birthday today. china stocks are gaining. apple as well and also foxconn part of that. japan is closed. u.s. gdp better than forecast. more details on what is happening as far as asia-pacific stocks. let's get back to our top stories. apple finally signing a long- awaited deal to get iphones sold through china mobile. stephen engle is our china correspondent and he is in beijing. this is a long time coming. it is a pretty significant deal as well. x years -- six years worth of negotiation coming to fruition. accessll give apple to -- access to customers on china's biggest wireless at
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work. china telecom corp. the china apple have been offering since about 2009. telecom has offered it since march of last year. the big stumbling block for apple and china mobile has been mobile's insistence to have apple make a handset that could be used on the homegrown technology that china mobile was forced by authorities to use. 3g network. no other carriers globally have adopted china's own homegrown platforms and apple had resisted up until now. china mobile always the big prize for apple. it has 760 million wireless subscribers, 62% of china's total users. apple has seen its share in the chinese market dwindle.
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it is number six right now. cheaper models from samsung, lenovo, xiao mei and other domestic players have outsold the more expensive iphones. iphones are more expensive and they are higher-margin. they attract a higher end-user. mobile, this is important. it removes the competitive disadvantage that it had in drawing those high-end subscribers. its first annual profit decline in at least a decade. this could give a boost on those higher-margin iphones. in a note earlier this month on the impending deal, this deal is potentially negative for china unicom and positive for china mobile as existing iphone customers of unicom and telecom possibly migrate over to china mobile. they are unlikely to renew their contract at expiry. we also heard from china mobile
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that it will offer four g in 16 cities by the end of this year. it has gone from beyond trial to commercial rollout in more cities by the first quarter of next year. >> thanks, steve. this deal could actually be very good news for apple's bottom line. will that boost earnings? let's get more as we get over to tim in taiwan. you have been conducting research on what apple means for its suppliers. >> the interesting thing that we found is the companies that have the highest proportion of their own revenue exposed to apple, where apple is the largest in many cases of a company's revenue comes from apple, those companies, their shares fell this year. they fell significantly.
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they have very large exposure to apple and their shares have fallen quite a lot this year. apple itself, their stock hasn't done fantastically this year but outperformed other companies. what we have seen is the idea that having apple as your client hasn't necessarily paid off for those companies. certainly for the people that have had long positions on those stocks this year. consideredpple was the golden client? the customer everyone wanted? things have changed. what has changed? >> you are right. it was the goose that laid the golden egg for many companies. a lot of companies have fought very hard to get into the apple supply chain. the reason for that is pretty straightforward -- apple is really competitive on margins. that because they
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come out with one phone a year on average, and it is pretty much a set model, not too many tweaks or combinations of it as opposed to samsung or htc, you get that order, you have got massive volume, incredible growth coming in. in the tech industry, volume is king. that is where you get your private from. if you're just doing a few devices, you can't get a lot of profitability. if you are making components for apple and you get that growth coming you can make a lot of money. that is the way it worked before. butnue at apple is slowing not growing at the same clip that it used to. if you look at a chart of the revenue growth of apple in the last six-eight quarters, it is falling off. it is more than the year before. that growth is what the suppliers have been betting on, making sure they can still get higher growth quarter by quarter, year by year, that is falling off. it means that investors are not
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as keen on the companies that were very big with big exposure to apple as they might have been a few years ago. atght, let's take a look the other stories out there. softbank recently bought sprint. it could be pursuing another u.s. phone company. sources say the chief executive has spoken to a number of banks about dying majority stake in t- mobile. the hyundai group planning to sell assets and it is doing so to boost its cash reserve. the car business is going to remain intact. they will be selling off three financial companies and also restructuring some shipping operations too. the group will focus on shipping logistics and machinery distance for -- business for further growth.
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a quick check on the shares, securitieschant and just moving to the upside. merchant up nearly 15%. john mentioned this before, the imf. it is growing more bullish on the u.s.. it is more optimistic about the recovery there. christine lagarde said last week's budget in washington and the fed decision to stop whining -- start winding back stimulus ease doubts about the future. >> we see the fed having taken some very well communicated action concerning the tapering of their program. those are good signs. in addition to which, we see some good numbers. growth is picking up and unemployment is going down. all of that gives us a much stronger outlook for 2014 which brings us to raising our forecast. marketsxt, asia's giving investors a bumpy ride. we will look into 2014 next. ♪
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>> let's look into what is happening as far as trading goes. in japan, the emperor's 80th birthday meaning that markets are closed. kospi is up. the australian market also up here as well. --wan, singapore, malaysia higher. prospects for the mama session as well, futures for india are indicating a gain. we did see a friday nifty close of 1.75% to the upside. we are starting off this curtailed week with gains. joining us is steve goldman. thank for joining us.
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let's start off with the year that is about to conyers. -- end. what do you think will continue into next year? >> i think for me, the biggest surprise was the strength of equity markets. 2014 repeat what we have seen in 2013i think will be the big challenge. it is hard to see how equity markets and risk markets in general can rally to the extent they did in 2013. 53% or thereabouts. that is probably not going to happen again next year. i guess it is going to be the real litmus test for abenomics, what happens in japan and whether we actually begin to see proper growth -- profit growth to ming through. also, wages going up and a bit of self -- a bit of inflation which is sustained. >> in japan, you have a lot of optimism surrounding the fiscal
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and monetary plans that came through. i think level central banks continue -- global central banks continue to provide liquidity and you saw risk markets respond to that. i think 2014 at least from the u.s. perspective, you're going to see a little bit of curtailing of that liquidity. to whatbe a question of extent the markets are already pricing that in versus to what extent the central banks are still going to want to force investors to move back into risk markets. >> that is going to be key too. stimulus gradually being eased and the normalization of monetary policy. today too. look, what i would say is that global growth story seems to be on a slow recovery
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pattern. central banks are going to continue to promote that liquidity. you are going to have some troubles like in europe in 2014 and the question is, will markets respond like they did in 2013. like i said earlier, i think it is going to be more of a challenge in .14 because a lot of the good story has already been priced into some markets. >> where you are at the moment, what is the vibe you are getting for next year? you have the reserve bank looking like it has the wiggle room to cut interest rates further. it is an economy which is a bit fragile. >> it is. there is going to be a transition from that mining investment or service sector and manufacturing. the challenge for australia has been the strength of the currency. that transition needs to happen at a much weaker exchange rate. we have seen the weakening of the aussie dollar toward the end
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of the year especially now when the fed is beginning their tapering program. i think a lot of the story for australia in 2014 is going to be the currency. how weak it gets as opposed to the u.s. dollar and to what extent the economy can transition towards service and manufacturing. >> when you talk about mining, it is a reflection of what is going on in china as well. it is not going to have a hard landing or anything like that, most people say. what will happen when it comes to equities? we have had four years of declining equity markets there. the challenge for china has always been that they have too many companies producing exports . the competition is tremendous. you are seeing good growth. you are seeing the chinese government probably accomplishing its goal of continuing to move people out of
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the agricultural sector into manufacturing. fact is that corporate profitability in china really isn't that good because there is so much cap edition. you expect that to change in 2014. i would say probably not. the main goal for china is to continue growth by pulling people out of farming and into manufacturing. in the end, china is very competitive. stillate profitability really isn't that good. i am not sure you're going to see a significant change in 2014. that is not to say there aren't good companies in china. there definitely are. there is still a lot of excesses that need to be pushed out. >> steve, had a great christmas. this promises to be a quiet week in the run-up to christmas. there are some stories on the agenda. report orsent us this
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new york. mondaying ahead to trading on wall street, it will be a much shortened week because of the holiday and volume will be lower as a result. we kick off the week on monday with the latest data on u.s. personal spending which analysts say likely accelerated. on tuesday, the latest data on new home sales and durable goods orders which were expected to climb. on thursday, we get initial jobless claims. all exchanges will be closed wednesday to observe the christmas holiday. washington will also be scaled down throughout the week. congress in recess and the supreme court on official break. president obama will also be out of town for the holiday. he gave an optimistic outlook on the economy in the new year. pressnal press on 7 -- conference of the year before heading on vacation. >> .14 can be a breakthrough year for america. outlined in detail earlier
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this month, we know there is a lot more we have to do to restore opportunity and broad- based growth for every american. that is going to require some action. >> since winning the white house in 2008, the first family has vacationed in the president's native hawaii which is where he will be this week. -- the airnt and his force flies in about 22 vehicles so the president and golf, attend a basketball game at his alma mater and visit his favorite restaurants. >> up next, thailand's opposition ramping up the rhetoric as it vows to drive yingluck from power. the latest on those protests in bangkok coming up. ♪
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>> hong kong and shanghai getting underway. just a minute away -- eight minutes away. hang seng futures up 0.3%. the premarket ending its auctions high. china mobile gaining as well 1.3% as it inks a deal with apple to sell the iphone. turning to events in thailand where antigovernment protesters have stepped up pressure on the government. they are vowing to continue their campaign to drive the prime minister from office. the opposition says it will
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boycott the upcoming elections. let's get the latest from our south east asia correspondent. to theseof an end bangkok protests. >> no end insight, not for the moment. pressure is building with a prolonged protest and the boycott. the government is expecting up to 70,000 protesters today in various sites in bangkok. at their peak, there were 200,000 key ministries disrupted and the government was forced to dissolve parliament on december 9. here is what prime minister yingluck shinawatra had to say. it is regretful the democrats decided not to take part in the election. she says the democrats' aim is political reform. that can't be achieved without the polls. as prime minister agree to use live ammunition in 2010, they closed the alliance with a protest movement which is
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spearheaded by someone who could be tried for treason if the government so chooses. to preventpledged the vote from going ahead. it is important to note that yingluck was democratically elected and the democrats have lost every national election over the past two decades. they have struggled to win support especially from the rural areas. yingluck retains a huge base. electionappens to the given this boycott by the democrats? will they go ahead with it? ahead.elections will go yingluck said the vote will go ahead as planned and must be held within 60 days after parliament is dissolved. parliament as we said earlier was dissolved on december 9. after the democrats resigned en masse to join the demonstration. based on preliminary talks, 45
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parties are ready to participate. i want to show you how the markets have responded. the bank -- and marked down about 8%. the world's second worst performer in that time after the philippines. the baht continues to weaken. it was pushed to down by the protests and the fed tapering. no surprise that investors are nervous even though demonstrations are not new in thailand. investors just want more clarity. now let's check in with the headlines around the world. has charged 13 people in connection with a fatal fire at a garment factory november last year. 112 workers died in the blaze. officers say the emergency exits were locked. -- the website says many
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executives may have fled the country. mikhail khodorkovsky has vowed to campaign for political prisoners in russia after he was released by president vladimir putin. he spoke at checkpoint charlie in berlin. he said he would not fund opposition parties in his homeland. he has friends who are still in prison including his former business partner. on the international space station have successfully removed a faulty cooling pump which completes the task well ahead of schedule. it means that only two may be needed rather than the three originally planned. it forced the crew to turn off all nonessential equipment and hold scientific research. china's lunar lander and rover have spent the weekend taking pictures of each other. it is before they resumed their exploration of the moon's serpas. they reached the moon on the 14th of december. the rover will spend the next three months looking for natural
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resources while the lender will serve as a landing site over the next year. let's tell you what we have got coming up after the break. we check in with the markets. blackberry continues its hemorrhaging of cash. it is trying to turn the corner and it is hoping that a deal with foxconn will help. details on this deal coming up and indeed also getting a look at the reaction for foxconn shares in taipei. in hong kong and shanghai in about three minutes. we have numbers coming up with futures indicating positivity. ♪
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>> the world's biggest mobile operator striking a chord with apple. after declines, shanghai is aiming to avoid its worst run since 1991. the casino industry betting on a happy new year in japan. we will hear from sheldon adelson. we are getting hong kong started off and shanghai as well coming into the mix. expected as we head towards christmas. what are we seeing? >> a fairly upbeat tone from the u.s.
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better thanr gdp forecast and the imf quite bullish on the u.s. growth because of three things, the fed tapering, the communication being very well received. number two, the jobs are consistently declining. number three, the budget, no impasse, no shutdown. you have shanghai compass it -- composite braking declines today. rising. keepwell your eyes on china mobile and china unicom and china telecom. this after the apple story with china mobile today. china mobile shares rising 1.5%.
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china mobile accounts for -- watch out for those shares in the u.s. open. the biggest supplier to walmart, shopping is a great big part of christmas. shares are largely lower. volumes are very low. japan today is shut for the emperor's birthday. we have market volumes low because of the u.s. story again. tomorrow is a half day in china and hong kong. one of the best-performing stocks on this monday morning is because of apple. >> those markets there in china getting underway, the main concern of investors today is this deepening cash shortage. david is here with the latest. >> it is those interbank lending
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rates, whatever you want to call it. we are just getting underway. you saw john showing a little bit of gains at the open on shanghai, the shanghai composite. perhaps a good sign is that earlier on, we saw borrowing costs have come down at the start. we are at 5.5% for this one week benchmark. we are not seeing a lot of movement but it is still very early. this is what happened yesterday at the session. friday, you see that on your screen. we started the day lower and as we moved through the session, that quickly went up. let's see if this holds at 5.5%. the market is not exactly in good spirits. we were at nine days of losses on friday. -- shanghai composite
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>> it is ridiculous the way this market has performed this year. so what is the view of what is going on with these rates? >> i think it is good to get a view of the three biggest brokerages in china. they all have different views on how the government is -- will step in. for thet ways government to inject cash into the system if at all they will. one says government spending will actually be the one to help. something to watch out for tomorrow and thursday when they usually conduct these repos is that they expect the boc to come in with limited amounts of money either tomorrow or thursday. that is when they usually do that. the third-largest, they are saying banks have enough cash.
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there is nothing to worry about and any sort of infusion would only go into the bank that need them. banks tryingt of to get cash to meet those requirements. we have upward pressure and the question is will the pboc step in to provide that cash? >> thank you very much, david. let's get to houston dynamo and -- haslinda aman for some of the stories making headlines. >> jeweler tiffany has been ordered to pay swatch almost half $1 billion after claims of breach of contract in a joint venture. tiffany denied the accusations and an arbitration panel has said it has honored its obligation in a deal that saw the two companies develop and sell watches under the jeweler's label. softbank recently bought sprint and may now be pursuing another u.s. phone company. sources say the ceo had spoken
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to a number of banks about buying majority stake at t- mobile u.s. softbank may pay $20 million for deutsche, -- deutsche telekom's stake in the carrier. china mobile is finally going to sell apple's iphone. the deal gives both companies a chance to claw back at market share in the world's largest wireless market. apple had been winning for the carrier to switch to 4g. dina mobile will begin offering iphones from january 17. that was today's top company news. she was mentioning there, apple's deal with china mobile means a lot for both companies. it will give the iphone a presence in the world's biggest market. it will at a spark to what is already an enormous operation. how big is china mobile? here are some of the astonishing numbers.
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>> if you are a blackberry
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shareholder, you probably felt bleated for a while. perhaps not on friday. a rare rally in taiwan. foxconn helps turn things around. why the enthusiasm? >> it is because john thain, the new ceo has big plans for blackberry and is transforming the company into a services company. it has announced a five-year deal with foxconn international to produce the smartphone, the blackberry. foxconn will manufacture it and it is important because it takes the inventory off of blackberry's balance sheet. investors who have gotten used to these terrible write-downs will no longer. that is significant. look at this quarterly write- down. $4.6 billion. $1 billion loss last year. they are trying to stem the losses. that is dealing with this
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inventory issue. foxconn and blackberry already have a prototype in the works. we are told that it is aimed at the indonesian market. do we have any timeline on this deal? >> it will evolve over the next five years. in terms of the development, that is taking place right now. indonesia is one of the first markets because blackberry is very popular in that market. mexico, they are said to be developing models for that market as well. area i was big plans reading an article in the canadian press. he has commented in an interview with the financial post. he said, there were too many hats. -- paths. we have not picked a path. >> we're are going to get back to markets. a lift as we head to the christmas holiday. john is taking a pulse of what is happening. .> volumes are very low
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tomorrow is a half day. japan today is shut because of the emperor's birthday. not much trading. , new zealand, australia, taiwan, korea by 0.6%. hong kong about 0.25%. 10 sessions in a row of declines for shanghai composite. singapore a little bit higher. the main reason for the gains you can see is because the u.s. third-quarter growth came in at 4.1% beating estimates. lagarde talked about abolition she is on the u.s. economy. they forecast 2.6% growth for next year. the fed has been really communicative about tapering. the unemployment rate is coming down.
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no budget impasse, no shutdown. that is quite encouraging. it gives a bit of a lift for this monday morning here in asia. kospi, hyundai is one to watch for. china mobile, china unicom, china telecom are all part of the atmosphere that is up in taiwan. that is also helping taiwan -- hong kong. up because of the hyundai story. >> thanks for a much. up next, from the sewers to the stock market. he rose and a half shell crushed their rivals. we look at how they transformed one company's fortune. ♪
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>> just giving you some breaking
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news. the shanghai composite is down after a positive start. guess what, that means we have got 10 days of falling equities there in shanghai and that means it is the longest losing streak since 1991. among those committees which are having a bad day, some of the banks. the country is having a deepening cash shortage. studio byned in the august. great having you on the program. what does this mean, this liquidity shortage in china? >> the liquidity normally has been tighter as banks try to get more deposits to cover through the year. expect, we still monetary stance to be neutral. >> you expect the government to be doing more? is to allowhe idea banks to get a sense of pricing.
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that is the idea with the introduction of the and cds -- ncds'. the bank is trying to allow banks to price rates more effectively and in a more market-driven manager. -- market-driven manner. i think in terms of the margins outlook, we do see some pressure because of the increase in interbank rates. some trendsseeing of deposits migrating over to timed deposits. these are going to be slightly more negative for the smaller lenders on some of the timed deposits. as a whole, we think the margins will be stable. the banks are still enjoying very strong pricing power. much of bank and land will be constrained by how much deposit it gets and how its capital level -- >> ratios have been strong.
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suggest thatations even for these big banks, they growthy sustain long without having to replant's -- replenish their capital. that is capping the sector growth. process, what does it mean for these banks overall? >> for the large banks, they will be better off. one of the things we have noticed in countries where rates are liberalized is that the funding tends to widen. we think they will do relatively well. for the smaller banks, it depends on their ability to expand. we are pleased to see that this banks have been quite successful in expanding their fee income contribution. -- what does it mean for the big boys? havethink the idea is to
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,ore specialized lenders especially the sector that is experiencing the most shortage right now is the smes. even for the large banks, it may not make sense -- >> absolutely. they are after quality as well. do you see more consolidation taking place? >> i think it is possible that we will have more consolidation with some of the smaller rural or credit cooperatives. the idea of having more consolidation also helps from a superficial standpoint and regulatory standpoint. >> let's get you would actually invest in. which is your favorite looking for next year? >> right now our favorite is bank of china. the share prices were the most resilient this year. that will continue.
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the good thing with bank of china is that it has a portion of earnings at 18% that comes from the overseas market. that part of the earnings is accelerating. part of it is market share gains for bank of china as they gain traction as an international bank. they are gaining market share with multinational companies. we are seeing faster fee income for bank of china. i have to ask you for the one that you don't care for that much, the one you would stay clear of. >> the one we are a bit more cautious on is bank of china in a show and. bank of communication. they have about one third of their lawns derived from that area. we don't think the worst is over yet. that will linger until early 2014. >> let's see if we have you this
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time next year. merry christmas. grace wu. there are times when you want a bunch of superheroes to come to the rescue. those heroes might be there already in the sewer. i don't know what this is all about. david is here with today's global outlook. not foru grow up -- long ago, you will probably recognize these guys. because of these four turtles and the rat, you are probably also well-versed in some famous renaissance art. the teenageng about mutant ninja turtles. next question, who will win a fight between turtles, transformers and barbie? you probably know where i'm going with this. the turtles come out on top. sorry, barbie. at least you are pretty. we are talking about tv ratings.
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this television revival of this cartoon went nuts. it was the third highest rated cartoon in the u.s. last month. 1.6 million viewers per episode. second, we are talking about kids. were -- there was an explosion in demand for sales and toys. jumped sixfold in the first 11 months of this year. this is where it gets fun as an investor. the stock price of playmate, a 600%see has shot up over for the summer of 2012. it easily beat its rivals, the makers of transformers. theasily outperformed bloomberg toys and games gauge. it has done quite well.
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while rivals have seen their margins unchanged at about this level here, that is about 11%, playmate had seen a dramatic turnaround from negative to 30%. that is about three times the industry average. who loses out in all of this? i hate to say this but a lot of people would agree. it is the parents. you are licking your wounds from all the spending you had. a good way to hedge those losses is probably buying stock in the toy company that is actually taking all your money. superheroes to the rescue. >> we had to break. still to come, we take a spin through the years wild. a limo sprig of with diamonds. ♪
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>> you are back with "on the move." we are going to look back at 2013 13 through the eyes of a car designer. motor shows around the world serving up an unusual array of we are concepts in attempt to push luxury to new heights. paul allen looks at some of the weird and wonderful creations. >> is it a car or a tv? honorable mention goes to micro max. hyundai became the latest automaker to unveil a hydrogen car. difference is the fact that hydrogen fuel cells
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generate their own electricity onboard. >> a great idea. --idea as for something you can actually buy, bugatti unveiled something in dubai. only three are available for sale at $2.28 million each. >> the middle east is our second largest market in the world. it is always a pleasure to be here in dubai. a rolls-royce shows off phantom encrusted with 400 diamonds. emerging markets weren't left out of the action. in vietnam, and increasingly affluent population is trading up. manufacturers of bulletproof cars in pakistan. >> [indiscernible]
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>> on the subject of safety, ford showcased its collision avoidance technology in belgium. the car will take over steering and braking if it doesn't affect the driver doing the job. paul allen, bloomberg. that andn get more on the rest of the day's top stories and watch us live wherever you are on the bloomberg cap. download it from the app store. onore we go, just a bit more film. a spoof newscast from ron burgundy has failed to topple the north american box office. hobbit" took 31.5 billion dollars, keeping it on top for a second straight weekend. coming up in the next hour, the deal is done and we have got
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more on apple's tie up with the world's against mobile phone operator, china mobile. this is "on the move." more in a moment. ♪
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>> hello, everybody. i am rishaad salamat. you are watching "on the move." gains in hong kong for china mobile. it will soon sell apple devices for the first time. stocks heading for their longest losing streak in shanghai since 1991. the fruit of the vine, where wine prices are headed and what to sit over christmas. positivity across the asia- pacific at the moment when it comes to the equity session. negativity about shanghai. it is now 10 days of declines.
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>> the longest period and 22 years. -- those shares are significantly lower against concern about the government and the very stringent measures on property. is inncern is the bubble certain parts of china. these are very high for aging and shanghai -- these are the main concerns. they introduce measures to bring down even more prices. opening fairly flat and unchanged. in the last half-hour, it has fallen by almost 1%. 10 sessions in a row of declines. see, hang seng, malaysia, singapore, australia, all seeing gains. the big gains in new zealand and
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taiwan. the u.s. forecast growth in the third quarter. christine lagarde of the imf is bullish on the u.s. economy because of ben bernanke's crystal clear communication on tapering and the beginning of the tapering. unemployment is coming down consistently and there is no budget shutdown or impasse. they are benefiting. china certainly is not. let's look at the pie chart. that in china, a lot of red going on. financials also sitting declines. materials, consumer goods, consumer services, these are the
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big ones. tech stocks also falling. tech equipment and computer services there down. 19 stocks falling, only one gaining. all of these companies are seeing declines. 20 students ask -- 22 stocks falling, only one gaining. -- only to gaining. wo gaining. china mobile, foxconn, you can see here. suppliers. taiwanese apple will now go to 1.2 billion consumers potentially in china. clearly very currently -- very encouraging.
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china mobile up by currently 1%. >> thanks, john. the chinese benchmark on its way down. as we have been saying, 10 days of losses taking place. david is here with the latest. >> whether or not investors should be worried is up to debate. if we are being objective here, we are seeing these interbank lending rates continuing. just looking at the trend on friday, there was a big drop. we are slowly creeping up again. we opened up 5.5%. over 7%.w up that is a two-day chart. we are still a little bit lower compared to where we were friday. just looking at the one-year chart, it is still fairly elevated. -- whatern right now is we usually get is every tuesday and thursday.
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that is when the pboc comes in and conducts. they did inject some cash into the bank last week but they didn't specify how much. just to give you a snapshot of where we are at this point compared to back on friday, you have the two-week there. perhaps a reason to be worried. >> what is the view coming from investor houses? will it continue? if it does continue, how will that impact market sentiment? we have a lot of expected ipos next year. how will this impact corporate profits given the fact that borrowing costs appear to be naturally increasing? spec -- spoke with the vice president for wealth management. >> this bike will eventually be normalized.
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i don't think it is something to worry about too much. china is going through a transition. it has enjoyed phenomenal growth over the last five years or so. this year, growth will probably come in at 7.5%. next year will likely slow down. markets have come to realize that. >> obviously there are lots of these out there. pboc is notthat the going to release that policy anytime soon to keep it from ballooning further. if they shoulded let things go. >> david, thank you. china mobile, shares gaining here in hong kong. a long-awaited deal with apple to sell the iphone. stephen is in beijing. this has been a long time coming.
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>> it has, about six years worth of negotiations. fruitionally coming to with its multi-year deal that will give apple access to the customers on china's biggest wireless network. addition, to those who already use the iphones on the competing networks, unicom had a big head start offering the iphone as early as november 2009. telecom, it has been offering iphones since march 2012. all eyes were on when would china mobile offer it. the big stumbling block likely was over the homegrown technology that china mobile uses in the 3-d space. space and for 4g. no other carriers have adopted this homegrown chinese version. china had resisted up until now.
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china mobile, always a top prize for apple. millionbout 760 wireless subscribers, 62% of china's total users. apple had seen its market share for its handsets dwindle in china as cheaper models from the likes of samsung, lenovo, xiaomi and other domestic players have outsold more expensive iphones. the iphones have a higher margin. that is something that apple and china mobile want to pursue as the margins for china mobile have been dwindling. they want those higher-end users that apple attracts. four china mobile, this is an important deal. it removes that competitive disadvantage that it had against the likes of unicom and telecom. it wants those high-end subscribers. mobile faces its first annual profit decline in at least a decade. they have been seeing those shrinking margins. deal is said this apple
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essentially negative for china unicom and positive or china mobile. perhaps many of these existing unit comcast is on the iphone customers onnicom the iphone platform could migrate to china mobile. it is a very key time or china mobile. they also announced they are going to be rolling out 4g beyond trial cities into 16 cities for commercial rollout by the end of this year. >> steve, thanks. let's talk to you about some of the other stories out there. staying with telcos, softbank recently bought sprint. it could be shopping again for another u.s. phone company. has spokenxecutive to banks about buying majority stake in t-mobile u.s. softbank could pay $20 billion
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for deutsche telekom's 60% stake in the u.s. operator. losing assets.up the car business will remain intact. hyundai will be selling off financial companies and restructuring shipping operations. the company is saying it will focus on shipping logistics and machinery business. they are doing that to further help us toalso resume operation in north korea. hyundai up nearly 15%. is growing more bullish on the united states. some are more optimistic about the recovery taking place. christine lagarde said last week's budget deal in washington and its decision to start winding back on the stimulus as it used doubts about the future. doubts about the
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future. >> those are good signs. in addition to which, we see some good numbers. growth is picking up. unemployment is going down. all of that gives us a much stronger outlook for 2014 which brings us to raising our forecast. next, a look at where the world's top labels are heading in 2014. " returns next. ♪
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>> it is a fair bet are going to be a few fine wines over the next few days. especially in china. our next guest tracks changing prices. the head of trading at bordeaux index. however things been over this
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year? >> it has been a challenging year in the fine one markets. prices have softened and a little. >> 2012 was a hard act to follow. >> it goes a little further than that. it was in the run-up to 2011 that there was a strong market and we have seen some declining --ces since have quite halfway through 2011. in whichen a year there have been some decreases on the major bordeaux wines. >> are people changing their drinking habits? are they moving away from bordeaux? >> very much so. that is the real story. the exceptional prominence that bordeaux has had has diminished a little bit. state of affairs
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has emerged in which people are enjoying wines from burgundy and champagne. as i said, in many ways it is broadening the man. still the kong world's biggest wine market? >> it is a hugely important market. not only in its own right -- >> it is the gateway. >> the gateway to china. beyond, to the whole of asia. that was the strategic objective in taking duty away and encouraging them to come and trade here. it has been mostly successful. >> what about wine knowledge? there is a lot of education in this part of the world currently. is that paying off? >> it is broadening interest. when any market that is new to a
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product will tend to follow a limited set of the most well- known the stages names. bordeaux, they great names. they were the great beneficiaries of that. ,ith time and connoisseurship this is an extremely sophisticated part of the wind bringing world. tops have their trade in beijing and hong kong. once it would have been restricted to paris and new york. >> let's start off with bordeaux here. this is bi. >> apologies for the shameless plug here. this is the bordeaux index wine. what i wanted to suggest was that, certain wines that you might call upon to help.
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this is sort of the party one. about >> very accessible. table line essentially. >> quality wine to open and drink not necessarily with food. like food would be ideal. >> let's take a look at spain now. 2001. >> for a good vintage. the thinking is something to go with a bird. particularly optimistic on of the world, rather than turkey it is duck and goose. this is one with a little bit of acidity. that goes well with the slight pettiness of those meets. young one. it is very capable of another 10
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years and bottle. one of the great producers. a very good wine. >> and? >> around 300. -- andgoing to move to only it is a celebratory season. i thought it was russian which was a little bizarre. wine at actually had a bit of a research. -- exactly.en it is even more than that. give or take, it is the same kind of soil composition that runs all the way from northern france into sussex and southern england. environment is very comparable and these are top quality wines both for celebration and for anyone that drinks wine.
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>> i remember 2006 in the u.k.. it was a horrible summer. >> it may well have been. it is marginal. it wasn't as bad as 2012. they didn't make 2012. 2013 will be excellent. vintage specific. this, i have tried and it is.... , something that used to bring shadows to people when they were talking about german wine. you brought one in. this is the reasoning. -- this is a riesling. wine is far more accepted now. >> this is a great and long- standing wine. >> is that because they use to export all the crap to the u.k.? >> the british markets were the
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downfall of the fine german wine. it came to be perceived as a sweet and cheap wine. in fact it is a great armitage to german wines. this one i chose because i read that in the u.k. over 50% of adults expect to have had their first class of wine or alcohol by a limit :00 a.m. on christmas morning believe it or not. this is low alcohol. it is sweet, refreshing. it won't send you back to that. >> we didn't get to the sweet wine. thank you so much for coming in. have a great christmas. >> up next, take a look at what is going on in thailand. more pressure on the prime minister as her opponents vow to drive her out of office. the latest on those protests in bangkok coming up. ♪
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>> antigovernment protesters have stepped up the pressure in thailand lying to continue their campaign to drive the prime minister from office. the opposition says it will boycott the upcoming elections. haslinda amin has more on this. these protests had seemingly gone away. there is a return to the streets. >> you are right.
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return to the streets. the pressure is building especially with a prolonged protest and the boycotts. the government is expecting up to 70,000 protesters today. in bangkok come at the peak, there were 200,000. key ministries disrupted, the government was forced to dissolve parliament on december 9. here is what prime minister yingluck shinawatra had to say. it is regretful that democrats decided not to take part in the election. she said the democrats' aim is political reform that can't be achieved without holes. .he democrats -- polls agreed to use live ammunition on demonstrators in 2010. they are closely aligned with the protest movement. suthep has pledged to prevent the vote from going ahead. it is important to note that
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yingluck was democratically elected and the democrats have lost every single national election over the past two decades. their struggle to win support wherehe rural areas yingluck remains her view today's. retains her huge base. >> if this boycott does take place, how constitutionally can the election go ahead? >> it can. in a speech broadcast on state owned tv yesterday, yingluck said the vote will go ahead as planned. it must be held within 60 days that parliament has dissolved. she can't delay it. parliament was dissolved on the summer nine after the democrats designed -- resigned to join demonstrations. 45 parties are ready to participate. i want to show you how the markets have responded. the benchmark down about eight percent in the past two months.
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the second worst performer in that time after the philippines. the baht continues to weaken. it is pushed down by the protests as well as the fed tapering. no surprise, investors are pretty nervous. >> thanks very much indeed. has linda eyman joining us from singapore -- haslinda amin joining us from singapore. bangladesh has charged 13 people in connection with a fire. 112 workers died in the blaze. emergency exits were locked. says many of the accused executives may have fled the country. the former oil tycoon mikhail khodorkovsky has vowed to campaign for political prisoners and russia after he was released by president vladimir putin. khodorkovsky spoke at checkpoint charlie in berlin. he rolled out a career in
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politics and said he would not fund opposition parties in his homeland. he says he has friends who are still in prison including his former business partner. china's lunar lander and rover have spent the weekend taking pictures of each other. this is before they resume the exploration of the moon's surface. they reached the moon on the 14th of december. the rover will spend the next three months looking for natural resources. the lender will serve as a landing site -- survey the landing site. jpmorgan is expecting japanese stocks to rise 40% by 2015. after the break, we will hear from an equity researcher who calls himself japan's last optimist. ♪ .
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>> stocks in china have their longest losing streak since 1991. china mobile is advancing and hong kong. they finally sell apple devices. the first time. sink or swim. has in store for japan. no training in japan for the emperor's birth today. what are we seeing? >> you can see clearly, the u.s. foundation is pretty robust
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since the big forecast. i am pretty bullish about the forecast. forecast.aise the they are certainly bullish. the communication from federal reserve about tapering. a good foundation. china is extremely volatile today. it is slightly higher than the last half an hour or hour fell by nearly 1%. of losses. day consecutive losses. the longest losing streak since 1991. once again back up. it is regained declines, a clue a bounceback. red,ey do close in the it'll be the 12th straight day of losses. 22 years. zero point 67%. you have a key we are there as well. it is down. malaysia and japan is closed for
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the emperor's birthday. turnaround of china by the way. it is slightly higher today. the health care. pie chart isna's pretty bleak. down bygy and also eight percent. the stock with returns of 1.5%. your media down. the key today. look at that. up by seven .2%. china tv media up. chena -- china universe publishing up for the look at individual stocks today. details in a minute. foxconn are slightly higher in taiwan. supplier. bigger
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0.1% -- bym up by 1%. mobile will have access to 2 billion subscribers in china. >> ♪ has raise the capital requirements to boost. the trading day over in jakarta. half an hour old. us.king the story for >> bank of indonesia will issue several regulations to tighten capital requirements. it aims to be a standard. ons will be effective january 1. it will be gradual
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implementation. it aims to boost bank's ability to absorb a risk during the crisis. the banks are required to have minimum of four capital of six 4.5% ofand liquidity of assets. some banks will be required to add a buffers and compromising and countercyclical buffer. while important banks, they set up capital. a bank of indonesia has increased 125 basis points from last may. in an effort to help the weakening rupiah. it depreciated around 23%. the rupiah has little changed. after earlier touching at 12,000. the lowest since december 2008. in the probability it will climb to a 2008 high of 13,000 versus the u.s. dollar. bank of a division will raise
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the key interest rate at their monthly meeting. pointsedict 25 basis next year. on the markets of france, indonesia shares started off the day gaining. -- they rose six dident host. indonesia 1.6%. tracking forecast that sales will drop in next year. that isolates from indonesia. back to you. >> thank you. joining us from jakarta. other stories making headlines. japan announcing a record budget next year. 900 $20 billion proposal which kicks off on the first of april -- the fiscal year kicks off for some it will be submitted to parliament. shinzo abe wanted to boost spending on social security and the defense and public works.
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but try to contain the debt. japanese equities arising the ears.mong 24 developed what one next year bring? good morning. of japanpan -- head equity and jpmorgan stuff you are the last optimist. it seems you are in good company. look, i am still a very bullish on japan. japan and did well in 2013, but 2014 is going to be very, very good. topix topics rising to -- rising to 1800 by this time next year. one thing drive and it is earnings, earnings, earnings. you see visibility of profits and earnings surge in japan and that is where you want to be.
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>> earnings growth -- is it really all it down on the export side particularly because would've seen yen continues to that, changep of in the japanese corporate culture? >> this is the key point. obviously, they yen -- the depreciation helps. much importantly as a fundamental change in the corporate japan. what really happens here is the disaster of fukushima was a trigger point. restructuring happened. corporate japan lowered their breakeven point. the benefit of that is what you see coming through right now with an explosion of profits particularly here in the domestic sectors. is it the also say strength of the yen which causes
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this to happen in many ways. they reap the vent -- maybe the benefits. good point.a japan was not a lazy over the last 10 years. it look dismal as an investor because the market was adjusted. private sector weather car companies or department stores or japanese banks, they all it did in the hardest thing and cut out capacity. they invested in better systems. the benefits are now coming through. >> and they had to do that. we keep on talking about structural reform that is needed in japan. that's the so-called third arrow. anything,o be done if it abenomics really -- more than anything? >> it is very interesting. i think you should not call the third arrow. i think you should call it
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10,000 needles. it is like a lot of little steps the government is taking whether the regulation of nursing care or energy policy or agriculture. these are all a little, little steps. banges rather than one big . the net effect of the next couple years is going to be more efficient and more productive domestic japan. >> is that's really what we have to wait for? how long does the stimulus go on for in the meantime? >> it is interesting because japan is probably the most pragmatic fiscal policy country right now. next year, we are going to have an increasing tax. but to buy insurance, the government is increasing spending. ofis a very good balance
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countering the cyclical downturn while at the same time improving the efficiency of the overall tax system. >> if you would stick around, that would be fantastic. a breakthrough for apple. how to deal with china mobile. the details when "on the move" returns. ♪
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jpmorgan. it has been about the yen. what are your targets? we think the dollar is going to be strengthening across the board over the next six months. i guess they yen, 110 is probably a good target to have. is the impact of the
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economy in the u.s. improving the imf, opened a forecast -- upping the forecast? >> the united states for japan is the most predictable market. corporate japan over the last three years has a massively stepped up their offshore production in the united states. the japanese car industry now almost 80% of the production capacity is outside of japan. the united states economy doing well and we and jpmorgan think america can grow by three percent in the second half of 2014. that is very important. it is a volume, the number of cars stalled in the united states is where corporate japan makes its money. how do you frame your portfolio? water allocations
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looking like? -- what are allocations looking like? >> as i mentioned, we are very bullish. to 1800.topix can go by sector, we really like the domestic sectors. ,apanese financials in general the banks in particular. it is very interesting the bank sector is the one sector where the consensus looks for earnings to decline in 2014. we think this is wrong. japanese banks have seen a pickup in a long of volumes and well as the big bang for your buck will, by looking at japanese financials. >> i want to pick up on that, jesper. would've cap files dunes before. japanese banking looks -- we before. false dooms
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look --e's banks japanese banks look weak? >> they are expanding the central-bank balance sheet much more important for the first time in one generation, we are getting the private banking system actually lending. if there's demand for credit in here and japan and the money multiplier is kicking in. that is the real excitement we are seeing in tokyo and the rest of japan. christmas,reat jesper. we will find out how right if at all you are. let's get you to some the top stories. other top stories making headlines. >> i am angie lau. are the top story.
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softbank recently bought sprint and may pursuing another u.s. phone company. sources said the ceo has spoken to a number of banks by buying a majority in t-mobile u.s. they may pay $20 billion for georgia telecom -- deutsche telecom. ordered to payn almost 500 million dollars because a breach of contract in a joint venture. they denied the accusations and a panel and set a honored its obligations to the deal. the two companies developed watches. after six years of negotiations, china mobile is finally going to sell apple's iphone. it gives him a chance to claw back share. apple had been waiting for the carrier to switch to 4g. china mobile will begin to offer iphones jaaber 17. those are the top stories. i am angie lau.
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mentioning,was apple's a deal means a lot to both of these companies. it will give a press is in the world's biggest market and add a sparkle to an enormous operation. how big is china mobile? here are some the astonishing numbers. >> ♪
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>> blackberry shareholders, a rare rally. that's on the deal with foxconn can help things turn around for the company. actually quite translational. >> it is. a hardware company that is intoy intent into moving services. higher-margin businesses. the new ceo making the big move yesterday with the announcement that the company -- friday outsource thel production of smartphones to foxconn. the major taiwanese company that makes the apple iphone and ipad.
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this a big shift. the first are teaching move by the new ceo. there he is. john chen. investors are betting that he will do the same at blackberry. the stocks saw the biggest one- day gain in four years. this does not guarantee profitability. for $.2 billion write-down. -- $4.2 billion right down. -down.te no buyers. that is a telling situations. investors will have to wait and see. and quarters in deed of declining fortunes for the company to see the stock price search on friday is a welcome back. we'll see if he can deliver on the strategy. >> thank you very much. coming up, this is "on the move ," a full market round up.
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and the prospects of 2014 as well. ♪
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bid tore focusing on the buy u.s. sprint. it has hit another bump as india ordered another look. what is going on? deal has been mired in controversy. there is one more big hurdle. -- [indiscernible] what has happened in a shocking order on friday by the high court, the justice ruled that bel was null and it will
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cap. why has this order been put out? unsecured lender specifically had petitions in the court. they actually went to the court and said -- [indiscernible] please allow us to go forward with the deal. because of the petitions. gave approvalany for the deal to go through and despite additions, this was appealed by the lenders in the higher court. thatigh court has ruled the local did not have any jurisdiction to get an approval for the deal unless petitions have been submitted and heard. they are saying the comedy should be round up because they
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were not being to pay its debts. it is now in the docs. company? the and they will be reading the order and analyzing and today will have an appeal in a higher court. it'll be a long drawnout drama. there is a big overhead on the deal. back to you. >> thank you very much. the year is nearly over. through the eyes of car designers. they are serving up weird concepts to push luxury to new heights. as you can imagine, new prices as well. paul allen looks at some the creations. >> ♪ tv? toyota or futuristic takes the prize for 2013 idiotic concept cutting
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board -- odd concept category. vehicles you will certainly never be able to buy, the latest automaker to unveil a hydrogen car. is the factrence hydrogen generate on board. >> a great idea and often praised for the 21st century. it is somehow absent from the streets. as for something you can drive drive, this was unveiled in dubai. three are available at $2.8 million each. one of our second to largest marks into the world. it is a pleasure to be in dubai. >> rolls-royce chose dubai to show off his phantom encrusted with diamonds. the emerging markets were not the left out. the vietnam is trading up.
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picking up techniques along the way. manufacturers of bulletproof cars are finding a neck in pakistan. in pakistan. >> [indiscernible] >> on the subject of safety, ford showed collision avoidance in belgium. the car will take over the steering and braking if it is not detected the driver doing its job. perhaps they are saying driverless cars for next year. it for "on the move," stay tuned for "asia edge ." head of asia and barclays.
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still shopping to do, the top five gadgets. get his view on the china mobile deal with apple. that is coming up. asia edge is next. ♪
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>> the middle of the asian training day. this is hong kong. a glorious day. you are watching "asia edge." the top stories. snap thes -- gains to longest lucas -- losing streak in 19 years. apple's breakthrough in china. in shutting down timelines. demonstrators -- as shutting down in thailand. -- demonstrates. as well -- >>re
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we will hear as lawmakers talk about approving conceals. sales a japanese media. sent to is ready for the big day. -- santa is ready for the big day. the top five gadgets. that and more in the busy dishing of "asia edge." >> the u.s. story. taiwan and hong kong and philippines and china having seen a decline. totally recovered. that a bad run of nine days of declines. up 0.5%. you -- the u.s. gdp better than expected. very bullish on the


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