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tv   First Up With Angie Lau  Bloomberg  March 30, 2014 7:00pm-9:01pm EDT

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topping 100,000. crowds in taipei protesting a pact with beijing. ipos returning to china with a beating rowdies. is the loser. why the euphoria did not last. thisme to "first up" morning. i am angie lau streaming on your mobile and bloomberg.com. it has been a tough run for chinese investors.
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ipos this year in shanghai and shenzhen happen moneymakers. we know this is that. almost 50 companies went public. you look at ipos in the chinese mainland. they vastly outperform elsewhere. >> it is important to note that this chinese regulators at play here, not necessarily market. >> you're looking at the average return, reflects good performance of the market and sell. there are a lot of new rules. they have come in to protect smaller investors.
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beenof the new rules have with pricing. you want to avoid all the funny stuff that goes on. a lot of funny stuff. if you want to price your ipo above average coming up to disclose risks early on. among the 48 firms, only 40 priced their ipo above the industry average. this could have been raised for much more money. have dropped out
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of the process for exactly that reason. the pharmaceutical is here in january. it has worked out well. not bad. the markets have really underperformed. >> this is a really good trend for you. >> this is based out of northeast china. the second biggest ipo in hong kong, 992 million u.s. dollars. 3 billion shares priced at 290 a share.
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>> this is a ticker we will be watching for on our terminal. top banks have been forced to accuse them of manipulating benchmark interest rates. it is an implication from london to tokyo. more trouble for bankruptcy stations. >> the court judge has said this seekst can go forward. it class action status to represent a group of investors. this has an impact on individual investors.
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-- an alleged permitted commission has a subject of a white red investigation. there are 20 banks including j.p. morgan and they can proceed. forhese are also benchmarks things like mortgage securities and 30 year mortgages. fight to many of these benchmarks as well. >> it impacts not only the big boys but mom and pop on main street as well. an issue on this particular lawsuit the violence could be added to it. losses from short positions on euro/yen contracts. libor euro/yen.
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it is complicated. there was widespread fraud in these markets. the banks have declined to comment. >> there was a story that broke here in hong kong other offices. people familiar with the matter are telling the commission havest corruption conducted a search of the office. the racks story here is that u.s. investigator authorities are looking at hiring practices at jpmorgan and potentially other banks here in asia.
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there is allegation here by the u.s. authorities. run afoul ase jpmorgan such increase the business. this investigation is coming in over the weekend. >> the spokesperson declining to comment. thank you. better than expected earnings from china bank. talk this by 3% last quarter. they round up earnings from
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china which are under pressure to raise funds. a large corruption scandal in china. a former spy chief. hundreds of those relatives have said to be taken into custody or questions. dhe report cites unname sources. the plan for closer economic relations with china has been denounced by hundreds of thousands of her's. estimates of the size of the crowd. . peopleere around 100,000 per organizers claimed over half a million. the president refused to shelve a deal that would open taiwanes e services to china. this is higher. gas giant dollar right now
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andngthening 92 u.s. cents it is continuing to build on the against weekly gain in two months. is after he said he is confident of keeping growth in the region. strengthents is your there. we're counting down to the open of japan and south korea. let's head to japan. the nikkei 225 last closed at half a percent higher. like it will kick off a new quarter. the dollar yen right now is weakening. 10290. despite today's moved to the outside over the past quarter, it has not been so good for japan. shinzo abe's plan is facing its biggest test.
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the foreign money flowing out of the country. billions of dollars being pulled out, putting the stock market and a downward spiral. john dawson dawson is here with the details and background. if you were an investor in japan, you were trying to get out. ¥9.7 billion. this is a genetic figure. rose this year. this year it is the worst performing benchmark of the developed markets, down 8.9%. we have short-sellers again. this is one reason why it is happening. it is quite strong. putting the money out.
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fact yoursll these again. it rose 3.5% last week. for the first quarter, this time last year was the second straight quarterly gain of 16%. a lot can happen. a biggest decline appeared down 41%. a stronger yen. >> faith is wavering. what is needed to restore it? >> it is really powerful. this must be cut. the labor laws must be loosened. the partner agreement must the dealt with. these must be clearly communicated. the strong yen was not part of the plan. it is helping exporters. that is the impact.
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quite confident clacks -- confident there. >> this will be there. it was a superb event. really fun. lots of friends. new zealand beat england in the final. >> you look recovered. it was hong kong's biggest sporting event in ov. it is over with dramatic whether failing to spoil it. new zealand beat this 26-27.
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new zealand going back to the top, standing for celebrations. in the series evidence. more after the break. ♪
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on theone-way bet chinese currency was upended this quarter. the government to have a decade strengthening the currency and change course to route out speculators. china is loosening the grip to market forces by doubling the
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-- trading band this year. let's focus on the key area. martin joins us from singapore. it is good to see you this morning. let's talk about that one way that that people have been betting on. that is all over. what does the next year bring? >> definitely the central bank has decided that they come here betting on the yuan. i do not think this is a complete change in tactic. i think we'll see it continue to appreciate over the medium-term. investors keep hiring in. a keeps the currency down. moment isar at the what is going on in the economy. they are likely to show a very weak number again.
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we have a flash pmi that shows a very strong contraction in the manufacturing or. where read.estors it is slowing. that is a big thing. >> that is the thing. you have janet yellen telegraphing that interest rates are going to rise as well. group coming out the past couple of days saying that the yuan is like a going to see the kind of volatility. >> there is a lot of uncertainty. they lead toward this global cycle. the fed is tapering. this is a very uncertain time.
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about rising the bad debts over chinese banks. >> this is in that realm where there should be panic signs flashing. we do nothing for the moment that this is on the cards. we think it is possible the authorities in china have realized this is the problem. they are trying to reduce credit growth. the question is whether it has already gone too far. for the moment, we do not think we're there. it is doubly a risk. >> are you as optimistic about
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japan? >> i do not think so, no. this is probably going to be quite upbeat. we have the sales tax kicking in april. this will be quite strong. this will be very weak. the question will be what the economy looks like we'll make it through this and whether the sales tax is causing all this volatility. it'll look like it is going to miss the 2% target. it will be forced into rolling out some more stimulus. this will happen around the october meeting. >> stimulus for japan. what about rba? no stimulus?
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not for the moment. at the last meeting, they said as long as the economy continues to develop its ease stability and interest rates. there's not been any data out of their recently that would leave it to change that view. the question is what happens in a few months time. the slowdown in australia has not really kick in yet. we start to see that in the quarter. fourth we do not think this will be enough to take over from the slowdown in mining investment. i'm looking at one interest-rate bank tries toal respond to that slowdown in the overall economy. the rba tomorrow almost certain to keep its policy rate unchanged at 2.5%. that is also the call for a lot of economists.
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still to come, the hunt for debris. search foroin the the missing plane. more on the latest locator coming up next. ♪
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>> welcome back for the search for the missing elation airline. airline.g malaysia
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a fleet of 10 planes and 10 ships are in the area. 1800 commenters west of perth. let's get the latest on the dutch kilometers west of perth. let's get the latest on this. what our family saying as well? of the chinese passengers in particular are pretty angry about the situation. to give you an update on the search, the search today includes the ocean shield. it has been fitted with the water vehicle. time is running out. the lack box is battery operated. the beacons last for about 30 days. today is day 23. if they did i get a location on they have to slowly use sonar to get a digital image of the bottom of the ocean and that is incredibly a long
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process to go through. >> back to the families. they are just so angry. how have they expressed their emotions? truthy are demanding the from the malaysian authorities. relatives are demanding an ap ology and for the prime minister crash in saying 370 the southern indian ocean. the families were flown from .they want truth, dignity. give us our relatives that. very strong words. agencies there have announced boycott of malaysia. suspendedes have malaysian airline flights. >> what do we know of the
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objects identified so far? 70e they related to the mh3 planes? >> the sightings continue to be reported. so far haveieved been a rubbish. no evidence being related to the missing plane. withooden pallet was unidentified green and orange objects. we heard about that. they have not been recovered yet. trickyration is challenging because of the conditions and the weather. a search is owned expected to see low clouds and rain today. we're into the fourth week. still little is known. .> thanks checking some other stories making headlines, u.s. secretary of state and his russian counterpart have held talks in paris, seeking a solution to the crisis in ukraine. itrecorded to say that
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cannot function as a unified that and should be regions choose their own language and economic model here at he described the talks as very constructive areas crimea has cemented its ties to russia by switching to the same time. krause cheered as the clocks were move forward by two hours to be an line with moscow. it is a symbolic move away from ukraine. up, revival losing momentum in japan. we will hear from the head of an e-commerce committee will meet return. ♪
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>> more than 100,000 attack taiwan's trade deal with china. abenomics faces its biggest test as she pennies -- as japanese companies look abroad. congress versus conservation with the world largest living thing under threat. good morning. breaking news out of australia. we just got the latest tv inflation figures. let's go to sydney for the numbers. rate ofding to this
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inflation, it is up .2% following on from a similar rise in february. we were discussing this on friday with the price of concert tickets. this is a bit more meat and potatoes. potatoes.meat and it was up 1.3% in march. holiday travel and discretionary items. on the flipside, automotive fuel declined by 1.3% along with the computing equipment. number of .2% the for the month of march. going ahead, this was described as an uncomfortable read for the reserve bank of australia. it predicted inflation to rise by .6% for the quarter. 3% annually. that is the very top of the rba
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range. the security note that the rba is taking a glass half full approach. these are starting to pick up. this does build the case for an interest rate rise in australia toward the end of the year. around august they expect to see the language change around these emergency rates. they are at the record low 2.25%. the forecast is softening up around august. tomorrow.es meet they are expecting no change but just a 1% rise at a rate cut. otherwise the rba expected to sit tomorrow. this inflation rate of .2% does give a little more but just to the case for a rate rise later on. is expected to
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stay put at 2.5%. td pointing to a comfortably higher inflation, nudging up to 3% for australia. let's check the asx 200. gains.xtending the australian dollar off the high. right now it is at 92 u.s. cents level. we are counting down to the open and japan and korea. that head over to japan. the decay to 25 last close this on a quarter. checking futures trading in chicago will add about 150 point two the session this morning. 50 toirst day of the -- 1 the session this morning. the first day of here will raise the sales tax for the first time in 17 years. the outcome will be shinzo abe's
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biggest challenge since taking office. there are concerns it may force companies to look overseas for growth. we spoke to one of japan's richest men who runs an e-commerce on penny. >-- company. longer-term it will gradually shrink. the japanese that companies will become more aggressive for expanding their business overseas. automobile.e global fromen very the beginning. now we are moving to service, retail. expand theying to business overseas itself. challenging for acquire aompanies to
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company and post merger integration. gradually they have started to learn how to do it. the executive companies are becoming more international. we're bringing more and more japanese people on the board. moreare becoming more and local. what there is a higher chance of them becoming more successful. they are more ready to be there. wille japanese company ceo be japanese. some of the key event we are watching for you this week, japanese consumers may have to
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tighten their belts when the sales tax hike kicks off tomorrow. it is part of shinzo abe's plan to cut the debt burden which is the largest in the world. increase in first 17 years from 5% to 8 or send. on wednesday we are going to see the cutct suffered from down on lavish spending. they expected little profit change because of weaker demand in europe and asia. talks of hawaii this week between u.s. and other defense ministers. the summit comes on the backdrop of the pan asian response to the missing malaysian jetliner. also on the agenda are the various church real disputes. then headl been to japan to discuss the
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continuing debate about moving the giant american facility at okinawa. you also visit china for the first time as defense secretary before going on to mongolia. -- friday is the latest jobs data from the u.s. the unemployment is expected to drop to the lowest level in more than five years. yang yang fouled this report from washington. >> two major multinational corporations will raise tough questions from lawmakers this week. first to walk the plank is caterpillar. they will be under senate scrutiny tuesday morning. general motors will be the topic of a house, energy and house hearing. mary barat will testify at why it took them more than a decade to recall 1.6 million vehicles with all the ignition switches and links to at least 12 deaths.
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wednesday international monetary christineing drifter lagarde will deliver a speech on the state of the global economy following the relief of the analytical chapter of the imf global financial stability report earlier in the week. developers could be in for a new release of their own. , microsoft is expected to unveil its windows theirit .1 update and answer to siri. they expect 197,000 jobs were added this month and the u.s. unemployment rate dropping back down to 6.6%. the lowest rate we have seen since october 2008. we will have all the weeks news for you right here on bloomberg television. back to you. other stories making headlines. here is david. a tradingng sees
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debut from the far north of china. bank shy a billion dollars. lenders and china are being squeezed by the slower economic growth in there and rising bad debts. in hong kong, the anticorruption agency is said to have search the offices of jpmorgan. investigators seized computer records and documents from the outgoing ceo for china investment banking. jpmorgan declining to comment. so far authorities have been looking into hiring practices at the bank. there is libor and then there is tibor. the net continues to widen. a district judge has ruled that zuho and jpmorgan are one of
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20 that have to face action around the alleged fixing of the euro/yen interbank rate. those are the top company news this hour. the first country to raise rates this year is also the home to the best-performing detent currency. we will look at the kiwi dollar when "first up" returns. ♪
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for theire known intense rivalry on the sporting field were the scores can be incredibly close. that is playing out in the markets. john dawson has the answer. the two countries are -- >> australia and new zealand. known for rugby, obviously. situation seven
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percent at a 3.5 year low for the australian dollar. 4% in march. the kiwi has outperformed it. the kiwi is up by 5.8%. the highest level right now is 2.5 years. games of the developed market as concern for the exporters. 2011 is when they are high. orange is the kiwi. the white is the australian dollar. a lot of this is down to china. they are about to be in reasonable range. there's also room to move. >> a lot of people heard signals of stimulus and china.
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>> it is going to help the x porter's. -- the exporters. here,odesty currencies australia, new zealand seeing some big games on the back of china. when is the next big rate hike? >> tomorrow we have the rba. currently 2.5%. there it is. beautiful. notice the size of the queue we boxing glove is bigger. you don't want to have too high of interest rates. the kiwi is another kiwi fruit. then the australian kangaroo is 2.5%. tomorrow there is no change expected for the rba. he did expect this up by the end of 2015.
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signs of domestic consumption improving. the kiwi is from boxing glove. they raised rates. the first hiring great. >> when is the next one? april 24? >> there's expectation that they might jack it up. >> maybe. >> against the backdrop of the four x situation. >> there's the expectation of higher rates. >> left him are on the prospects for the kiwi and ozzy. joining us from sydney is the head of the strategy at compass global markets. you about thatto rba decision coming in tomorrow. it is expected to maintain at 2.5%.
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the inflation figures shows that things are getting uncomfortable over there in terms of inflation. we are still trading water at the moment. expectations of the mining boom in developing a game. they have this on their hand at the moment. see what plays out. he is renown for being part of a setback in weight approach. >> do you think that the diversification away from mining is working? >> in australia? we are not moving back into manufacturing. that is the problem. we have a very good importing base. we are away from mining slightly. still looking is to get a lot of revenue. it is something that will not go away. we need manufacturing here in australia. this is not going to happen. thehat is your forecast for
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us chilean dollar for 2014? we are still looking at the rally. we are looking to go back up to the 95 levels. starting to pay this back a little bit as we start to climb higher. we are looking to nearly fell out of everything. we will take a wait and see approach. there will be a lot of importers looking to hedge because they got called out. at the same time, the exporters will not dump on that. are you looking at an eventual rate increase out of australia to continue that drive upward? more into theing middle of the year, june and july. anything at this stage is a little bit too early.
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australia would love to be before the kiwi's but we do not have the numbers to do it. >> speaking of the kiwi, it is at a two .5 year high. there's expectation that april 24 we will see another rate -- 2.5 year high. there's the expectation that april 24 we will see another rate hike. do you think that will come to fruition? market has been on it for a little while. it looks like it will come to fruition. the kiwi has been rallying quite steadily. it has been quite a big moment. we are looking for the kiwi thenst the dollar to break 87 level. dimly seen see it rally up to the historical highs. >> do think china will drive this currency story for the australian dollar in the kiwi? >> at the stimulus comes in for
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china and it will benefit, everything from dairy to iron ore to coal, it is a pretty for that.esult that is what we run on the back of. we're looking for a lot more positivity out of china in the near term. crisis is economic well behind us now. we're starting to see it develop. china will be the lead in that. going to break out in the lead? the australian dollar or kiwi? >> you would have to think the australian dollar. we are down around 106 at the moment. we are at near historical lows. in 2008 we were down about 184 or 185. we are finding this again. we see the us chilean kiwi going about 116. all right.
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thank you for that. thank you for joining us today. thank you. a close eye on the australian dollar and the kiwi. the juliett 2.5 year highs. -- of the australian dollar at 2.5 year highs. coming up, breaking news out of japan. they have released the latest factor output data. zeb eckert is here with the details. are seeing month on month industrial production numbers in japan unexpectedly dropping in february. this is not what economists estimated. this goes against the trend we were expecting. we have a 2.3% drop in japanese factory output for the month of february. 2.3% follows at 3.8% increase in the reviews month. quite a significant falloff
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here. growth slowing 6.9% in output. the survey called for dive .9% increase. that is the sixth straight increase on a year on year basis. watch in theing to market will watch as we move closer to the japan open is this month on month number. output falling in february 2 .3%. expectation was for three tens of 1% increase. >> still to come, the world's largest living thing is under threat for the world's insatiable appetite for coal. the great barrier reef when "first up" returns. ♪
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>> shipping in australia's great
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barrier reef is expected to triple over the next 15 years. aboutrenewing the debate commerce versus conservation. it sets up against the fate of one of the world's greatest living treasures. all island reports. >> australia trades it towards him reputation on images like this, the 1500 mile-long great they're your reef is not only home to teaming marine life but is itself a living structure coral. it has an uncomfortable neighbor, a queensland coal industry. >> it accounts for about one every five dollars or directly and energetically in the queensland economy. it is about 300,000 jobs. >> that is set to grow. this will soon be dredged and develop into the world's largest coal terminal. 3 million tons will be dumped in the marine park.
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shipping traffic is forecast to triple by 2030. development has not escaped the attention of the united nations. it will consider whether to list this as being in danger. huge risk.unning a we have the international community concerns. unesco is concerned. we are talking about millions of meters being dropped in a fragile environment. >> shipping is closely regulated. there has only been one safety incident in 10 years. it points to a government study which found most of the damage has been from extreme weather events. >> there are long government organizations who are lobbying thecommittee to declare great barrier reef is in danger. we need to understand the motivations.
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we are trying to shut down the coal and gas industries of queensland. they will say anything and do any way to achieve their goal. >> they have every reason to feel paranoid. it has been the target of greenpeace and the eye-catching campaigns. the conduct of expanding resource companies is also attracting the attention of fund managers. >> it's associated with the broader environment. it is shaping some of the important investment decisions. perspective,tor's they raise a number of questions about how they are managing what potential risks might be. case, the risk is being balanced with the future of the greatest living organism on earth. paul allen, bloomberg. next, the darling of the
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stock market has become one of the year's worst performers. details next. we're counting down to the open in japan and in korea. this is "first up." stay with us. ♪
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>> topping 100,000. crowds on the streets of taipei. tokyo returning to china with a world beating rally. the loser during the period is japan. we'll ask why the euphoria didn't last. welcome to "first up" this monday morning. i'm angie lau. coming to you live from tokyo and streaming to you live on bloomberg.com.
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a surprise drop in tokyo. tokyo begins a new trading weekend -- week, and a new trading quarter. >> not impressing the market. we have a 2.3% drop on a month-by-month basis on japanese production in january. this is a big surprise because investors were looking for a gain. >> ahead of the sales tax. >> exactly. >> so people will be buying more so they produce more. >> that does not appear to be the case, angie. . ey have a prior best of 3.8% investors can take comfort in a sixth straight year-on-year gain, if you will. that compares with a .9% estimate. you have a higher output of electric machinery, information, and other communication devices helping here. electronic parts and devices contributing to this gain. but the month-on-month number a
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key challenge. remember, angie, the markets on its , the topix posted lowest numbers in three months. we'll see if they put it to a higher open. >> the survey tomorrow, you know, we're trying to gauge the optimism ahead of the sales tack increase. this is certainly a surprise to the down side. >> it is. and we'll see how that impacts markets today as well as the yen. very ow, as you said, important. and this year marks the anniversary of the record stimulus program. >> that's right, started april 4, 2013, with a 2% inflation goal. we are not there yet. >> factory output was a surprise for the down side, dropping 2.3% down when in fact
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the expectation for it was a slight gain. nikkei 225 is gaining, as was indicative of chicago futures all morning. three-quarters of 1% higher. the yen weakening. that at least will help out the exporters' earnings output. the primary challenge for japan, facing its biggest test not tomorrow sales tax wise, but the foreign money flowing out of the country. billions and billions are being pulled out, putting the stock market into a downward spiral. john dawson, we've seen the topix go from hero to near zero . >> that's right. last year, best performing market in the developing world. this year down by 8.9% in the first quarter alone. the second worst for hong kong. so the worst of a market
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performer easily. why? the plan not working as well as it would and the yen is stronger which is impacting exporters again. so the topix has a decline, if you like. yeff selling of yen, and that's the worst performance since the crash of 1987, so people pulling the money way out of the market again. i mentioned the tax equation, which will also impact retillers -- retailers. >> out of bonds and into equities last year, but what's needed to restore the faith here? >> in june they are going to revise growth. i think that will be good to reduce corporation tax, loosen the laws, and also
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accord. what you have again clearly the yen out of the control -- that's certainly what needs to happy. and the third arrow. they need to see structural change again, particularly with the lower corporation tax. >> in korea let's check out how the chaos by is doing. getting -- let's check out how the kospi is doing. a lot of expectation is on the u.s. for this week. all eyes on the u.s. activity data culminating in u.s. payroll friday. that according to a columnist we spoke to here at bloomberg. that's what they are going to be watching. that's what the markets are watching as well. the korean won strengthening.
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the aussie dollar is weakening off the back of that inflation figure, uncomfortably edging close to that 3% inflation mark. 200 in terms of equity this morning. .7% higher. other stories making headlines, taiwan's plans for closer relations with china has been denounced by hundreds of thousands of protesters. estimates to the size of the crowd, police say there were approximately 100,000 people, but organizers say there were half a million. this protest came offer -- came after a shelfing of a taiwan-china deal. >> dao
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has kung, a chinese ex-spy been taken into custody. more than $14 billion in assets have been seized. reround-up earnings for china's big four banks which are under pressure to make funds to reach tougher capital requirements. >> it has been a tough run for chinese investors the past few years, but some businesses have been money makers. the retail investor liking the chinese i.p.o. >> which they haven't been able to touch for 15 months. there is some sort of pent-up demand here. a resurgence in volume and we've also seen a firms, 50 firms
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hit the market for cash flow here between shanghai and shen-jin. we see average return so far i.p.o. hose that went in china. >> average return for an i.p.o. 54%? >> so far this year. that's about the number you get. compare that to the rest of the world, 9%. we also have a trend in the last decade which we have seen in china, so it is not exactly reflective of how the market has performed. we all know that chinese security regulators there has colusion that is typically happens when an investor goes around, spills the books. what they have done, they have put rules in place to make sure that a lot of these i.p.o.'s
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are priced reasonably. >> so you mean regulators are more at play than market forces? >> that's the other thing as well. there is always the other side of the coin. when the government says we want to give market forces a bigger part in determining where the prices should be -- >> and it's not happening right now. >> you could also argue when people collude it is not relevantly indicative of market success. >> well, yes, there is that. >> we have 48 firms listing in china. only 8 of them priced their i.p.o. above industry average. if you choose to do so, then you have to come out with disclosures and disclose the risk, sms that is a little bit of a red flag there. and obviously the firms are the losers here because they could have raised more money given how the shares have actually turned out. the small investors don't
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necessarily have the same, i guess, understanding. >> so in this i.p.o. basket it is not fair to say we are comparing apples to apples, cause the chinese regulators are really making this apples to originals. >> or apples to grapes. >> or whatever chinese fruit you want to choose. >> a little bit of slowing growth for some banks. a bank from the chinese northeast, second biggest in hong kong this year. mid-sized lender, harbin bank, $992 million. they have prized the i.p.o. at -- here's a fall-off of the rate. so you want to compare with what, i guess the current price uld be doing later on, it is $2.90 a share. >> thanks, david.
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still to come, the latest look t the industrial output. j.p. morgan says it should brace for negative growth in the second quarter. that's coming up.
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>> it may just be indonesia. the market has seeb a turn around making the jakarta the gent's best performer. if elected, the candidate says e will boofert spending. >> india. foreign investors are returning, and the rufi is on the rise on the assumption that has bottomed and
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finally getting under control. joined in the studio this morning. we are talking about indonesia and india. both of these nations facing elections this year. > getting more clarity both in indonesia and india. at the same time india and indonesia have undertaken the right decisions. the state ey moved curnsies and restored some credibility with investors. hope in s a lot of the new politicians and could drive their economies to greater heights.
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>> the question becomes, can they expand at the national level both in indonesia and india? the real question comes, when elections scum, can they actually manage to form a solid core in the coalition to return the government for the next four to five years. i think that's a critical issue. if you rewind it to political japan, and elections in there was i lot of politics at play when abe was elected. >> we are a long way away. nobody expected the g.o.p. to reach 20%. >> well, it is stagnating at 2.3%. >> we are seeing some companies lower rates off of that. in that way, it will take a
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long time for japan to return to a 2% efficient target. >> what do you think the danger is? do you think a big pothole in the sales tax will come tomorrow? > not so much. externally, we had the asian financial crisis, and back then, the government did not back the increase with a number of fiscal spending. so i think that is a mitigating factor. >> are you surprised at factory output today at negative 2.3%? >> these are soft numbers to be expected. >> it is not a soft number, it is a very harsh number. >> sure, the economy in japan and globally in asia has hit some problems in the first quarter. it does show there is a lot more work to be done with be-nomics.
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>> at the end of the day, the government does have a lot of high-level debt. >> that's from japan. we're not going to see the kind of money printing out from the federal reserve. that's all going to go away. but you know what might pick -- europe might pick up with some stimulus as well? >> well, that is an interesting question. they may be starting to rewind or more. my view is more, because at the end of the day, inflation is coming down, and the economy is recovering, but only at a gradual pace. if they can afford to be a little more aggressive in their current policy. >> they are worried about the threat of inflation hoor. nobody wants 20 years of deflation the way they have been in japan. >> yes, the lack of deflation does cause them to push ahead.
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at -- >> who will drive global economic growth this year? >> i think the u.s. is still very much in the driving seat, despite a harsh winter. china despite a disappointing quarter is not that at all. it is weaker than it used to be, but nevertheless, they will still be a huge contribute tore to global growth. >> what is the top investment strategy in this environment? >> i think the approach for the rest of this year, given the fact we have a global economic environment, gradually recovering, the feds clearly going to have interest rates rise, that will make make it more difficult for investment. >> you are still chasing equity growth? >> we are. >> you are not worried about any political events?
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you still have crimea. geopolitically, japan and china don't necessarily like each other. >> sure. they are worthy areas to take note, but if you look at thailand, they have done quite well in the first quarter, and yet they had a terrible political environment for the last three to four months. i think at some point, the markets will give way. countries will look at markets that are producing and making earnings. >> your favorite sector now? >> consumer -- industrials, even some financial, even though there is some volatility. i think selective investing in that space is still working. >> always worthwhile to have you come into our studio, and thank you very much for joining us this morning. >> up next, on the eve of the sales tax rise, we will get the view of one of china's most successful businessmen when
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"first up" returns.
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>> monday, march 31, and these are your headlines. to start things off in south korea, the country's economy showed another surplus. this time topping 4.5 billion u.s. dollars. o we've now seen a plus for --
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surplus for south korea every single month going back to january of 2012. now looking ahead to some key positions in asia, india expected to keep the benchmark rates unchanged. also tomorrow, we have australia generally expected to keep the cash rate at 2.5%, though there has been market chatter not to rule out a rate cut. interesting given the recent strength of the aussie dollar. >> finally to thailand, the political standoff has claimed its latest victim, foreign investment. they are seeing companies starting to delay new spending as the uncertainty tinds to crowd the business -- cloud the business outlook. >> first look at the euro. for the euro, we saw the first back-to-back losses here i
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think going back to november of last year. we always talk about the policy divergence. we can say the r.b.a. as -- in this case, the euro is the perceived policy convergence -- divergence, rather, between the e.c.b. and the fed. that's what we are following. 1.37. i mentioned the aussie dollar. one-month chart. there we go. recent strength 92. so just off the high a little bit. i want to show you something else. this is the aussie again. take a look at aussie-kiwi cross. we just about get up to the two-year chart in there, just to make that more clear. there we go, at 14. so again, policy divergence is going to continue to be a theme in the market. and let me end with the
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japanese end. two-month chart this week to mark the end of the prime minister introducing their plan . that's what we saw. we see this in a tight race for the last six months or so. sales tax.ahead of back to you. will raise ', japan the sales tax for the first time in six months tomorrow. this could be the prime minister's biggest challenge since taking office. spoke to one of japan's richest men, hiroshi mikitani, -- runs economy >> japanese economy, in the longer term, is going to
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shrink. that they will expand their businesses probably in manufacturing companies. electronic companies have been global from the beginning. gold, are moving to more service, retail. those companies are trying to expand their business overseas as well. it has been challenging for japanese companies to acquire e company in how to manage the integration. now i think they gradually learned how to do it, the japanese are becoming more international, they are bringing more non-japanese
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people on the board. so i think japanese companies are becoming more and more global. not just by japanese, but it is the key for the global economy, i think. >> what you are saying, is there a high chance -- there is are more ce -- they ready to become global players? >> i think so. not every company's c.e.o. will be japanese. maybe they there will become more non-japanese in the future. >> global leppeders facing legal action. we'll have the background when "first up" returns. stay right there.
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>> thunderstorms and light nipping. this is what it looks like at 8:30 here in hong kong after the rain subsided. we are an hour from the open in trading here. this is harbin bank. its trading debut today. raising $991 million. how will it do? well, we're watching. and you're watching "first up." >> industrial output
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surprisingly falls in japan. we had been expecting a slight rise. facing legal issues. >> and the clock ticking on the malaysian plane. >> good morning to you. i'm angie lau. 20 of the world's top banks have been ordered by a u.s. judge to face an investor lawsuit that accuses them of manipulating benchmark interest rates. it is a case with implications from london to tokyo. this is a huge problem. 00 nd it does affect $3 trillion. we're talking about home mortgages to the way banks do business together. that is the heart of the issue. we know the inter-bank offer rate. possible investigators --
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investigations by regulators worldwide. $6 billion paid by financial institutions so far. temperature turns out at issue manipulation of these benchmark lates rates. investor lawsuits appear to be oming along. now 20 banks must face this lawsuit. interest rates it feels were hort positions on euro-yen contracts. the euro and the yen on the tokyo interbank offered rate. >> i mean, the legal liability infinite. be >> it could be very large. we have zero comment.
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the fact a u.s. court has said the flute could go forward, it is likely there will be a lurry of lawsuits. this would be the class action under the u.s. statutes. >> that's just an investor. what about all of those other people whose mortgage rates or loans were tied to those benchmark rates as well? >> ok, to another topic that jpnew yorkian is also the focus of these days. >> bloomberg has reported that u.s. authorities are looking to the hiring practices in jpmorgan's china unit. the question is whether improper hiring practices took place, whether hiring government officials for example or corporate officials in china to win business. it is a fine line, really. as you expect in global
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business, that's how business investment works in many ways. you want to get as close to the source as possible and reap the rewards of having made the best connection. now hong kong's anti-corruption agency taking a look at this. we have learned from two people familiar with the matter that the office of fang fang, the outgoing chinese investment house, his office was searched last week by the anti-corruption body itex. it certainly does not suggest wrongdoing. he has not been publicly accused of any wrongdoing. he left the bank, according to people familiar, because he wanted to spent more time with his family. we know former asia-pac executives, one at least, was stopped at a new york airport
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by f.b.i. agents last year and questioned in connection with this hiring practice investigation. >> so really the back story here, and there is no report of impropriety, but the fact is there are shades of impropriety which is the hiring of these ry tightly connected what, rincesses as it deals with some of those banks? >> yes, and we know there has been more string -- we know jpnew york morgue hansian has lost out on some of these. there wra were questions about jpmorgan's employment of the daughter of one of these chairman. that is an example of what is being investigated here. angie, indeed, it is a fine line. you probably could look at relationships hired across banks across the financial
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industry and find something that might look like impropriety given the interconnectedness of people's networks, for example. >> but not if the deal is the quid pro quo. >> that is what the question is here. he important point is that p.morgan sought the u.s. securities midnight & exchange commission's opinions on this case. u.s. prosecutors were given fang in itten by which the bank supported the fang's son. a report in the wall street journal last week. >> great report. thank you. >> the search for the missing malaysian airliner resumes this
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morning despite poor conditions at the site. a fleet of ships in the area 1800 kilometers west of perth. we go to haslinda. we are in the fourth week and still we know so little. >> that's right. day 23, ang. the often racial includes the australian vessel which has been equipped with underwater equipment to defekttect the missing plane. time is running out. as you know, the black box will be lost after about 30 days. if they don't get a location on that data, they have to slowly use sonar to get a digital image of the bottom of the ocean, and that will be an incredibly long process to go through. today we heard from prosecutor tony abbott who said it is an
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extraordinarily difficult process to search for a missing plane. >> how about the data from the flight simulateor. >> experts have been trying to xtricate data from the pilot's cockpit that, includes the simula st. or. one u.s. official did not want to be identified. the official said no smoking gun has emerged so far. nothing sinister found. expect the f.b.i. to be done with its work on the simulateor in a week at the latest. >> just so you know, pictures of chinese families there with passengers. they still have no idea about the fate of their loved ones. and now we're hearing yet another emotional reaction here.
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>> they are angry, ang. they are asking for what they call the truth. several chinese relatives are also asking for a -- an apology from malaysia. they are also unhappy with the statement from malaysia's prime minister saying the plane crashed in the indian ocean. the families held banners saying "we want evidence, truth, dignity." also, "give us our relatives back." strong, strong words. the plane's disappearance has sparked anger and outrage in china. a travel agency there has announced boycotts in malaysia. some flights have suspended malaysian airlines flights. >> haslinda amin with the latest on mh370. >> you can watch us live wherever you are in the world
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on the bloomberg app. download it as simply as heading to the app store. market trading here in the asia pacific. let's head over to japan. nikkei reporting 1% higher, as is the chaos by. ause -- as is the kospi. australia coming out comfortably close to that 3% level, just ahead of the r.b.a. rate decision. expected to remain unchanged tomorrow. >> what do indonesia and vietnam have in common that japan and china wish they had? answer? let's bring in john dawson with the answer. >> what they have in common is a market in asia. what they don't have in common is japan 18 differences again last year. a bit of a concern. the yen is strong. exporters call for tax cutting.
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all these factors weigh into the differences. the kiwi dollar, two concerns for australia. the strong curnsies. look at the kiwi. as you see, it is at a 2.5 year high. 5.5%. clearly, the first to raise rates. march 13. they meet again on april 23rd. may even increase rates again. of course, australia, like i said, tomorrow on rates, no forecast expected. kiwi, australian dollar fighting for the strongest performance of the year so far. if i can go back to the markets again, china down.
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charts. you have japan, the nikkei and the chinese markets all facing declines. look at the indian markets again. a new election, maybe. in fact, rebound, jakarta with record foreign investors returning. the rufi on a bit of a rise. india, i can tell you, a bit of a gain, as you can see from that chart. indonesia on the schedule right now rebounding again to be the est performer in asia. will pass ain, spending. indonesia, india. the worst japan, china, and leading kiwi-aussie
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exporters. 3rd of april for the kiwi. >> time to look at some other stories we're following for you. >> the nikkei reporting the exchange considering the big board. tokyo fastly trailing the nasdaq and listed in hong kong earlier this year. panasonic may be ready to spend. they said the exporter will be spending nearly $10 billion over the next year. they may be focusing on housing operations. and a trading debut on the far north of china. shares of harbin. the lender rates just shy of $1 billion. the share sales come as china's lenders are being squeezed by slow economic growth and bad dad. those are the top corporate headlines.
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>> thanks, roz. >> got a bad case of monday-itis? our next guest could be the cure. up next, we'll here from the president of a resort and hear about plans for expansion on an island. permission to daydream coming up next.
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>> business in australia's barrier reef is expected to triple. here is a new debate about commerce vs. the environment. one of the world's greatest living treasures. paul allen reports. >> australia trades on this
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treasure. it is not only home to teeming marine life, it is a living structure of coral. it also has an uncomfortable eighbor. queensland coal industry. >> it accounts for 3 hundred hookup,000 jobs. > that is set to 0 grow as the coal port is expanded. it will soon be dredged into the world's largest coal terminal. shipping traffic is forecast to triple by 2030, just short of the level seen in the panama canal. it has not escaped the attention of the united nations which will consider in june whether to list this unesco site as being in danger. >> we are running a huge risk. we have the international community krned, unesco
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concerned. we are talking about a fragile pristine environment and we're talking about shipping. >> the council says there has only been one safety incident in 10 years. they also point to a study which says most of the damage has been due to extreme weather events and an infestation of star fish. >> there are committees wanting to declare the great barrier reef as in danger, but we need to understand their motivations. what they are trying to do is shut down the coal and gasoline exporting industries of queensland, and they will say and do anything to achieve their goal. >> qeensland has every reason to feel paranoid. it has been the target of
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greenpeace and its trademark campaigns. however, it is also attracting the attention of fund managers. >> investing in the barrier reef is shaping some of the importing decisions in queensland. developers raise a number of questions about how those companies are managing and what the future risk might be. >> with any development there are risks. in this case, it is being balanced with the future of the greatest living organism on earth. >> visitors to the reef soon to get a new place to stay. not so new. after a $50 million refushishment. we're talking about the one and only resort opening up on qeensland island. the president and chief operating officer is here in the studio this morning.
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her mission to dream indeed. of course a lot of people worried about what that dream means for the great barrier reef. are you concerned about it? >> no, absolutely not. we love the great barrier reef, and we are here to bring people from around the world. so many people have memories here. >> are you worried about the health of the great barrier reef as the mining sector looks to expand? >> no, we're really not. everything we do is very much environmently friendly. the barrier reef is a focus of the australian people and that is our focus and we try to give back in every location. >> so caymen islands.
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this is an iconic island. for 30 years visitors have come here, sands of the great barrier reef, and they stay with you. what is the experience you give them? >> of course the iconic hayman pool is being renovated. we are enlarging a lot of the rooms as well as the suites. we have an incredible family pool, which is new, because families are traveling together. that's something that's a greed addition to hay -- hainan. we believe couples and families -- families stay. no one has time, and they really want to spend that with their families and their loved oned. >> this is a privately held company, one and only, but of course you have taken the risk the last 20 years and really grew this luxury hotel sector in asia. what is the -- are the changes
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you've seen under your tuto rifment al? -- tutorial? >> i always believed in china. when i moved to china in the mid 1990's, there were very few luxury brands. we talk about launching in some very exciting locations. when i went there and brought my family, there were no international hotels. the rates were $50 to $75 at the time. >> that's the price of the meal right now. >> what a great location. a beautiful location. the people, the boats are absolutely fantastic. >> mark, stay right there. i want to get a lot more from you on just what luxury hotels mean. we will continue our chat with the one and only chief operating officer after this short break.
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>> welcome back. -- president and c.e.o. for high end? >> we're in the luxury space. expectations are very high, but we deliver. we have fantastic people. true, warm, unique service. >> you're not in china yet. >> we're not. we're very excited about one and only be in our first entry into china. we are very bullish. >> why, why so bullish. >> as i said, in my experience, i have always believed china is the focus of outbound business and our brand, and any luxury brand. ur industry or any industry.
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>> you are not worried about the anticipated slowdown? china? >> i really believe in china and i believe in the strength of china, and certainly in a luxury space. this is our guest and they are traveling globally. >> what is the luxury chinese traveler looking for that is unique? you're talking about tapping them in china? >> 90% of our business in china will come from china, but there will also be international residents that will go and stay. but chinese want to be recognized. they want the food to be very authentic, and this is very important to us. the important thing is service and recognition and that personalized service. this is what we are about at one & only. it is important to give the guest what the guests want the it. he guests want
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treat everyone like they are a c.e.o. of that company. >> well, looking forward to that. that's in early 2015. thank you for joining us. that's it for us for "first up." "on the move" coming up next. .
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>> hello, everybody. i am rishaad salamat. this is "on the move." signs of the virtual economy and a japan, can it handle the sales tax? it begins tomorrow. the ban is over. 3, austriahe week said there is no time limit on the missing malaysia an airplane.

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