Skip to main content

tv   On the Move With Rishaad Salamat  Bloomberg  November 16, 2014 8:00pm-10:01pm EST

8:00 pm
>> good morning, everybody. we are live in hong kong. i am rishaad salamat and this is "on the move." 30 minutes to go, the hong kong-shanghai connected ready for launch. into recession, japan's economy shrinks again. the odds rise of a snap election. g-20 leaders promising to create growth and jobs. news, thet breaking opening ceremony for the hong
8:01 pm
kong-shanghai connect. from the just pictures trading room floor. that is what we have at the moment. we seemingly are finally there. it is just half an hour away. market swinging open to foreign investors in a limited way. it is the hong kong-shanghai connect. we have dave watching the action from the credit suisse trading floor. what is the mood like there? >> good morning. as you can hear from the guys behind me, the decibel level is getting louder. we are entering 30 minutes before the open. that being said, a lot of focus today will be on the backend. a lot of investment and a lot of time, not only from the exchange, from brokerages, all
8:02 pm
throughout the industry, they have gone into making sure this open will be very smooth. i just want to mention as well, when we talk about these daily quotas, a lot of chat has surrounded that, is it big enough, i want to focus more on the overall. billion.oking at $3.8 just to give you a statistic here, if we use up the daily quota for the next 23 days, nearly into christmas, we will basically be using the entire quota for this program. we will see how much the appetite is based on our survey. 81% of brokers think that we will hit $3.8 billion. rish? >> david, we thought some of these issues would have been dealt with by now but we still
8:03 pm
have some of them. louink it is charles speaking at the hong kong exchange. is -- >> we are witnessing -- [inaudible] this would not have been possible without the massive fromt of effort and help everybody involved. on the hong kong stock exchange, i would like to thank the central government, the hong kong government, our regulators and our exchange. thank all the bodies who have worked on this project, and
8:04 pm
participants working for us. without all of these efforts, we would not be here today. as we can see on the screen, our friends in shanghai are beginning their ceremony as well. shanghai-hong kong connect represents a new opportunity of investment. the beginning of a new era. it is a privilege for us to all be here together celebrating this great occasion. [speaking chinese] >> the shanghai-hong kong exchange their, a string a new hering a new era
8:05 pm
as he put it. just got some outstanding issues, david. let's get back to david at credit suisse. they are starting to be a bit more tedious than buying. >> not exactly a lot more work but a lot more preparation has to go into selling. when you place a buy order in hong kong, all you need is a hong kong brokerage account. when we talk about selling, we talk about predelivery. the day before or a small window before the trading day starts. that has been brought up as one of the sticking points here. risk, justunterparty in case your brokerage goes underwater. there is also the issue of front running. that said, there is a fix that some of the brokerages and banks have put in place. a good example of that is adding
8:06 pm
clearing and custodian services in order for your clients to be able to place sell orders the whole day. it is the first day, rish, and because of the odds of that sticking point that you have to place your shares with your starts,e before the day today will only be about buying shares. that is all going to be buying at least for today. let me also mention, there is still no clarity on shortselling in shanghai. let's not take anything away from it. it is a breakthrough on a lot of fronts. we are counting down to the open for the hong kong-shanghai exchanges which happens in about 20 minutes from now. >> david, thanks for that. david ingles in the credit suisse trading room as he shanghai-hong kong connect gets underway. let's get more from the shanghai perspective. stephen engle is on standby for us.
8:07 pm
steve? >> time of the roof off international finance center, in the center of the financial district in shanghai, the rooftop of the ritz-carlton. it is a momentous day for shanghai, of course. for the international investors, this is unprecedented access into the mainland markets. the report is, the individual brokerage accounts and interest in the market here. for the chinese side, this is a further opening up of the capital account in china. further proxy for the reform process in china. also, there is a reason i am here in shanghai. china has ambitious goals to make shanghai by 2020 and international finance center. not to diminish the role of hong kong but to complement it. they have been touting this as a very important step. there is a quota and that will
8:08 pm
probably be used up quickly. it is a first step in the whole process. bringing institutional investors and individual investors into , of market has its risks course. this is a highly speculative -- retail-driven market. i talked to the chief economist with j.p. morgan chase and he said this, along with other programs in place are baby steps and should help lessen the speculative volatile nature of the shanghai-asia market. that is why the government is highlighting that importance of bringing institutional investors and the hong kong-shanghai stock connect program. thefully, that will reshape investment base in the stock market. for the global investor, this opens up more opportunities for
8:09 pm
different sectors to invest in here in the chinese market. if you look at the index in hong eighting off the wie that index is financial-related companies. they will now be able to invest in mid-cap, small to medium sized enterprises in various industries including consumer-related goods and industrials. consumer trend is the big one here. this gives international investors a broader avenue into this market. >> steve, thank you very much indeed. joining us from shanghai as we get the hong kong-shanghai connect underway. let's find out more on the story which is dominating headlines.
8:10 pm
>> hong kong bracing for legal action at any moment. papers published over the weekend confirm those blockades can be removed. andrew davis is here with us now. what are we looking for? published inwas the newspapers to enforce this injunction. >> the students lost their appeal to block these injunctions. they only focused on three parts of the protest area. little sliver of the admiralty protest. this doesn't mean they are going to clear out the whole thing. ,hat if they take down mongkok which the protesters are blocking some key intersections that are disrupting travel and commerce in a bustling commercial district, that will probably be the first step of bringing this to an end. police are assigned to help the court bailiffs come in and
8:11 pm
remove the barricades. >> pictures are coming through of the action in admiralty. you were saying this is to areas. >> the part of the admiralty area that can be taken down is just near one office building. that big a space. as you can see from these images, there are hundreds of tents out there. i don't think this initial clearing is going to affect that. once they start taking people off under threat of arrest, it is probably going to be the beginning of the end. -- it is just losing momentum. we do see -- no doubt, we will get something when it comes to the hong kong market as well. andrew, thank you very much indeed.
8:12 pm
another red flag from china, bad loads jumping this quarter, up by nearly $12 billion. sources telling us senior governor figures have discussed lowering next year's growth ofget on its current level 7.5 percent. japan's biggest banks are out with results. decline dueosting a to overseas lending. quite a different picture for smaller rhizome -- rival mizuho. you also had a decline in lending taking place. japan is back and recession. the economy contracted for a second consecutive quarter. annualized gdp or should i say contracting 1.6%. what does this do? it raises the odds that the prime minister will delay april's planned sales tax hike and call for a snap general election.
8:13 pm
john has been gearing up for the shanghai-hong kong open. about that japan story, the growth story, the yen falling on the back of that. john dawson is here with a look at that and more. >> japan right now is in recession. two quarters of negative growth equals recession. the economics means that the ricochet affect is -- prime minister abe will hold a press conference and delay the tax rise. this year, it went from 5% to 8%. clearly you see the reaction has been negative. only nine gainers, the rest are decliners. all exporters, engineering companies, all these are falling. the biggest gainer, toray
8:14 pm
industry, has confirmed that it won a one trillion order from boeing. it also makes cycles for the tour de france. australia is falling 0.5%. japan is falling the most with 2%. we look forward to excitement and a bit of caution, hong kong and china when it comes open in about 10 minutes time. we look forward to reaction to that. backed of these live pictures, this is the ongoing ceremony. that is the hong kong chief executive. the hong kong-shanghai connect is now underway. leung very much part and parcel of this opening ceremony.
8:15 pm
>> the new market access -- one, -- [inaudible] hong kong has the combined advantages of one country and two systems. we offer the unique feature -- [inaudible] we are the connector between the rest of the country and the rest of the world.
8:16 pm
it will be an upgraded version of hong kong as the connector to and from china. the government will now work with the central government. [inaudible] i offer my sincere gratitude. once the soft connect starts, there will be close monitoring by the government.
8:17 pm
thank you. [applause] on the hong kong-shanghai stock connect with gets underway. they are expected to be -- we have to take a break. we have a $2 trillion promise from the g-20. was the summit a success? we are going to head to brisbane. "on the move" is back in a couple of minutes. ♪
8:18 pm
8:19 pm
the g-20 summit concluding in brisbane over the weekend with the promise of $2 trillion in extra economic growth taking place by 2018 with a series of reforms. let's get to sydney.
8:20 pm
thanks for joining us. what did you make of this promise? what did you make over of this summit? >> from a economic perspective, i think it was a great bit of policymaking. we got a strong commitment from those leaders to try to lift global growth. the interesting thing from a macro perspective is the recognition that demand is weak. there is a lot of detail in here around structural reforms and infrastructure. that is important. a recommendation -- recognition that demand is weak. that monetarye policy would be easier for longer, but this talk of alcreased fisc flexibility may see more consolidation over the next few years. of the actual policy recommendations and propositions growththe $2 trillion of
8:21 pm
, that really is a political issue in the sense that the policies have to be implemented. here in australia, a number of oppositions are still trying to get through parliament. variousds whether the countries can implement the policies to get that growth. my assessment is that this is a good, strong policy announcement for the world economy for the next few years. >> many people have pointed to it being woefully short on some of the structures they are proposing. what is your view? the detail is obviously always important. the political ability to execute the policies -- each country has its own agenda and policies it has to implement. there is going to be this recognition that they have all
8:22 pm
committed to try to do something. >> one of the things which could boost credit in australia is this possibility of a china-australia free trade pact. we could get this this afternoon. what is your view? we are expecting it this afternoon, in a few hours time. i think the word in the last day or so is that it will pleasantly surprise. for australia, the opportunities in china's markets around financial services, particularly around agriculture, we will have to wait and see. this could be a strong, positive announcement for australia. for china, it is all about the investment opportunity. the ability to deploy capital into australia and lift some of the restrictions we have seen in place. it is looking good area -- good. >> great walking to you. we have to take a break.
8:23 pm
still on the way, japan is technically back in recession. what impact is that having on the weakness of the yen? foreign headlines right after this. ♪
8:24 pm
8:25 pm
>> these are your fx headlines. a seven-yearng to low as growth came in far weaker than consensus. the economy struggled for a second straight quarter with an
8:26 pm
unexpected contraction. -dollar, retail sales rising 1.5%. the finance minister saying that the qe price in the mid to high 70's is now sustainable. in brazil, the real fell to a etroglasr low after pt postponed its report on corruption and money laundering. those are the headlines this monday morning. chineseext opening, stocks. -- thehe show hong kong hong kong-shanghai connect. it is just moments away. ♪
8:27 pm
8:28 pm
8:29 pm
, thiss is the top story is the scene in hong kong. cy leung there. we also have the chief executive of the hong kong exchange on the far left of your screen. hong kong andg shanghai investors buy and sell shares. they are quoted northbound, pretty much completely filled up. is notouthbound, that
8:30 pm
filled up. that is what expected. the scheme expected to be northbound initially. , 13 billionota yuan. at theave a quick look start of this new session. on -- shanghai-stock shanghai-'s hong kong -- the shanghai-hong kong stock connect! the chairman will now -- [inaudible] i would like to propose a toast to the success of the shanghai-hong kong stock connect. cheers. [applause]
8:31 pm
distinguished guests, please stay on the stage so we have some photo opportunities. >> a bit early for champagne but that is what they are drinking at the moment. a historiclling it day for hong kong and shanghai. the two bosses get closer together with foreign investors having less fettered entrance to the chinese market. the retail class in china being able to buy hong kong shares as well. let's get to the markets. offhang seng was on a fly the back of the positivity surrounding all this.
8:32 pm
japan is taking a thumping because of worse than expected growth. john dawson has been looking at it all. >> very positive for the hong kong-shanghai connect, which was just launching. up by a percent already, way past the level of 2500. that is a good start. that is the hong kong-shanghai connect. what is that, doing? similar story. also seeing gains. the best-performing indices across asia happen to be hong kong and shanghai. question mark is the tax. there is a temporary relief of the capital gains tax for the overseas financial institution. also temporary relief for the asian investor.
8:33 pm
clearly, no capital gains from shanghai buying into hong kong. will that change? how will it change? how long is temporary? these are the question marks that maybe rattle a few nerves. let's go with the positives. both indices seeing gains. the picture so far for asia. if i add in the opening for hong kong and shanghai, there is china with gains now. hong kong is here, up by 0.2 thirds percent -- 0.6%. these three, you can see, the best performers of the day. performers, they are really benefiting. in china, we are seeing with significant
8:34 pm
gains. a few decliners but it is a positive day overall. the next-door story is, shenzhen. when will that connect? ,he tax question mark temporary, how long is temporary? >> absolutely. temporary is something we are watching for as well. john was saying there that they would temporarily forgive tax on of thismade on the back connect program. credit suisse is in the mix. david is there at the moment. and us about the atmosphere how that is evolving and whether we have seen any size of relief? to start innt october. many thought it wouldn't get off the ground. >> exactly. i was just speaking early on with the chair of greater china
8:35 pm
equities. she said that clarification that haven't play on friday when chinese policymakers basically said there's will not have to pay capital gains tax, that was a big relief for a lot of people. that is providing of a closed across the markets right now. with the atmosphere behind me, i can barely hear. the method will increasing. i am not going to tell you what the orders are not i am hearing a lot of corporate names. that just get some numbers for you very quickly. we did a survey. are expecting northbound activity, money flowing from hong kong to shanghai. you can't sell today. expectbrokerages northbound activity to be filled up. 50% think southbound, the bethbound daily quota will
8:36 pm
filled up. just to give you a sense of what is happening behind me, perhaps you can hear some of the traits that are going on -- for lack of a better word, very active. >> david, you are talking to some of the sales traders and the equity team. what are they talking about? >> just to give you some context, the guys behind me -- credit suisse came out with a few names that they mentioned. typical ones. ncent,ong stocks, te lenovo and other interesting targets for mainland investors. , and the hongda
8:37 pm
kong exchange which is up over 1%. that seems to be a fairly common theme. you look at the picks from other brokerages as well. bnp, you are also looking at tencent in there. automaker,ing at the dairy, i could go through the list but we would be here all morning. we will continue to watch what is happening across the markets. a fairly momentous moment in hong kong. >> the stock connect together's momentum. latest growth figures out of japan, not such good news. contraction taking place in the third quarter. we were looking for 2% plus growth and we got 1.6% contraction. >> we are in a recession, basically. expected gdp to
8:38 pm
move into positive territory. >> in the previous quarter, they had to revise the contraction even worse. >> it was -1.6% the previous -1.4%. and now annualized, that would be -1.4%. it was a rebound from that 7% contraction. >> that was actually revise even worse. does this mean we get a snap election? >> also questions there. basically, we had heard top government officials saying that if gdp comes in lower than 3.8%, there was no way they would raise the consumption tax next year in october. we have to wait what happens for that. we have local media saying that abe will hold a news conference tomorrow on the tax hike and about dissolving parliament. he is seeking a new mandate to boost abenomics.
8:39 pm
>> thank you very much indeed for that. we will get more on this and bring in our bloomberg view asia columnist in tokyo. technically back in recession in japan. sherry has been talking about this tax increase debate. how is that shaping given the news we have this morning? >> the tax increase is dead. i don't see any scenario where the prime minister can go ahead with this. what i find surprising this morning is that people are surprised. 1997, the last time japan raised the consumption tax, we had a recession. a lot of economists a year ago were arguing that raising taxes was economic suicide. here we are. this recession is a totally self-inflicted wound. here we are. the question is what steps we need to take to get out of it. it worries me that we are
8:40 pm
talking about having a snap election. has thenister abe public mandate to accelerate abenomics. he just has to do it. he has the public mandate to avoid raising consumption taxes. >> this is all about their snap election. is this not election for the reasons of getting -- or is it it only bece or what done because he wants to shore up his position within the party? certainly he is trying to shore up his position but he is a prime minister who has been around for almost two years. majorities in both houses of parliament. he has some public mandate. the japanese people want him to get on with abenomics. the reason they are not supportive is because they haven't felt it. abenomics is all central bank liquidity. they haven't seen the steps
8:41 pm
taken by the government to loosen labor markets, make the economy more competitive. needs thethat abe public mandate, he just needs to do something. he needs to act on his plan. this election, i think, is a waste of time. nexte going to spend the four weeks campaigning and looking to hold an election for a mandate he already has. >> what about the prime minister himself, and mr. cu roda -- kuroda. it raises all these questions about whether they will get back to sustainable growth. what are people saying about that? >> japan is not going to get back to sustainable growth unless abe does his part. central bank liquidity is not enough. the boj has probably done more than it can at this point. what does abe do?
8:42 pm
kuroda was saying to the prime minister, it is your move. if abenomics all goes bad, kuroda will be the fall guy. that dayda was doing was passing the baton and saying, i've done as much as i can without crashing the market. does have a public mandate to shake up the economy and make things more competitive. he is just not doing it yet. >> great talking to you as ever. mr. shinzo abe in the mix. up next, we have been talking about it all day. it is this historic moment for traders. the shanghai-hong kong connect is up and running. "on the move" returns in a couple minutes. ♪
8:43 pm
8:44 pm
8:45 pm
>> this is the scene at imperial palace. 225, investors reacting badly to that news coming through at 8:50 a.m. local time. that was the third-quarter growth in japan showed more negativity. the economy contracting by 1.6%. an advance of 2.2% was expected. putting japan into a technical recession. sydney at the moment also lower. 0.5% coming int spite of talk of a free-trade agreement coming through between china and australia later this afternoon. expecting they could be more wide-ranging than anticipated. singapore, just seeing how the through after a very lackluster session in new york. just down by about 0.2%.
8:46 pm
here in hong kong, positivity. the hong kong-shanghai stock connect gets underway. the hang seng was up. we are now off by 0.1%. the free market was 0.9% higher. we are falling back at the moment with quite a large delta taking place. come about as we have this connect system and acted for about 10 minutes. let's get back to credit suisse's trading room floor. they've it ingles is standing by with our next guest on the 91st floor of the itc in west kowloon. did you see me peeking out the window? we had a shot of the itc. i was peeking out the window. we are down about 0.1% now.
8:47 pm
joined byontext, i am the head of china research at credit suisse. thanks for joining us. when we found out this time last week that today was going to be the start, what was the most asked question from clients? what are the clients going to do? everybody asked this question. >> what did you advise them? what is the best advice leading up to today? --you should consider [inaudible] i understand that quite a lot of people are concerned about issues. some settlement issues. >> do we expect more activity northbound, more activity southbound? what is your general feel? expect that there
8:48 pm
will be more northbound activity than southbound. the major reason being that institutional investor base in china is much bigger. >> i think the general agreement right now is we'll see this narrow. kong moremake hong like shanghai, more a traders market? or will it make shanghai more like hong kong, more and investors market? >> in the near term, both. the bigger cap stocks will be increasing more like hong kong in both markets. smaller cap stocks in hong kong, i think there will be more trading money coming here. very comes at a interesting time for the chinese economy.
8:49 pm
we are looking at the largest challenges and problems for the macro economy that we have seen in at least a decade. for those looking to increase ,llocation to the mainland northbound, what do you suggest? as far as industries. >> we like household appliances, auto and traditional medicine. these three sectors. generally speaking, they are more geared towards the consumer. not so geared towards the overinvestment. >> why traditional chinese medicine? >> actually, this is a great exposure. financials,at their their returns are very high. they have a very loyal consumer base. faith in chinese medicine. >> i also use it.
8:50 pm
>> if you are a long-distance runner, what is good to prevent cramps? >> [indiscernible] >> ok. , top three best plays, top three to avoid? three -- some top of the regional brands. some very unique financial and consumer brands. >> what do you avoid? >> what to avoid in hong kong, i isnk -- retail in hong kong probably difficult. >> so we have to wait and see how this all goes. it is very early. there you have it. the head of china research here at credit suisse. back to you. >> thanks, david.
8:51 pm
looking more at this hong kong-shanghai stock connect. it is not the only thing making headlines. we have a japanese economy contracting, very much differing from the economist view. on top of that, the g-20 summit wrapping up in brisbane. the latest on all those stories when "on the move" returns. ♪
8:52 pm
8:53 pm
>> the main evidence we are following this week, looking at china property prices tuesday. downturn.road china is going to stake its claim to shaping the future of the world wednesday. i-- wednesday.
8:54 pm
its first world internet conference. softbank is expected to attend. cyber terrorism and e-commerce are expected to be on the agenda. handbags going under the hammer at christie's in hong kong. this is thursday. among the highlights is a birk in. ,he auction will include wine art and watches as well. the end of the formula one season. the race will award a double point. the two mercedes drivers are in contention. let's just check in on some of the stories making headlines around the world. the white house has confirmed that an american aid worker has been beheaded by islamic state fighters. the croup -- group released a video.
8:55 pm
the victim is the former army ranger peter kassig. britonsr americans and have also been beheaded. ukraine, the wreckage of flight mh 17 is being removed from the site. it will be taken to the netherlands where a scientist will try to determine the cause of the crash. new pictures have been released of the immediate aftermath of the disaster. said the west blamed pro-russia rebels. european space agency says that the comet lender completed its primary mission before running out of power and falling silent. sent landing last week, it data back to earth, however it did have a bounce on landing and ended up in the shadow of a cliff.
8:56 pm
its solar panels are in shadow and cannot recharge the battery. that is it for the first hour of "on the move." in the next hour, japan surprisingly falling back into recession after two consecutive quarters of contraction. we are live in tokyo. ♪ .
8:57 pm
8:58 pm
8:59 pm
>> hello, everybody. i am rishaad salamat. you are watching "on the move." japan in recession. disappointing data casting doubt on a sales tax hike. lower, the regional benchmark snapping a six and a gain. striking a chord. the connect is up and running. minutes, oh we0
9:00 pm
will be live. course, we are right here in hong kong at the moment. n andlook after the ye the data was wildly off what economist were thinking. 1.6%, aa decline of technical recession. -1.6% was the actual. 2 quarters of negative growth. that is the facts. weaken.tion, the yen to you can see it has strengthened a bit. what does it imply? regional reaction was, oh, my goodness. a recession. that it the realization was not abe's promise and they
9:01 pm
would decide on the next -- next sales tax rise whether next year based on this and this as you heard. and whether to pass it on. it cannot be next year. it is in a recession. when they did last time, it triggered a recession then. no surprises. the government scratching their heads. reacting in kind, a bit of strength. it means a sales tax would be delayed. that is the yen story. the nikkei if i can. pull of the the k if i can. down 1.5%. gradually declining. exporters are feeling the pinch. nikkeismall gang of the 2025. thenly a small gain on nikkei to 25.
9:02 pm
let's go to the asian markets. as you can see from the map, there is the nikkei there. open higher on the connect. then there are the declines. reverse across the qe market. the rest are seeing declines. >> we will keep with the japanese news coming through as john was talking about. we are in a technical recession and what is the world's third biggest economy. the economy specialist. this is a horrible number. economist were looking for expansion. why isn't the question, what is the big factor? , what is the question the big factor? >> incredibly surprising number and i feel like i was saying it three months ago the same thing,
9:03 pm
sales tax and consumption. the main reason why the economy has fallen into recession. 0.4 percentrose since the last quarter so it is falling. , not really enough to drag the economy down it too real growth. what happened is as people were cutting their consumption, companies are cutting production was stopped companies expect that the sales tax hike to be over. -- they try to cut in the second quarter, not enough. they basically cuts production so they could draw down in the third quarter and that is what dragged down. theontributed minor to headline gdp number, dragging it into a recession. the sales tax, back consumption data, and that was -- that was
9:04 pm
so unexpected. people did not think it was going to happen and continue for six months. >> james, we are talking to him earlier. he said any further sales tax hike is really dead in the water . what are you hearing? >> the government is saying they are postponing and will postpone it. people are saying different things. will likely be postponed until april 2017 and by that time government spending on the olympics will take affect. time,pefully by that consumption would have picked up again and people would be more prepared for a hike in sales tax. a lot of people saying the hike plans is dead in the water. , and economyer editor. it is not just about that. with a covering of the shanghai and next. a wave of optimism.
9:05 pm
sanguine as were head into the trading day. thene thing we guarantee is composite is always so volatile. the balanceee from on friday and today you will see an impact. it rose, it allows its games there. flat, unchanged. below that crucial marker of 2500. whathile, the hang seng gain and dramatic game, and it is trading lower. technical levels have been abridged and less you which stocks have declined. on the hong kong market, more easy to read for me. see financial can company, china resources, apex
9:06 pm
is also down they are heavily weighted. a few gainers. , the declines that are waiting on this market." -- on this markets. the impact of china's markets which are opened. encouragingly strong. by doing this at it is magically produced. magic, when it comes, it comes. financials, there they are, suffering the biggest blow. really about financials. look at it in detail and breaking it up, banks, financial services are down 1%. the other is the connect story. the details behind it. three are up. seven are declining.
9:07 pm
securities, these are all shanghai composite. [indiscernible] of course, jews are examples of the biggest. how all right is that. -- how i write is that. -- of course, these are the examples of the biggest. beingabout the connect here, after six months of talks and test and delays, it is finally here. "on the move" is on the move. we have david. he is on the commerce exchange. we have our china correspondent, stephen engle, having a look of what is happening in shanghai. let's go to david and the impact this happened over the moment and likely to have looking ahead. >> rish, we have to put it in
9:08 pm
context. assuming, yes, we maxed out ofry day, the daily limit cross-border purchases and we do that for 23-25 straight days and you take that total and you put it that against the size of the marks." -- the second-largest market. it is quite a lot. nobody expected we will see that , a shot in the arm. if you look at what is happening, just because everybody was ready. a lot of preparation that went into this. we had six months and not that long of a time to that every online. it does not mean every body will pull the trigger. what are people saying? where will the money flow mark? it seems to be more northbound. the biggest investors are outside hong kong. hong kong has always been an
9:09 pm
open market. it's about china and shanghai opening right now. we did a survey before this morning and 81% other brokers we asked thought we were not see a daily quarter for tomorrow. be maxinghink we will our daily quota of money from shanghai to hong kong. course, it seems -- look at where the hang seng is. rish? >> following the low the line. what about technical issues that need to be ironed out? those selling those buying? >> that used to be one that constraints. today, theg into number one concern was the capital gain. wolf orders get taxed -- will foreigners get taxed? of uncertainty
9:10 pm
on friday, off course, before we went into this morning. chinese authorities said no tax, no problems. the other one seems to be the selling. it is easier to sell than a five. -- then buy. [indiscernible] have the issue of front running and counterparty risk. let's not editing away from what is going on. it is looking to mitigate and that step. we will see if they do so over the next year or so. rish? >> let's get on the northbound train now. there with what it means for investors there as well. >> good morning. we are here at the top of the -- and the center of the financial district.
9:11 pm
right.nglis is i want to draw down into the bigger picture. forget about the fluctuations we are seeing, the biggest feature is the opening of the capital account is another step after institutional investment program in the widening of the quote is. and now, we have the shanghai exchange link which is going to broaden the investment a's and the market. it is another step in the opening, even though the quotas are fairly limited. a 4.2 trillion dollar u.s. stock market in the world's second-biggest economy. economist,, goldman is telling us it is very critical for the global investor to diversify to a market like this that is not necessarily asked tied to be fed or the u.s. or what is happening in europe.
9:12 pm
he said it dances to its own domestic agenda. it'll be interesting to see how it plays out. i spoke to the jpmorgan chase chief china economist as said many global investors are looking at this direct connect as a proxy to the reform agenda in china. markets are acting positively not only because you have a more broader set of choices but also we see it is chinese reform. these are very important sentiment behind it. you have -- [indiscernible] they do not care as much where china goes, but wants to see the stress reform is happening. he also tells me that the cost of the limited overs here, this is the first step and we'll see how much of the quote is taken up and how much interest
9:13 pm
there is. this is what china likes to do in their reform process and opening up throughout history as they been opening up for the past 30 years. the a baby step in see reaction and expand or pull back. >> we have been hearing the institutional money coming from hong kong and that will be on the northbound train." we are hearing about the retail in china. what does it mean if anything? change as significant there are limited investment opportunities in china especially with the property market curbs. the stock market is like a gambling casino. a retail heavily driven market and highly speculative and information traits pretty freely and openly. that is a lot of disclosure issues in this market. you will get more institutional funds in an broader-based and
9:14 pm
how potentially as well domestic chinese fonts coming in and stabilizing. does it offer more opportunities for the mailing investors? perhaps, yes. perhaps more stability. we'll have to see over time. >> steve in shanghai. we have to take a break. technology is changing the way you connect with your customers. we will tell you after this break. ♪
9:15 pm
9:16 pm
>> we are coming live from bloomberg. you are watching "on the move."
9:17 pm
many businesses use of the cloud to stay ahead of the game. our guess is talk about mobile holes -- tools. he runs the operations for salesforce and he is in singapore. let's find out more. salesforce is the name of the company and what does it to, simon? >> thank you for having me on this morning. it is a leading provider of cloud operations whether sales or service or marketing or organizations build and take advantage of the cloud to streamline their processes. >> give us some examples. >> sure. we see many examples across the region here. a great customer and organization like financial but who wants to change in the way they connect with our customers and noticed that consumer behavior was shifting and people do not want to go to breaking a holes anymore at look for more
9:18 pm
flexibility. we were able to work with them to deliver a seamless interaction whether a call center or in branch visit. really changing the way they were undressing the customers' needs. at allowing them to tailor. we think that is exciting. it changes the conversation at the bank. ok. i want to talk about the airport. have you worked with them as well? it has been voted the top international airport. what have you done? >> is a great story. and organization that focus on putting the passenger back in the middle of the experience. and if they were looking for a central platform to bring on the feedback in touch question data,
9:19 pm
whether the call center or customer service or whether the kiosks you see, those fantastic little touchscreens. all of the activity going on or the agents. bringing everybody together on one platform was for them a big objective in focusing on that customer and that passenger. we were lucky to be at the center of how they did that. i think it's fantastic that they recognize it. a great testament to the focus they have put around their passengers. >> right. what about this nation of mobile? how does a mobile actually impact your business? and it is part of the adoptedgrowing and most form of looking at things on the web. >> yeah, mobile is absolutely
9:20 pm
critical to everything we do. and coupled with social. the way people use their mobile phones, is the dashboard to their lives. all of your applications and the ways you want to connect with an organization and mobile first as well. a couple of weeks ago, we launched our new project, the analytics cloud. , which is on big data how do i bring the big data to the individual? put decision-making in the hands of the individual. the waynsformation and people use mobile is very exciting. be 5 million smart phones by 2017 and it was change the way organizations need to think at most companies, that is a great opportunity. >> simon, one last thing. here,ternet of everything
9:21 pm
tell us what that means for you and what it means for corporate. everything ist of about connecting products and applications.ces, everything can be connected across the internet. at the opportunity it presents for organizations to change the way they do business. we see so many amazing cases whether comic-con wearable technology and pushing information type -- in real time like the samsung care or fit, pulling data. or working with an organization like phillips, connected all of their devices -- devices across the globe to allow central customer support, central collaboration and the philips people to deliver better outcomes. it has opened all of that up and created a large amount of data
9:22 pm
as well. so2020, 50 times more data it is important that organizations think of these two things together. from salesforce. much more on tech related news. all of the key events of the week including china's first world internet conference. ♪
9:23 pm
9:24 pm
9:25 pm
>> a quick look at the main events we are following for you. china's property prices on tuesday. a downturn in all but one city and that is a southern coastal town. and the world wide web on wednesday at a holes the first world internet conference. it is in a historic town. cyber terrorism and e-commerce expected to be on the agenda. christie's in hong kong on thursday, a tangerine ostrich birkin is almost $25,000. and friday's season the start of the final weekend of the formula one season. the drivers will championship.
9:26 pm
the rates will award double 2 mercedes drivers are in contention. a look at some of the other news. the european space agency said the, it completed its primary -- said the comet completed its primary mission. 67p.nded on all of the data was sent back to the earth. it ended up in the shadow, which means its solar panels are in the shadows and cannot recharge the battery. ♪
9:27 pm
9:28 pm
9:29 pm
>> stocks in the asian pacific break a six and a gain. japan in a technical recession. a free-trade deal. up.stock is that is what we are looking at. john dawson has a look of what is going on market wise. quickly turned into well, pardon the reverse, i suppose.
9:30 pm
nearly 1.8% and declines. , complete.ion the disconnection is that the reverse of what worthy games. gain what were the significantlys lower and falling by the minute. . drag lower. this is a two-day chart. a bit and down and down. it is down by almost 1%. thanks and today. -- the hang seng today. it is off. the technical level, that is crucial. 2500 and now it has gone down. the hang seng is really suffering because they have more property stocks.
9:31 pm
that's a have more financial stocks. example,hart for composite and shanghai, financials are the biggest decliners. of the biggest followers, hang seng and you can see from this chart, look at that activity. financials are dead. industrials are following. financials are down. services, financial real estate, insurance are down. a look at this. the brokers, 2.5% decline. the biggest of them all. exchange, the exchange itself is the biggest awaited decline. , a consensusu
9:32 pm
about the taxes that have not been announced yet. that is the hang seng it really quickly and the shanghai composite. you can see the story in a sense look at financials and the financial services, 1.2% and the brokers that have fallen the most. there they are. securities, industrial securities and the big brokers. and high security. avery strong theme, disconnect theme on the china-hong kong connect. we go over to the nikkei. it is one the biggest economic storage. it is opening lower and gradually, gradually,
9:33 pm
-1.6%y, it is all about a third-quarter decline, which means the word "recession." in fact, a lot of people surprised by this. it is the same recession. same format. the format of the next says -- sales tax rise due in october of next year. abe must confirm it. >> thank you. a decade of negotiations, austria and japan on a deal of a free-trade. that australia and japan on a deal of free trade. allen has more. what do we know about this agreement? rish, we will get a declaration of intent which will
9:34 pm
be signed between australia's trade minister and japan's e-commerce minister. end tovely, it brings an it almost decade of negotiations. as to what is included, it is will be removed on 95% of austrian guts heading into china -- goods heading into china, including call. and gary, another big winner. already, we are seeing taking advantage of it. the particular countries announcing an ambitious plan, a dariyry concerned -- concern. there is nothing left for sugarcane farmers or rice. there has the complaints on
9:35 pm
local media that they will not get a piece of the action. whenxample of new zealand they signed their free trade deal with china in 2008, two-way trade has doubled and tripled from australia and china, $150 -- 150 billion a year. set ambitious targets that want to raise growth by 2.1%. seems like a bit of a tall order, doesn't it? >> it does a bit, not ready to face. where do organizations make their profit? where it is sold or created or manufactured? the stampede of taxes for the legal books. 2.1% extra global growth over the next five years. well, intentions are all about
9:36 pm
one thing. the initiatives they need to meet to satisfy the imf, sonic in his the target. , theas the summit began prime minister tony abbott was complaining about having difficulty of getting measures through. that was unveiled in may. japan slipping back into recession. still the optimism they can achieve is what president obama had to say. >> all of the g 20 countries announced strategies to put people back to work and initiative by building infrastructure. our nations abroad commitment backup bring more women into our workforce. we took new steps to warm strengthening our -- toward strengthening our banks and stopping tax evaders from hiding behind shell companies.
9:37 pm
>> that press conference was barack obama. el fencingent has been removed. the leaders will get back to work trying to achieve those lofty goals. >> thank you. more room to move thanks to the slump in oil prices. it should leave -- to limit the opposition of people using cheaper gasoline. minister the finance said in the next hike will be less than 25 says a leader. liter. a >> it is the president called. we are going to do it.
9:38 pm
before the end of this year. >> what kind of increase are we anticipating getting a where the oil prices are now? about 30% lower this year. >> we are watching closely what happened with the national oil supplies, as well as the price of imported fuel. it is important. of course, -- >> give us a sense, what are you looking at? lowered -- what was raised before -- way before, way before september. >> we know you have done some type of calculation. in types of revenue, how much can be added to your budget? allocationrom the and 2015.ecuted
9:39 pm
the amount in terms of let's say -- emission would be more than 100 trillion rupiah. >> you said you expected growth to increase significantly next year, while? you are planning to increase fuel prices. >> maybe the higher economic growth in 2016. >> you are revising what you said before? >> no, no, there might be a misconception. 2015, it will be 54 -- 5.5%-five .8%, which is higher which we would have in 2014. this year, our growth might only be flight 1%. this year -- only the 5.1%. subsidy, we the
9:40 pm
hope that we have elevated in terms of development and will 5.8%.elp the growth to in 2016, we hope we have all the fundamentals ready for us to have the growth of 7%. >> investors are keeping a close eye on the rupiah. are you comfortable? >> the most important thing of the rupiah is of course, it will bank. central from our side as a fiscal policy, we have to make sure that the budget is sustainable. and secondly, through our second quarter, we have to ensure we can reduce the need for import of our energy. and in this area, where quite comfortable working -- we are
9:41 pm
quite comfortable working with our central rank with the rupiah and we hope it will be strengthening. >> that is the envy -- indonesian private -- finance minister i should say. ok, a look at other stories making headlines. the white house has confirmed an american aid work has been beheaded by islamic state fighters. the pictures have been eisen decade and the victim is former army ranger, peter kassig. 2 britainericans and have been beheaded. the wreckage of malaysian flight 17 is being removed. the pictures being released of the aftermath of the disaster, all twitter 98 people on board died-- 298 people on board
9:42 pm
when he came down in july. controversial u.s. base hit by the results of the elections for governor. he said he would block construction of the base by denying [indiscernible] decades of negotiations, a to move the base. -- they have agreed to move the base. we have to take a break, taking a wider view. what the blackhawks are doing to attract more fans. ♪
9:43 pm
9:44 pm
>> a look across asia. cricket dominated the sports headlines. billion,al audience 04
9:45 pm
one of the highest profile teams say asia is a key market to tackle. a campaign to bring it. welcome to "on the move." an amazing proposition. >> it is really exciting. globally, rugby has rail -- 6.6 million people playing it. it is a played in about 119 countries. if you look at the calendar, you have a rugby world cup next year. this -- some really big event and we believe asia is the next territory. >> how do you build it though? how'd you get people to play? there are a lot of players. let's not underestimate.
9:46 pm
there are more in asia than new zealand. about right.s there are about 170 thousand in singapore, sri lanka, and malaysia. that's is a good place to start from. how do you grow it from there? it is important that you see some of the big rugby brands like our other teams. and you buildts the excitement, that awareness. we have been doing that recently. team hadur indigenous they spent the past three days in singapore doing that promotional activity. that activity is a good place to start. is you canr aspect get a lot of players and a lot of people watching. clubs. many football like the manchester united, they
9:47 pm
can have the biggest followers. how do you monetize the people who are all in the game? -- following the game? >> that is a big part. thinkand foremost, we fans are fans so we have to treat them like since. and how can they will, customers are smart attending games -- and how can they become customers? -- attending games. they sold out of the stadium in chicago. it ran on a major network of their. 3:00 on a saturday afternoon which is a good deal for any sport in the u.s. market. that is really important in terms of the commercialization of rugby. from there, the opportunity really to bring on businesses in the region that want to associate with export to hasbro
9:48 pm
realtum, -- that has momentum, a good product. that is the other thing we are doing at the moment. and to help them achieve their marketing objective by associated with rugby and in particular with the all-black brand. >> a sport that's traditionally played in late autumn and winter months. that is -- something that happens. you are in a place like average annualhe temperature is 32 degrees celsius and i must be a major obstacle. getting others to play. we saw it last year. good test ofs a professionalism and how they can adapt to different
9:49 pm
environments. we have six teams that extend the all-black the brand. , andll blacks, all-black 7 the women's team. 16se guys will play in about countries in 30 different cities. they have to be adaptable in countries from dubai to moscow from japan last week through to london. they have to adapt to the environment. cup coming up and you have the all blacks as your favorites. yeah, the world cup next year into the u.k. it is going to be massive. it will be the largest for the event on the calendar next year. a lot of tickets going. the all-black for the last three years have had one thing that
9:50 pm
they have constantly had, a for agy behind, preparing world cup. we do not think they have peaked too early. they have been number one for five years in the world rankings. they have to continue deposition and take nothing for granted and it sure -- in short in any form or anyway. >> you would say that. nick from new zealand. joining us from single or. up next, -- could be the key ingredient to solve the economic problems? we are back in a couple of moments. ♪
9:51 pm
9:52 pm
>> these are the top stories. japan is back in risk -- and after the economy contracted for a second straight quarter.
9:53 pm
gdp fell 1.6%. the news raises the odds all prime minister shinzo abe delay hikeril plant sales tax and called a snap election. after delays and has, the hong kong shanghai connect has begun. limit and3.8 billion allows for investors access to mainland chinese stocks for the first time. the g-20 has wrapped up with a commitment to growth and jobs. by aeaves agreed collective $2 trillion by 2018 -- the leaders have agreed to boost by a collective $2 trillion by 2018. the u.s. is bringing its stimulus programs to an end while japan and europe are taking action to ward off deflation. those are the top stories.
9:54 pm
>> the indian prime minister has a challenge as he pushes to build more highways. international investors can play bonds.through masala how does this all work? corporation is the bond bring issuing contact to increase foreign investment in india, mobilizing capital markets for infrastructure development in the country. rubyrks the first time bonds will be listed on the london stock exchange. from the bonds which is called masala under a program [indiscernible] to raise funding. earlier issue on maturity.
9:55 pm
eee.onds rated compared to to work -- 2.3%. nations, the modei's government said they are increasing infrastructure across the country. the economy which has slipped to one of its worst growth rates in over a decade now. the government explore other funding options to attract global capital to revamp growth and highways. back to you, rish. >> thank you very much. joining us in mumbai. that's it for this monday edition of "on the move."
9:56 pm
we will recap news of the day. disappointing economic data out of japan and that's the connector. ♪ . .
9:57 pm
9:58 pm
9:59 pm
>> beautiful day in hong kong. we are live. this is the middle of the trading day and this is "asia edge." disappointing data bringing down. news sending stocks down. asia-pacific stocks breaking a six-day game. and signing a deal.
10:00 pm
announces free trade talks. >> also coming up this hour -- hoping to hit the right note, the hong kong-shanghai stock connect finally gets up and running. plus i'm another red flag from china. look at the slowing economy as banks try to limit lending. and freedom on fuel. a key election pledge. all that and more in this monday edition of "asia edge." >> i am john dawson with the markets. a bit of a mixed bag. china is so volatile. it dropped down


info Stream Only

Uploaded by TV Archive on