tv Trending Business Bloomberg June 15, 2015 10:00pm-11:01pm EDT
china's leading car handling apps are seeking $1.5 billion from investors to fend off the num -- uber. that would make it one of china's most valuable startups. plus, uniform response. social media gives its burn it on china airlines outfits. there are plenty of star trek comparisons. one user says "it is captain kirk." you can let us know what you think by following me at twitter, and don't forget to include the hashtag #trendingbusiness. a decline in the yen after an admission to parliament this morning. we are joined for the details. what did he say? >> quite a turnaround by the
governor this morning. he is trying to walk back what he said last week. said that further yen weakness is unlikely and that has had the effect of telling them to change their views. it probably wasn't quite the message they wanted to send out. theirried to clarify thinking on what he feels the exchange rate is. is that weory here know a weak yen is such an integral part of the economic integrity for the bank of japan. currency, the weaker has been a help for them in terms of boosting export in the key japanese factories, in turn generating employment and activity due to wage rises, trying to boost inflation in an economy that has been so stagnant. a step too fart
last week and economists responded by treating the forecasters, saying that near-term forecasts are less likely. onto theperhaps bring table -- the doj still has much more work to do. inflation is still a long way away from the 2% target japan set, and it has been two years since they launched a massive ofd buying program, part trying to get inflation back toward the 2% target. they are nowhere near that now. he is saying that the yen might be week, but it is still an overall good thing for the economy. economists are saying that the to wait forll has the stimulus table but after everything the bank of japan has done, it might be another trigger to step onto the field again. i guess only time will tell. shery: thanks.
many were surprised by that boj comments last week. let's take a look at how the markets are reacting. what we are seeing today is generally a decline for shares around the region with a few notable exceptions. wellington and sydney, the asx was positive, philippines coming on with a nice gain. jakarta is seeing an advance. indonesia hadf interest rate hike this week. and fomc begins its monetary policy meeting later today. that is consequential to asian-pacific emerging-market, in particular giving emerging markets. currency -- all of this is important relative to what's happening in europe because of that uncertainty. impact today,n not only on equities but on currency.
bond risk has been rising across the region, and we are closely watching hong kong and shanghai. this market is seeing a pullback today, an extension of yesterday's decline. i want to bring you up-to-date on movers around the region. we will continue with the hong kong and shanghai seem. these are stocks to watch -- civic security. a turnaround. shares are up by .5%. selling shares to investable. lee bought 300,000 shares on thursday. and crrc, the rail giant created in china, a major railway company, a global industrial powerhouse. they took a big tumble today -- 5%. that a bigeports
expenditure -- it doesn't explain such a big drop in the share price. enthusiasts out there, several cases of airline news that you may or may not be interested in -- australia is advancing to $500 million with ge for it's just our unit engine. airways and taiwan are buying a handful of freighters. we just talked about the uniforms there. airlines is down 1%. it is a bit weaker than expected. it is not a singapore airlines unique story. shery: i love how you described it, serious uniforms. over to australia
because the australian dollar is stabilizing after the central bank called for a bigger drop in the currency. remarks are made less than half an hour ago. inhael heap has more an sydney. what else came out from that meeting? : the currency, i think, was the main game coming out of the minutes, which related to the policy meeting two weeks ago. there is a degree of frustration in the central bank that the currency has failed to track commodity prices, and it is still trading above the level that the governor nominated. the other thing the central bank said is that they would like to see a lower currency and sustained drop. they think it needs to be lower for longer to give businesses the certainty that they can
encourage them to invest in a more competitive environment. ba in theno strong minutesr, but the governor said he is opening to lower interest rates. he made it clear there is an explicit easing and the central not mentioned they are quite in the same strong terms that the government had last week when he said that prices in some areas of sydney were crazy. --y reflect shery: thanks a lot. michael heap on the latest. let's take a look at some of the other stories we are watching this morning. here's yvonne. yvonne: we talking about insurance australia groups surging right now. let's take a look.
buffett'sen investment company announced it is buying the insurance giant, they will pay $388 million for a mere 4% stake in iag. the deal will give the company 20% of their insurance premium payments and make it liable to pay 20% of claims over a 10 year period. says they will use the money to reduce its exposure to natural disasters. they are one of the biggest buyers of catastrophe insurance. it will be the largest deal by value in the asia-pacific region. ising on to greece, europe upping the crucial meeting. it is seen as the make it or break it sessions for athens' ability. the policymakers are pushing greece to return to the negotiating table and make more concessions.
officials raised the prospect of a greek exit. insists thatande everything must be done to keep the country in the eurozone. mario draghi also raised his rhetoric, saying while everyone needed to do more, the ball is still increases court. the euro fellays on monday. -- we areoyota waiting to hear more from the shareholders meeting today. they will vote on a new stock offer, $4 billion, walking in investors. automaker shares have been criticized by institutional investors in the west, opposing separate classes of shares. toyota is trying to give the second class of shares equal voting rights. for are expected to sell a 20% premium over common equity.
they will be restricted from trade for five years. yvonne.thanks, ev how china may be rethinking its foreign policy -- that is on bloomberg.com. plang up later, malaysia's to create a mega-bank failed. we will be live in jakarta for the latest. doubt whybreak, i bank of america merrill lynch is expecting a big slump in asian currencies over the next year. you are watching "trending ."siness t ♪
worst performing currency and nation. my next guest is cohead of asian strategy in bank of america merrill lynch. he joins us from singapore. thank you so much for coming in. where do you see asian currency ahead of this year, given the outflow of funds from emerging markets? >> well, we expect asian currencies to depreciate steadily this year, building into 2016, as the fed is tightening continues to pick up pace. generally and broadly, yes. on more reflected currencies, the malaysian ringgit, the at the end of next year we will expect 3.9. shery: so you do see the
malaysian ringgit breaking through the threshold, with that peg that was fixed over a decade ago? the malaysian prime minister, former prime minister, saying he showed repaid the ring it as a way to balance it, to stabilize it. do you agree with that? claudio: there was a caveat to what he mentioned. he said that they also believed they should take it to the gold standard. i think reverting back to the historical relic -- the chances are small. but the political sensitivity at the 3.8 level, even though economic -- even though the value is still an issue. i think it may be hard to cross that threshold in coming months due to the political sensitivity, but i think ultimately, when you look at the direction of the interest rate, of growth momentum, and the
downside risks from liquid natural gas exports, which are five times as important for malaysia then net oil exports, and i think the vulnerability is quite evident. shery: we have seen those vulnerabilities play out this year. do you see any opportunities elsewhere, when you see investors pulling out of emerging markets? claudio: yes. the thing i would like to caution is that it is important to distinguish between the outflows we have seen and retail , which accounts for less than 5% of total global inflows. nonetheless, we do see some outflow in indonesia -- about $350 million in one month. we see some outflow from india. ands more idiosyncratic
discriminatory than in 2013. those times it outflow tend to be localized, but as we continue those countries such as indonesia and malaysia that have high foreign incentives of outstanding ownership, there will be pressure there. they willu will find, still be comfortable so long as the pressure on these currencies is slow and steady. shery: i wanted to ask you about that decision coming up from bank of indonesia. the weakness of the currency has constrained its ability to move -- what do you think will happen? laudio: we think by the end of the year we will get a rate cut again, because indonesia will drop to 4.6%, and because the slowness of the economy -- motorcycle sales are very weak
today in terms of the reports on the domestic demand. so i do think a rate cut is warranted later in the year. the difficulty will be if we get more substantial with more outflow, whether that is in the works. for the time being, the main baseline scenario is that they can deliver a rate cut. shery: what about the chinese youan? claudio: we are out of consensus -- we are looking for a 5% appreciation. -- again, next year this will be a reflection not just of outflow but chinese official having more capital liberalization, letting it be more market determined rather than shadowing the dollar, which will only do more detriment to their economy. shery: thank you so much for your time.
>> now we're taking a look at the headlines. jet bush has launched his presidential campaign. he said he would take command of america's future once again. he has promised to deliver 4% growth in 19 million new jobs, that he has struggled to cement himself as a front-runner in a fairly crowded republican field. >> campaigns aren't easy and they are not supposed to be, and i know that there are a lot of good people running for president -- quite a few common fact. not one of us deserves the job by right of resume, party, seniority, family, or family narrative. it is nobody's turn -- it is everybody's country and it is wide open, exactly is a contrast for president should be. president has
returned home from south africa after the high court issued an order for his arrest. crimess wanted on war and faces charges by the icc over what happened in darfur. the judge who issued the arrest said the south africans position to let him go violated the country's constitution, but the arrest order was called "lame into meaningless." hash korea says its leader deployed antiship rockets. television shows pictures of him looking through his binoculars interspersed with images of another ship. it didn't say when or where it will happen. a spokesman said that it appears that the north is replacing its aging soviet-made rockets with locally made ones. shery: coming up next, "star
they are looking to raise $1.5 billion which could value them at $15 billion. for more, we are joined by robert in tokyo. how does this change the market for taxi hailing apps in china? going to dothis is is make it a lot more competitive for the taxi hailing apps in china, who are experiencing phenomenal growth. alibaba didl see is in his pockets and fund the expansion, taking on uber. sides, you have china's three largest internet companies involved, and one is giving one billion yuan, 60 million u.s. dollars. what this means visible get a whole lot more competitive, a lot of incentive for these companies to added drivers, to provide free rides. probablyng to make it
the best time ever to try and handle a cap using your smartphone in beijing or shanghai. shery: tell us, what does this funding do? what are they planning to do with the money? robert: they are going to use the money, like i said, to expand the amount of free rides. they will use it to boost subsidies to their drivers. ,hen you catch an uber typically the driver sees a percentage of it as a cut. what this will do is perhaps try to woo drivers and customers to make it cheaper, and basically have capacity to fund expansion. with the evaluation this company is looking at, it is looking of up to $15 million. uber is that $50 billion. people backing these companies see a lot of growth, and it will
give them the cash they need to make sure they come out on top. what they want to do is make sure they stay on top cousins uber -- shery: robert with the latest. let's go to yvonne, who was looking at social media. yvonne: we are still talking about the next gen plans. they even released a video. trek," attle bit "star little bit anime. people are saying -- the uniforms were designed by william chang, the oscar-nominated costume designer. he talked about that, saying it
looks like this because it shows that these costumes have a lot of character and color. here's what some people are "seeing star trek everywhere." kitty."h for hello david: i want to show you a comment coming from e3, the game conference. afairly interesting 1 -- friendly banter. a lot of these game developers present in taito. ♪ .
shery: the top stories. europe is raising the price on greece had all the june 18 meeting. athensakers are pushing to return to the table and make more concessions. some officials raise the prospect of a greek exit, francois hollande said everything must be done to keep in the eurozone. australian central bank has repeated the need for further declines in the aussie dollar to balance economic growth. remain below average
well into next year. the president reinstated and the easing after two rate cuts. the minutes of the rba meeting should be accommodated. time for the yen after the boj governor said he was not trying to change the rates. he has said the currency was unlikely to weaken further. his comments were perceived by some analysts asking for additional monetary easing. a look of what is going on in the market. id: comments from the boj governor, mr. kuroda. this is the yen. yesterday's trade at this today's trade.
you can see how it has been moving. the big move when we got his comments that mr. kuroda said he did not mean to say it that way. following the japanese session. as for the equity markets, decline across the asia pacific japan is no exceptions shares following in korea. some of the rig is decliners, shanghai seeing the beggars. extending the drop in the markets. -- shanghai seeing the biggest. the regulator in china will take further steps to crack down on the margin debt. lending, sometimes risky lending extended to investors that have extended most on the stock market boom. the concern is when the margin debt is called in, investors may not be able to pay. as they are trying to avoid that's completely. the cut of the shanghai
composite 2%. saying king is moving. some of the stock movers we are following in the session, securities. -- in the hang seng is moving. this saw the share price is moving today. raising $3 billion here. the report 6% of the session. we will continue to track of this stock. it is $30 hong kong. we will leave it is there. in that did not mean it await was the basic message from as he attempted to clarify comments made last week. surging the most of the as of the dollar. david is here with a more. what did you say this time? david: he was trying to put into context. in other words, he came out to explain the reason he mentioned
what he said last week was not so much to influence where the nominal exchange rate goes. it went up as a reaction in more easingit is from the boj. tightening of monetary policy. he said a few things. the currency, he did not mean for days where the nominal fx goes. oft's the one on the bottom your screen. she is saying the inflation forecast, perhaps the target of getting 2% and keeping it there is not based on any specific fx rate. , i think heed about was asked about an exit strategy from all of the evening which to the boj has been on for about two years. at thissically saying point, it is too early to talk about that but if there was one
option i could put forward could bexcess reserves one exit. let me browse a few of these lines. he was speaking a few minutes ago. yen isas the weaker concerned, he tried to weigh the benefits of having a week japanese currency. generally, exports but also weighs on households full if you do a lot of import price indexing into that. that is the real exchange rate. after just for trade relations and inflation. ok, expectations, he does not expect hyperinflation. affected by various factors including fx in the short term. the boj is saying
meaning bullish expectations and seem to be emerging at this point in time. the main message, and was not exchange influence the rate and he did not mean or did not say, very confusing, he does not expect a weaker japanese yen. a little bit of a reaction for. -- a little bit of a reaction. 7.235 shery: thank you for breaking the it down. shareholders will vote on a new stock offer that will raise money for the automaker in lock in investors. sarah mcdonald joins us. what are the main features of the shares? shares are named after toyota's passenger car. pretty complicated.
you cannot sell them for the first five years. a you can a listed predetermined dividend rate. after five years, you can choose if you want to keep them or give them back to toyota and get cash or stock. shery: it has been pretty controversial. speaking out against the shares and a why? we are seeing: american and canadian pension plan, got is saying, hold on a minute. -- coming out and saying, hold on a minute, it seems unfair. they see it as being poor and at a disadvantage of the existing common stockholders full we had proxy by the iss recommending the climates vote against the shares. shery: just briefly, why is toyota doing this? what are they trying to get out of this? sarah mcdonald: toyota said they
are trying to fund r&d and what reward shareholders. so when they stood by the company for the long haul. if you think about japan, a lot of pensioners looking for a steady income stream. no. it will be popular with that kind of audience. that kind of investor will be popular for toyota and a to complain about anything. it could be a win-win. the votes could be happening right now. it would be interesting to see which way it goes. joining ush mcdonald from sydney. some of the other stories we are following. sell 585a plan to million dollars worth of solar equipment to its parent company. chinese firmt, the said the decision that not have an adverse effect on is
business. hanergy shares plunged last a month before trade was suspended. a partnership to expand the retailer's use of customer data. the company said they will build another cloud-based platform. the clothing retail said the initiative would lead to a more personalized digital experience for customers. >> the idea is to interact with consumers for when they wake up in the morning until they go to bed in the evening and have that dialogue and support. that creates a unique combination and connection in between the brand and the ultimate consumer. central banknd's will hold interviews for potential candidates to be the next governor.
have been chosen including a former imf economist and a woman and a central banker who was -- the current governor will and his five-year term in september. malaysia and the middle east may have failed but that is not stopping indonesia from giving it a shot. taking on the challenge of creating an islamic a megaevent to find ever -- megabank. ?hat can you tell us reporter: indonesian authorities are really pushing ahead to create a mega-bank after a similar proposal fell through in malaysia and the middle east but this plan might materialize this year. -- those banks have
capital of more than $113 billion next year. they will provide five trade rupee to the banking -- 5 trillion rupee to the banking unit. setting up a new lender and maybe converging another bank into a sharia compliant one. the combined entity is expected up to 20% bys of 2018 as compared to 10% without the merger. indonesia these to have other source of funds for infrastructure projects to reach the growth target of 7% the next two years. they spend more money to finance infrastructure programs. show the muslim population is more than 12 times of the size of malaysia's but sharia banks are less than 1/6
of central neighborhoods. tensions are high over a plan to vote this week on a china backed plan for elections. wheneds of villagers have it evacuated from western indonesia as hot ashes spews sinabung. of 130ntain is one active of volcanoes and indonesia. it became more active since the june the third. the central-bank decided to phase out the local currency. theas been exchanging zimbabwe dollar for the greenback. systemd a multicurrency after inflation hit 200,000,000%. the exchange rate right now is 100 trillion zimbabwe dollars will get you 40 u.s. cents. isry: warren buffett's
buying into insurance giant, aeg and will spend $382 million for a 4% stake. ceoier i spoke with aeg mike wilkins. he said the deal is a good fit for both parties. mike wilkins: we see the advantages for us and our customers really leveraging the complementary skills that iag has. from a perspective, it also reduces some of the volatility as well as providing us with quite a capital diversity and and flexibility. we see a win-win situation. success toerkshire's the proven activities of iag is involved in. means we are seeing a
significant endorsement of the strategy we are following across the asia-pacific region and recordation of the strong franchises. u of also said it will reduce your exposure to natural disasters. but, whatustralia kind of impact of the climate change will have and the ability for you to provide adequate insurance cover for assets in those countries? : well, we are the largest insurer in australia and new zealand and will divide comprehensive cover at this stage and we believe it will be viable. the climate change, we do ring that what -- we do think that what we're seeing at this age is a natural regression of the environment as much as anything else. given the capital strength of iag has, the further strengthening and flexibility of
the arrangement we entered into with berkshire. be able towill provide capacity particularly in australian and new zealand market. shery: doesn't the deal change your business strategy at all? countries sucher as thailand, china, vietnam, indonesia, does this affect your strategy? mike wilkins: no, it does not. greater flexibility -- greater flexibility to do that strategy and we believe a is a significant endorsement by berkshire of the strategy iag has been following for several years. show salesparis air have surprised with boeing taking an early lead. it to rish almost $18 million airbus, $50rival, billion.
-- $15 million. emerging-market carriers including saudi arabian airlines and qatar airways are in field for long-haul jets. >> we are producing planes that are obsolete in the current fleet at a much faster rate. the payback even at the lower fuel prices for the new is much faster than it used to be a you can thank the 788 for that. shery: and we spoke to the chairman on their make in india. india's biggest sport-utility vehicle plans to sell metallic components for use from a factory. >> we are going to be making metallic parts for airbus. established to the
machinery we imported from a factory being run in australia. already had done a proficient parts. it took a long way to get our process. inspection rigorous and validation. all wells that end well. aspirations in the aerospace manufacturing field. is it is the tip of the iceberg stoponce the order is executed, we will have a more. looking at india as a major destination for the global supply chain. >> you think you will win more -- fromarm airbus
airbus or you can become a partner to boeing as well? >> that is the aspiration indeed. produce allnt to kinds of customers in the aerospace industry. australiaquired in had been put up by boeing for manufacturing parts. they know the plans well. i am sure before long we should wait to secure orders with them and others. taking small steps but a giant delete for a company -- a giant a company like ours and india. shery: up next, why indian air russian tycoons are doing to control with the world's largest wireless markets when "trending
shery: welcome back. consolidation seems to be the current buzzword or indians communications actor. communications is looking for a tie up. our correspondent has more from mumbai. who are they in talks with? inorter: the communications exclusive talks with a russian-based company. a stock swap. the discussion indicating nonbinding and why is it watched so close we. cap subscriber base of nearly $100 million -- 100 -- his watch so closely?
subscriber base of nearly 100 million. the spectrum options the recent one we had the busier and guessing one on the 22 licenses by the supreme court. 15% of theearly consumer base. has a hundred 50 metalwork subband -- 50 mhz bandwidth will not work for us. the 850 want more of mhz. that's what the launch for 3 -- 4g services by the end of 2017. back to you. shery: thank you. let's turn to yvonne of what is
trending. electronic e3, entertainment expo going on. stuff on social media and the sony seems to be the big talker right now for they unveiled the galaxy and more. some of the games. a lot of gamers quite excited. some say it looks fascinating. e3 on thenning innovative game side of things. moving on to china airlines. their new uniforms. a big feeling. here is what it looks like. the video they launched. some people saying it looks a little star treky or anime. one person saying the new uniform reminds me of "iron man." i do not think they look that