tv Trending Business Bloomberg August 10, 2015 10:00pm-11:01pm EDT
height of the good old days. nuclear reactions. about then japan approach of the shutdown in fukushima. follow me on twitter. don't forget to include #trending business. reaction by the move to the people's bank of china. david: as far as equity markets are concerned, not a lot of reaction. the hang seng index, one and a half percent. that is the big story. forget equities. this is something we rarely see. a big adjustment here. really what was a rare occasion with a generous amount of potential based on what they thought about the exchange rates. the value of the currency and this point.
that is the weakness. 631 right now, that is the spot rate. 3095. as market forces get a bigger role in expecting the you want to change rates, you should see a convergence between the quote in hong kong, the cnh market and the sea ny -- cny. side aently, we also drop in currencies across the region because of this. yuan's level a little weaker. south korean won also weaker. speculation that these currencies will need to adjust. 11.72 south korean won.
73 40 u.s. cents. forget about equities. back to the big story today. rishaad: the beginning of the yuan begins. they are setting a deli -- daily reference low by a record 1.9%. let's bring in stephen engle. what have they done here exactly? stephen: this is something i brought up that could be a muchbility yesterday, weaker than expected export numbers. the yuan is tumbling this morning, filing an unprecedented 1.6% at this minute after the daily reference rate with that -- was sente pboc lower by the pboc.
in data released over the weekend, we have this bart chart down 8.3%, much worse than expected when. the eu and japan sticking out here. yuan has made its exports less competitive against regional competitors such as japan. the pboc says today's fixing rate adjustment is a one-off adjustment, adding that it will strengthen the markets role in the fixing and promote the convergence of the onshore and offshore rates. the central bank says it will keep the one stable at a reasonable level. except for this morning. the statement goes on to say the exchange rate is stronger than that of other currencies, which it called a deviation from market expectations. chinese authorities have been the one broadly stable against the dollar, as it
has been encouraging greater global use and as it pushes to have it included in the imf reserve. oh, international among others said, said china should let the yuan depreciate. surpriseess, china's cuts in reference rates and the fall is triggering other falls in regional currencies. singapore, ozzie and kiwi dollars all lower. rishaad: let's take a look at singapore. the economy shrank. this prompted a revision downwards of a growth forecasts for the entire year. let's go to haslinda amin. she is live in singapore. it is quite a dramatic revision. well, a challenging time for singapore. a slowdown in china, a slowdown
in singapore. gdp contracting 4%. an expansion of 4.1% previously. gdp forecast for the year, down to 2.5%. versus 2.4% previously. in terms of prospects, weakening prospects. we have been talking about a slowdown in the chinese economy. that is hurting singapore in a huge way. china is the largest export market for singapore. it overtook malaysia to be the largest last year, accounting for 12% of overall shipments. singapore exports everything from pharmaceuticals, to machinery to china. but that has slowed down in the past few months. in fact for the last few quarters, global trade has slowed over the last few years. also having to
reinvent itself. it is in the midst of a tenure economic transformation. it is trying to wean itself away from cheap labor, away from manufacturer, to a more smart economy. a high-tech economy that would rely less on cheap labor. and the government has put in place measures to wean small and medium enterprises away from cheap labor. that has had a lot -- heard a lot of them. it has led to higher operating costs and leading to some of them being shut down. singapore has to position itself by makingxt years itself a smart city, staying relevant in the global economy. you can see the point behind me. it has been crucial in singapore's development over the last 50 years. how that will pan out in the next, we will have to wait and see. rishaad: thank you haslinda.
zeb.ver to zeb: that's right. big deal news in china's online e-commerce world. million for pay $5 a stake in the biggest e-commerce operator. the founder seeks to diversify and connect online business to off-line retail. retail is a major presence across china in the biggest cities. the store footprint that alibaba wants to help connect to its online footprint and better compete with j.d..com -- a 20% drop in the market value this year, hoping the appeal of e-commerce wasit slowing growth in china. previouss as to a partnership in time retail. all of this aimed at better
competing against jd.com. we are following news from singapore, the commodity trader and battled in recent months. shares rising today after the commodity trader posted an auditors report supporting its accounting practices. michael klein, formerly of citigroup, was hired to advise on financing. they had been hit losing half of market value when a group outing itself iceberg research published criticism of the firm's accounting. noble released a report stating the firm complied with international rules and evaluate long-term contracts. we will continue to follow this story. the stock is the most sorted in this time index. japanese banking giant said to be cutting jobs in london. during their positions in the london offices will go according
to a person familiar. among the cuts, high-yield on traders and analysts. it comes as the ceo works to facilities pledged to deliver .400 million in pretax profit job cuts, as the european business last money in the first quarter. posted a $77 million loss in the three months ended june. it was the worst performing region following the americas. asia is the bright spot. they delivered $118 million profit in the quarter. on, what social media is saying about the abcs in google's restructuring plan. arehong kong landlords being given a reality check on the price of their realty. back in a couple of minutes. ♪
rishaad: the slowdown in china, crackdown on luxury is having effect on retailers in hong kong. slowing sales and skyhigh rent. shery ahn was in causeway bay. rent is at its highest. shery ahn: this is russell, and causeway bay in the heart of hong kong. the highest retail rents in the world. in this area would usually be packed with locals interest from locals andd -- tourists from the mainland trying to get her hands on a special piece of luxury. brands like burberry and swarovski -- they would be lucky to get us find this location. things have changed dramatically since then. on top of the economic slowdown and the crackdown on his extravagance, other places are lowering people away.
when luxury brands taking a hit, they are trying to get relief i cutting down on their rental costs. this year, hong kong saw the biggest drop in retail rent since 2009. the average monthly rent on this street fell more than 10% in the first half. ,urberry, and jewelry retailer they are trying to push their landlords to lower their rent. some others are just giving up. heuer just closed last week, citing higher rent and declining traffic. the retail market expected to pick up anytime soon? not likely. will dropt rents 15%-20% this year. shery ahn, bloomberg, hong kong. rishaad: let's bring in a
property analyst. author of the financial investment newsletter. is going on? on the retail side, you say it is doing pretty well. but when you look at the luxury they are all trying to renegotiate. that ist the high-end correct. the anticorruption drive in china has really crushed the luxury goods market in hong kong. 16% in, watches, down terms of aggregate sales. but the non-jewelry and luxury goods is still up about 3% year on year. rishaad: mainstream stores. guest: malls, shopping centers, restaurants are doing perfectly well, because that is driven by the local market. there is a bifurcated market here. the zero is luxury goods.
below zero?'t it down big time. i would expect to see down 20%-30% in rental terms for high-end streetfighter retails. rishaad: this is going to get worse because we have had devaluation take place today. 1.9% by the people's bank of china. this could have ramifications for hong kong. guest: quite frankly, one of the reasons for the decline in the luxury goods market is you have had a 40% devaluation against the nba in terms of yen in japan. luxury goods shoppers are going to those markets which are cheaper than hong kong. i think the pboc has sat for some time that they wanted to then the trading range of --
we have only seen that in the last day or two. rishaad: let's talk about retail expanding into commercial property. a lot of people are bullish. guest: yes. the office market is really in the doldrums for about 23 years. -- 2-3 years. about china policy. the opening up of a policy --the openingna up of the shenzhen can i program is bringing a heck of a lot of brokers and so on into hong kong. that is where we are seeing the demand in the office market. vacancy rates are fictional. the lowest we have ever seen. rishaad: those people need a place to live. the asian extract coming in, --
asked pat coming in, but are you seeing that much growth when it comes to private property? guest: for the high-end residential market, quarter on quarter is up 6%. rent. that is largely because ex-pats coming in from other parts of asia, particularly from china. of course, there is not really that much stock available. the luxury market on peart -- underperformed by 30% in the last three years. rishaad: what about singapore? guest: singapore is going to benefit to some extent, but not as much as hong kong. they have a massive oversupply. they are building probably to have three times the amount of supply that they build historically her and him. hong kong is only building about two thirds of its longtime -- a long-term annual supply. rishaad: also nothing being done to address the issue properly?
they become luxury properties. not building for the mass market. guest: what happens is even 400 marketedot flats get as luxury property. but property under 500 square 75%-80% ofmake up hank -- hongn kong. we live in shoeboxes. nobody in singapore would accept that. thank you for joining me. the trend in property markets. these are stories making headlines. northkorea warning the about planting landmines. the block happened last week, hitting troops on a routine patrol. the commander says they were planted recently rather than
being there for years. it is the most heavily fortified border in the world. hundreds of thousands of troops on both sides stationed. france has stepped up the search for debris on the island of reunion after pieces of the wing was linked to the missing malaysian airlines plane. they are checking the shoreline. a spotter plane is coming the ocean. a wing flap found on the island has a high probability of coming from and h 370. the only known wreckage from the missing plane. massive cleanup continuing in eastern china after the typhoon struck over the weekend. direct economic losses are put at $1.4 billion. it was the most powerful typhoon to hit the region in a decade. it destroyed thousands of homes in three provinces. it is still bringing rain to shanghai and other areas. rallies a tweet
mark barkman reports. reporter: a rescue program between greece and its creditors leave enoughwill time for parliament to assess it. so funds can be dispersed for an august 20 payment to the european central bank. the deal would also allow the parliament to pass any new law requiring reform in the middle of the week, and pave the way for a meeting of area finance ministers at the end of the week, according to two people with knowledge of the discussion. greece needs a quick release of about 20 billion euros to create a buffer for its banks and to make loan payments. skeptics remain, such as finland's foreign minister, who age plan for greece is not going to work. investors remain optimistic with stocks and bonds rallying, on hopes a deal will be struck.
that is after the index sank 15% last week. its biggest five-day fall of 2015. even if they fail to dispersed funds, greece could request a short-term loan from a firm that has 5 billion euros available. the situation isn't as dire as it was earlier in the summer. bloomberg, london. ouraad: let's turn attention to what is going on in the world of social media. speaking of social media, let's talk about social media. twitter of course. year.r has had a rough a lot of talk about the strategy, shares have taken a beating. u.s.s got a 9% lift in the session, that is because of jack dorsey, the founder and interim ceo, posted that he bought share.
that is good for any company, when you see executives adding to their holdings. confidence among investors. however, if you look at the that he sold see a lot more serious than he has bought recently and added much more high-priced. ,. he got a bargain. there is criticism, because one executive do this, they call it a stunt. the optics are good but you get reactive -- reactions like this. just to take a look at what some other enthusiasts or critics maybe saying. they are really laying into this. how about we all buy shares to make it look like we believe it? jack dorsey getting a key endorsement from a key investor in twitter saying, he should be named full-time ceo. another story making
headlines. google restructuring its business under a new company called alphabet. not just that, but the humor behind the announcement. this website, called abc. xyz. it is a hit in reference to an "hooli", anderies they are making reference to it in that announcement. one person saying, hurry, time to buy all of the xyz shares. zeb: we will read up on that. back to you. rishaad: china's biggest electronics change -- change a'sping thanks to jack m billions. ♪ ♪
(don't fear my darling...) (the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store. rishaad: they look at our top stories. china weakening the yuan. overseas shipments falling more than 8% and july. the pboc saying it is a one-time intervention saying it wants to strengthen the market drop. marking japan's return to an nuclear energy after the disaster.
the majority of japanese oppose the revival of nuclear power. surging above the 10% daily limit trade alibaba bought a 20% stake in the biggest electronics exchange. paying $4.5 billion. it is jack ma's biggest deal ever. the will work to speed up deliveries. alibaba closing above 2%. at what isa look moving in the markets. we have that posit for an hour or thereabouts. received?e news been >> as far as equity markets are concerned, i think that is where we are seeing the more productive reaction. we get to some of these across the region. they majored in the asia-pacific region and are all trading lower
as a result of that adjustment. trying to get ahead of course. that said, equity markets looking like this. now downhe red right 0.6% and we are pulling back from this 18.5 year high. are four to five straight days into this. the dollar yen traded as well. not a lot for the shanghai composite. story we hade yuan the new credit data coming out. it's one of those rare instances where he had the amount of new loans loans -- reminbi doled out. some of that making its way to the brokerages. some of it is reclassification of my abilities because of the debt swaps.
it is really just accounting. markets.ed, fx steve will get you more on that pboc announcement. let's start off with screen one. this is when the pboc announced at 9:15 a.m. hong kong time. the dollar is a stronger by 7/10 of 1%. the kiwi dollar is down by a similar amount against the u.s. dollar. to 65.ack what else do we have here? dollar down 73 .39. can see this convergence. that is the exchange rate if you walk around hong kong. back to you.
rishaad: just getting into the bare bones of this devaluation. there was a slump in exports. the reference rate being lowered by a record 1.9%. down andncy is trading steve is breaking this down for us. >> the currency has been trading as low as 1.98% lower after the rate was set down by a record amount. we brought this up yesterday, and combatevalue this slump in exports? we got the numbers over the weekend. would this be another tool? we asked kim doe and he said you should not do this. it is a lengthy process but this is a one off supposedly. rishaad: if you have an appreciating currency on the fall in exports and fall in imports as well. >> a lot of that is due to the
commodity price slump. the import bill has been much lower but on the exports slump the shipments to eu were down three points 5% or so. those are two markets that have devalued their currencies or seen them devalued. let me get you to the statement from the pboc today. they said the yuan fixing is a one-off adjustment adding it will strengthen the market role in the fixing. theyad: on the one hand, want to market to decide where the currency goes but on the other hand -- >> think of the market as the ocean. they have one hand on the pillar, another hand on the nchor -- .t is a market driven --haad: it is a mark in
market economy until it isn't. >> they did go on to intervene today. the central bank went on to say that they will keep the yuan stable and at a reasonable level. they say this is a one-off but obviously a weakening yuan will help temporarily on the export front. >> they could cut interest rates again for a fifth time but money supply is the latest, it is weakening. this is an economy having reaction toave the this news, he doesn't mince words. implies a relative lack of confidence in the chinese economy. >> some saying out there that it has gone from a currency war to a currency nuclear war. >> we've been talking about this. does china join the race to the bottom and certainly the authorities are saying that we need to do something.
just stay with the matters in china. electronics arts surging today and is down to the spending power of alibaba. jack ma in the offensive to the online rival j.d..com. this and alibaba doing what does it bring to the table? >> regardless of what alibaba is doing it is getting suning a boost today. you know what suning really brings to the table is that they are a very well positioned in terms of household appliances and consumer electronics and its competitor has always had a brand name for this area. taking that 20% stake would really help alibaba strengthen in this area. the fit.tell me about
it is down to old-fashioned things like just ask. >> one of the other strengths of have thingsey in nearly 300 cities. as alibaba is expanding to the smaller cities and rural areas, being able to tap into suning's network of warehouses and storefronts would give it that extra push. rishaad: does this mean that jack ma is revisiting his strategy or is it part of a trend? >> management pointed out yesterday that they are not revisiting their strategy and are not shifting away in the core strategy of being a platform but on the other hand, 47 deals in the past two years worth $15 billion. it does seem to have much more and an e-commerce platform
they're going into all of these areas like film and online finance. there is a lot on alibaba's plate these days. going to look at some of the other stories making headlines. mitsubishi is expanding and taiwan. they're looking to close the gap mizuzu financial. mitsubishi says it wants to be geographically close to its customers. china releasing pictures of a new 100 yuan note that will be in circulation from november. they say it will be harder to forge but easier for machines to read. it is larger than the 2005 series but has enhanced security features including the color of the number 100. it is the largest in the chinese
currency and will be circulated from the 12th of november. aiming tos it is produce all of its smartphones locally. the new factory just north of the old city. xiaomi sang that manufacturing in india will help margins. the australian government will be reduced -- releasing its targets for carbon emissions but under --ely to be as ambitious as other developed economies. for more on this we are joined now by paul. what is the government expected to announce today? number is in front of the corpus room right now. the cut is likely to be twice 6%-20 8% of carbon image -- to
8%.26%-2 28% by 2025l be fit and canada closer to 30%. if the u.s. number was pushed australian as the number than the u.s. will be cutting by 40%. we have australia on a comparatively meager 26%. it does appear that australia is dragging the chain internationally when it comes to reducing co2 emissions. so when they talk about the target before it is announced is there likely to be division among the ranks? >> there already has been. the cabinet discussed it last night and it was leaked out that
julie bishop wanted a higher target. she is the one that has to front these talks internationally. there are a couple of cabinet ministers as well. on the other hand it have dennis jensen and others like him who don't believe in climate change and would like to see no target at all. it is the job of prime minister tony abbott to manage all of these disparate beliefs and he has previously called himself the weathervane on the issue. in 2009, within the space of a few months, he supported an emissions trading scheme. he is previously on record as calling climate change "crap" before more recently embracing the science around it. that really does illustrate his political expediency. he has an election to fight next year and doesn't want to alienate a sizable lump of his own electorate.
>> these are the stories making headlines around the world. general given a suspended death sentence after being convicted of bribery and abuse of power. all of his personal property will be confiscated including a solid gold statue of chairman mao. he is the latest senior figure caught in the crackdown in the military and communist party.
prosecutors in the u.s. have filed charges against an 18 euro man shot by police in ferguson, missouri -- 18 your old man shot by police in ferguson -- 18 year old man shot by police in ferguson. officers say that he fired on them, a claim denied by his father. it came on the anniversary of the shooting of michael brown. there -- led to weeks weeks of unrest there and in other u.s. cities. the crew of the international space station of enjoy their first taste of the food grown on board. veg one.been running growing plants in zero gravity. the result was lettuce. other samples will be sent back to earth to be analyzed.
rishaad: was have a good look at what is going on now. it is a four year wait this nuclear shutdown in japan. they're firing up the number one reactor, the reaction is key to prime minister abe's plans. let's have a look at how significant this all is. yvonne: it really is significant. it has been nearly two years since japan's last reactor was shut down and does this move the needle? sentimentso much but wise this could be a boost for the market. the two reactors they are talking about here are the first to go to the regulatory process.
we saw that pretty quickly here as soon as the news broke out in japan. we saw protests and demonstrators outside the plant in the southern part of japan as well as here in tokyo. we also saw the former prime minister speaking to some of those protesters. tensions are still rising high. a pretty aggressive schedule moving forward. they switched the reactors today and they say they could be generating power and transmission. full operation possibly by the end of this month. the will start doing business in early december. the second reactor set to open at -- in october. here is tricia making headlines. tension is quite high. rishaad: what about the economic implications? oil and gasl that
does affect the trade balance quite markedly. for four years we have seen the trade deficit. rely one forced to these power plants running on fossil fuel. we saw these imports from liquefied natural gas -- oil, coal just skyrocket. we have that record trade deficit of $103 billion. there is a lot of talk of a the attitudes about atomic power. should this be phased out? there are companies like germany that say it should. the initial reaction after the fukushima disaster was to do that. but it has now been included. a change in policy again to have atomic power and the energy future. us.aad: yvonne man for wass get now to the man who
the special advisor to the prime minister in the time of the fukushima disaster. he joins us by webcam. thank your for joining us. let's start with your opposition to nuclear power. it is a little bit more complicated. you are suggesting that perhaps japan should have a nuclear future but not yet. why? guest: the biggest problem at this moment in japan is that the technical safety -- not the technical safety it is public acceptance. themany people can trust nuclear regulation authority? that is the biggest problem. the government should be more careful to realize public is not accepting. abe'sd: why is shinzo government so determined to get this done? moment, the four
power plants have shut down and then it is really expensive. need tor later we depend on the nuclear power plants. create trust from in people to the government nuclear regulation authorities. but they want to save money and to save costs. that is the biggest situation. you have been saying and mentioning this, there is an issue of trust. people not trusting the government are trusting these electricity companies. especially given what happened in fukushima and the subsequent actions of the power company. how do they regain that trust?
people think that the government should show the people the complete plan, or policy, to decrease the nuclear power. that, and simply restarting a nuclear power plant, many people feel we better go back to the old age nuclear policy. that is the reason white many people cannot trust the government again. this government should show people how to decrease the nuclear power plant over. to try years to 20 years. 2-20 years.ver that is a big part of trust in the government. rishaad: thank you very much for joining us. up next. sales.h
rishaad: the grand plans for the company expecting a tenfold sales increase in five years. we have the numbers. >> tesla's $30 billion market value is built on a dream. that a startup carmaker might be able to crank out 500,000 all electric vehicles per year by 2020. its week, tesla lowered sales forecast for 2015 and 2016, causing many to question still thinks he can go from 50,000 sales this year to 500,005 years later. the problem with placing bets on their future is there are very
few examples to compare it to. when has another startup tried to bill an entirely new kind of automobile, one that requires a complete reconfiguration of the industrial process? really only one example. the original game changer. the ford model t. here is tesla's vehicle production so far and its forecasts for this year and next. here is musk's goal for 500,000 cars by 2020. it seems like a stretch. but look at this. line up that day that with the ford model t sales beginning in 1909. the matchup is striking. the model t hit musk's goal with precision dosing 501,462 cars.