tv Trending Business Bloomberg August 31, 2015 10:00pm-11:01pm EDT
y's factory surveys were below 50. australia heavily exposed to china and the dollar near six-year lows. we have the reserve bank policymaker here. let us know what you think. follow me on twitter. tag whichget the hash is trending business. the markets. china. zeb: we are increasing the worst the selloff. i wish i had better news for you the first day of september. it is continuing. stocks are because generally lower of cost of the asia-pacific. china reading out of having an impact not only in china but across the region. it is late into a decline on the asia-pacific. look at the numbers. that yanis moving higher. a check of that in a moment. shanghai, the real story. -- in the yen moving higher.
a share movers. watching them today. we are seeing as much as 10% decline for some of the chinese names. seng,ong, the hang declines today. energy producers are the market leaders and their session. petro china leading the pack. some of the same names we saw yesterday leading the highs. macau casino shares. both have huge investment in macau. another name that moved yesterday is falling by about 4% and a session. closely watching australia. rba decision and legs economic numbers. somebody m -- some of the miners doing well. evolution mining. 3%.l search rising
look at this. a drop for this, oz and minerals. closely following currencies. wake of the numbers out of china, here's what we have on the aussie and kiwi. 7119 u.s. cents. when the china numbers came out and the yen is the beneficiary of the safe haven, look for safety. the economic slowdown in china will continue. watch at that very closely. gold prices, safe haven buying again impacting old as investors get -- gold as investors see it. 1039 an ounce. as we look at gold for the past week, this is what we have.
it shows investors are looking to take risk off the table. well, official factory gauge in china as we have been discussing. lowest reading in three years. a subtraction here. stephen engle has the numbers. and the unofficial figure. stephen: the china economy is slowing. five interest rate cuts in 10 months. and that you want devaluation. -- yuan devaluation. weak demand from abroad. it is been reflected in the official pmi for august. falling to the traction for six months added near 3.5 year low. in line with the median estimate economists surveyed by bloomberg. still expansion but worse than
the previous month. in the past few minutes, we got the secondary reading of manufacturing with mostly private sector are that hikes dan pmi slightly better. still well in contraction at 47.3. the flash number was 47.1 on par with the week pmi we got when china was grappling with the global financial crisis. goldman sachs in a note today before the release of the data said it is in the double dip for that china economy forming a bumpy deceleration. goldman said that was a slight pickup after easing in march but since then we had dipped a lower along with the stock market that felt for 2% in july and 12% in august from the june 12:00 p.m.. thatdistorting sentiment is the gauge is the parade in beijing has shut down some factories around beijing and
also the explosions that have disrupted both output and shipments. again 49.7 for the official manufacturing pmi and contraction for the first time in six months. rishaad: will have a more detailed look later. we want your opinion. using the hash tag trending business. first a day of september has brought more news that economies in asia pacific is facing challenges. we heard about china and also talking about south korea. expected to deliver key economic data. it was something like a bull. not forget about japan. some figures of this morning. let's tell about australia. the second quarter current account of a deficit. it has been a deficit going back to 2002.
the latest figures and we're looking at a larger or wider than expected current account deficit. transverse to 13.5 billion u.s. dollars. estimate was $11.3 billion. as a revised figure 29 $.6 billion. revised the figure to $9.6 billion. it is the biggest hole in five years. nothing new. what is interesting if you look at what that exports have done, they have come out with a number how much it attracts from gdp growth. we are in a negative right now. .6% from gdp in the second quarter. exports essentially are now a drag. you understand when the rba comes out with the terms, terms of trade have calmed down.
and we will get more clarity in about two hours and 20 minutes when it a come out with their latest direction. the deficit is larger than expected for the second quarter inject up the first quarter figure. -- and jack up the first quarter figure. korea came out with spurs -- there's. theirs.out with we all know of course that that shipments have been under fire for all of this year. it has been following each and every month. it was really an exclamation point to the narrative. the bigger context is policymakers will have to deal with weak external demand pressure and domestically notking, imports that do paint the best picture of what the economy looks like. it actually felt much more than
that's, more than 18%. usually an eye-popping trade surplus out of south korea. still a healthy number north of $4 billion but now what was seen the past few months back in may or june. that figure was closer to 10 billion u.s. dollars. andcountries, korea australia, the money flow does not seem to suggest is driving growth. back to you. rishaad: a look at other stories where following. here in shery ahn. a hedge fund? shery: yes, we're taking a look at a man group. sources tell us chinese authorities have taken the chair one -- chairwoman into custody to assist with the police probe into market volatility. assisting with investigation it does not mean she is facing charges or did anything wrong.
the details are hazy. li's mobile phone was turned off when called on monday. andpoke to li's husband he said she is in a meeting with authorities of he does not know who they are. i called the china ministry of public security and it went unanswered. chinese authorities have blamed miscalculation for the rout. executives at securities and journalists add business magazine. let's head over to japan. the finance minister there is weighing in on toshiba's wrong accounting scandal. we heard from one person sainted shiva should release -- toshiba should release accurate information quickly. the problems are snowballing. 10 more cases of accounting irregularity have come to the surface.
one is a project at one of his u.s. units, properly timed a booking of laws provisions have been found. other branches included in correcting and harassment charges. the new findings pointed -- cost them to miss a -- caused them to miss a deadline. the second delay of earnings which was initially due in may. internal and external probes of the accounting led to executive resignations and caused $1.2 billion in write-downs. apologized for shareholders last night. the stock is plunging again today and that is out of the company lost more than 1/4 of its market value this year. a trial date has been set for a class action suit seeking billions of dollars in compensation from airlines for alleged price-fixing.
a u.s. district judge rejected the request for decision in their favor. india, air new zealand, and polar are alleged to have participated affecting shipments of air cargo through fuel and security surcharges. the case was initially filed against dozens of airlines but most processing for a total -- most have settled for total of $1 billion. the trial is tentatively set for june 25. the judge said it was refutable evidence of a worldwide evidence and the jury can be asked to decide if the airlines participated in it or not. later --coming up throwing down the gauntlet. a new smart watch designed to applethe out watch off -- watch off of his perch. i look at the reserve bank of australia rate decision due up
rishaad: this is "trending business." a return to market action. our guest is live from melbourne. george, great to see you. a top story is weak pmi numbers. as a chief investment officer, how do you look at it and how would you interpret take -- interpret and change your investment? quickly,ery manufacturing and the world, number two economy is not a good thing at it is flagged and people are looking at the risk. it is unfortunate giving it is a manufacturing lad economy a you want to see those services part and consumption in general.
you want to see the services part to grow and expand. as some of the slow in a manufacturing confirmed half an hour pmi i is clearly not the case. not a good set of numbers when you look at services pmi. therefore, a pragmatic sub manager here that have the exposure to the number one trading partner, china, and effective stimulus from the fiscal side and monetary side. china has got issues ahead of itself the dessau it should step up right now with clear, concise policy. good accommodative european style language. rishaad: well, the thing is a you could argue through half of the kitchen sink. did they entitled -- didn't they throw the entire kitchen sink -- did they throw the entire kitchen sink? george boubouras: not a bad enough for the entire kitchen sink. ,n a flippant way, mario draghi
whatever it takes. you cannot be accommodative with your language but not appease markets or of sex workers. cutsy andone five yes, they can be more innovative. markets orppease accommodate markets. it is conducive to make sure confidence is more robust than what it is at the moment and do what they can to assist the fiscal or monetary and any type of policy issues. rishaad: a couple of hours away before we get the rate decision from the reserve bank of australia. tell me something, george, they must have looked at the pmi numbers. concerns about mining in australia. no change expected. would a rate cut to make any difference anyway? mm, it willouras: u make a difference sometime in
but wet six to 12 months believe they will cut rates again down under. one reason is china's slowing, the number one trading partner. australia is more exposed to that. we have the massive corruption in terms of trade. and we finished our first half calendar earnings season down under. we are negative year on year. we are in a massive at adjustment for profits and earnings and the linkages to china quite obvious. -- and itd an easing will make a difference at the margin. it will not be today but going forward the same as australia readjust from the messy terms as it unwind. china is a big part of it of course. rishaad: the danger is you ease a you have a house -- housing
market on fire and you risk collapse. george boubouras: not so much in the housing. for those who do not live down under, a housing acceleration in sydney as some parts of melbourne and the west coast, house prices are much lower than a year ago. of rba is making sure limiting the movie are -- lvr. there are pockets of aggressive housing sections. expensive versus other global cities, you cannot justify. it is not a broad-based. it is a housing recovery. from a regulatory oversight and they are doing it and it is working on the margins. it continues to struggle as they really just from the mining boom. it will take three to five years minimum to stabilize earnings.
the lower aussie dollar is a pretty -- is a precondition. easing and another rate cut in the year ahead what help corporate australia recovered. rishaad: george, nice one. george boubouras. interview that people been to hawkish and the fed should not move this year. let's get to the stories making headlines. singapore, for the first time in there will be at least two parties to choose from. the people's action is more than likely to retain its power. is hoping tor capitalize on the surge of patriotism and last month's independence celebration. we will have full color desk coverage. indonesian president at harder
work [indiscernible] it will force thousands of villages to leave as the reservoir feels with waters. the second time jokowi overwrote local demands. refusing to sell their land. sad tont xi jinping as be written debt is said to be real announcing -- is sad to -- is saidhe biggest i - biggestnce the makeover of the military. up next, this guy is high when it comes to alternative investment. we tried to speak to earlier. the ceo of one firm where shares have surged 60% this year.
bluesky investing in private equity and private real estate and hedge funds. he is bluesky's chief executive. mark, thank you for joining us. the old adage of from a chinese leader saying a good system drives people to make cakes and a bad system kospi to split cakes. how does that fit in with you? and the australian context, the stock market is not in the economy. private markets and what we give up in the private markets is liquidity. what's we get is growth. most of the revenue growth in australia as private businesses and markets and whether it is unlisted problem -- property or agriculture or food, it is an interesting area to play. over compounded number is
90 -- nine years. aboutce thing alternatives is the compound and a number. rishaad: give us a flavor of some of these private equities and venture capital as is you have at the moment. -- that you have at the moment. mark sowerby: the real interesting thing in australia is around the essentials. things people need, not what they want. things like education sector in australia outside of mining is the biggest export. education is interesting. a lot of work and student accommodation. australia have about 25% of the asbers of accommodation beds europe and u.s. health care is a big part of our economy and we are good at it. we invest in a pharmaceutical company that it's doing former sees inside the hospital as he
used to be the hospital ran it. -- it is doing former sees inside of the hospital -- pharmacies inside the hospital that the hospital used to run. finding defensive asset -- assets that will help. mark, thank you so much for joining us. mark sowerby, 50% growth. from blue sky. did not get a chance to talk , he was touring the english channel. wasn't theate darling of the economy but not really anymore. the darling of the economy but not anymore. we will find out why. ♪
rishaad: our top stories. shares in shanghai plunging. the official manufacturing pmi for august is 49.7 pretty much in line with estimates down from 50. the currency devaluation all of these failing to a briefing new life into traditional drivers. istralia where the current $13.5 billion. since 2000 nine and
down to 0.6% of gdp which is double in economists' forecasts. scandal looking into irregularities in the u.s. a delay of earnings reports for a second time. the first one coming after an independent investigation that prophet has been overstated and led to resignations and write-downs worth $1.2 billion. all of this playing out when it comes to the trading day. japan after the morning session. zeb: we are following gauges all across the world. that's number significantly impacting the market sending the shanghai composite down. almost 4%. a move as the selloff continues. it looks like september is starting with volatility like we
saw during the month of august. hong kong, this what we are seeing. the story is movement. you are seeing some of the real estate investment moving into the frame. the upside. up about 1%. thank you's asia advancing. check out macau casino names. the game developers and suspected that a gaming revenue in the months ahead, september will drop up to 38%. that is putting pressure on the names. china among them. 5,llowing japan, the nikkei 22 a 4% drop. some numbers to watch. on the downside, one of the is down.dx check out pioneer, up 4%.
we are waiting from the reserve bank of sydney. the fx looks like this. mining stocks the evolution continuing. minerals are a big decline or. let's check in on the currency markets. the australian dollar is very sensitive to what happens in china and certainly with the rba. per shot told you that -- aboutd salamat told you the economic story. that is why we see on a one-week basis, the aussie down about 0.25%. this is what we have. and significant up and down move. a lot of activity unchanged at 71 u.s. cents. the kiwi looks like this. following aswe are we look across the broader asia-pacific to round it out. a sense of how markets are
moving. which is sectors are doing well and oil rising a human expect oil and gas to do well. they are the only in the asia-pacific index advancing as of now. is in theto watch names that are moving across the age of the different. 15 stocks. -- across of the asia-pacific. petro looks like it is doing well. rishaad? rishaad: the pmi number and interest rate cuts and rrr cuts and devaluation. how does it all play out? tom is joining us now from beijing. tom, i mean they have done all of this. we have to wait until we see how all of the cuts in stimulus measures transmit themselves? is wehe puzzling thing are not really seeing all of the
easing that has come through since the end of 2014 starting to gain more traction in bolstering growth. rating ford a dog's the official pmi final reading -- today we had in the reading for the official pmi and the final rating. the concern is the drop of the official pmi. big advisors. these are the kind of firms that should be seeing a big benefit from interest kate russ and increased spending and so on. -- interest rate cuts and increased spending as so on. is the massives amount of stimulus has not really gained an awful lot of traction. little bit of weakness but overall it is positive.
pmi is pretty much over 50. what does it mean if we see we can is here? employment is key when it comes to services. tom orlik: that is absolutely right. one of the big stories in china over the past year has been the relative resilience of the services sector. as you mentioned, that is crucial for employment, services are labor intensive. factories are shedding jobs. then that is new work in the labor market. it is preventing a sharp increase of unemployment. one of the other troubling things is actually we are starting to see some of the weakness steep into the services . the official nonmanufacturing pmi came down. both remained above 50. and suggested a certain amount of weakness in services and employment. the official pmi and nonfactual
-- nonmanufacturing pmi points to job shedding. the services sectors is adding work the at a fractional rates. rishaad: tom, thank you. tom orlik, from bloomberg intelligence. samsung hoping that new round faced smart to watch will herald prices.val of its share in has details. -- sherry and has details. they call it the gear s 2? shery: as a whole day will gain ground. the wearable tech market has been much dominated by apple watch. -- they hope they will regain ground. there are 2 versions of this new on the kaizentch, operating system.
it will allow for mobile payments as well as remote-controlled of home devices. it will include at a glance notifications for calendars, e-mails and allows you to send text messages. it is a very tough market where apple has dominated. than 3.5 million watches in the second quarter. and they are the top provider of wearables after one quarter of sells. rishaad: that thing is samsung needs good news at the moment. shery: they certainly do. they are having a tough time especially in smart phone business. as they are squeezed at the high end and low end. high-end, apple and at the lower end xiaomi. they are seeing five considered of quarters of declines in a profit. now they're hoping some of their new releases will make a
difference. their stock. that plunge this year along of more than 18%. but they have wiped out $44 billion in market value since april. to give you context, it is equal to the value of general motors. one of their latest models, galaxy is receiving a lot of criticism -- criticism. if youalled pengate, install the pen the wrong way, it brings the device. a very bad news. rishaad: and they said it read the manual. thank you. let's keep is samsung. the company the long to a family , one of the most prominent families. the economy [indiscernible]
frost, foreign investors, are they turned off the korean market? richard: they always existed. in the aftermath of the korean war and during the shipyards and automobile industries but what we saw last week for instance is the biggest foreign selling from korea in two years. obviously it was part of a global rout. with korea, the battle with whereg founding members aliasing or was trying to combat that and an activist shareholder for investors. we saw it last month. founding members of a group, two brothers, battling to secure
succession. isthe concern investors have the management is more focused on the who is going to win in these battles and freezing out any opponents then on the actual bottom line of these companies. the earnings are tumbling and below. concern.that to a first of the succession and how we south korea. concern.ve that twin it is very worrying for a country where they count for half of gdp. part of is there any the market for investors find appealing? robert frost: outside of chaebol , they like smaller companies that are not bogged down by succession problems. targeting markets that what their product. one particular sector done well is cosmetics. rishaad: around the corner --
shery: always pushing cosmetic makers. quite straight given the strain exports have seen lately and chinese. [laughter] have done well selling out of chinese and give had that surge of china tourist visiting korea. and they have done particularly well this year. and they're been successes and people are holding -- hoping that will be one of the new growth industries as they move away from heavy industry. shery: what i find interesting and south korea is you find the move away from chaebols, but helping them out. you see the korean president granting a special pardon. rishaad: always say we will sort it out. what happens when wet to deliver? thank you. if it is not beaten, join them.
rishaad: this is "trending business." this past month has been something of a ride for gold after the devaluation of yuan. in a rare interview, a chairman said he expected bouillon to be a depression for a while now. gold prices have a close connection with the u.s. dollar while a strong dollar generally means negative on gold prices. gold prices have reached production costs. we have seen the bottom. we have asthma tatian's of the
u.s. injure rate hike in gold prices -- u.s. interest rate hike and gold prices may go down. rishaad: let's bring in mining analyst. do you agree with what he was saying? agree with his -- reporter: i agree with this comment. looking at gold prices, it is much less. and if wefunction look at cost the cost of the gold is increasing because -- new minds are difficult -- mines are difficult to access. prices according to bloomberg consists of data and gold price for next year will be around the same level as currents.
me something here. when we see what is going on in china and efforts to consolidate and the reason they want to do that is gutted the economy to scale it made the break even prices fall back. have they had success? yi zhu: in china, we succeeded. we look at the top 10 producers and it was 56% last year increased from 51% in 2011. the consolidation of the industry could encourage large producers to begin pricing powers and driving out small-scale producers to make the industry more consolidated. rishaad: thank you for that. we have to move along. issuingn thailand images of two people that want to question of the bombing. a foreign man of unknown nationality and a woman part of
a network that carried out the attacks. police have arrested one suspect. $84,000 put out for information. policeest came from good work and not a tipoff set the police chief. most $42st budget, billion, concern surrounding china's growing military power. they want to build more submarines. if approved, it would need the fourth of but just -- for the budget increase under shinzo abe. the u.s. military is preparing to hand control in afghanistan to local authorities all in the hope it will jumpstart the economy. facilities with an estimated value of $2 billion. the united states and the afghan government's hope to attract private investment.
and in new zealand is a step closer to getting a new flag after alternative designs were narrowed down to 4. areawill vote next year the current flag is often confused with australia's. paul allen is in sydney. let's have a look at the new designs, shall we. complained --y the motives you would expect. fin and otherse are variations. critically, all 4 of them have the absence of the u.s. jet that is seen as part of the problem as a cultural cringe factor of having another country's flagged on yours. two side-by-side,
somebody from not one of the two countries, it is hard to pick which is which. over the years, there's been a number of diplomatic incidents and confusion particularly at sporting events. getting a new flag would help. release ofspite the the designs, no guarantee the flag will actually be changed? paul: know, there is not. 53 percent inhas favor of no change. it is possible it may shift now that there are options on the table. those options will be voted on in a referendum in november to rank them. the one on top will be pitted against a the current flag and a second referendum down the road. we might have a resolution next year. rishaad: paul allen, thank you. reports on one cassette maker.
rishaad: itunes, spotify foul ball change in the music industry. one cassette maker. -- how all changed the music industry. it may be paying off because the shift of analog is helping the cassette maker dan to its own tune. >> you could characterize our model as stubbornness and stupidity. we were too stubborn to quit. making more audio than we have ever made at that as something to say into town -- in 2015. national audio company again
strictly as a blank medium supplier. it was not until late in the 1990's when many of the larger duplicators decided to go into cd replication just realized the cassette maker was not done. we were not in the music industry and we were not hurt you our spoken word customers went on. that is the beginning of our buying out our competitors and getting their equipment and restoring it to new condition and picking the music industry when it came back. >> the best part is analog. that man knows audiocassettes. we intend to be the last audio cassette company operating and we are the last operating. >> this is audio cassette duplication and these are electro sound in -- built in the 1970's.
>> while the tape is duplicated, this at the duplicated tape in the machine. this is not to set a loading department. -- and because set loading -- cassette loading department. seepart of the machine you was built with a cigarette wrapper in 1938 and marries a 1938 machine was all microprocessor. another secret to success. is to keep the best of my ability which is always a challenge when you are dealing with companies that are long gone. we have 40 or 50 more of the duplicators of which we use parts when we needed them. i am working to train somebody else on how to do this stuff.
to try to find somebody who understands putting up with a magnetic tape recorder is getting difficult. >> probably the thing that is really enlarged our business at a faster pace is the return of music to audiocassettes. the retro movement. thestalgia of holding cassette in your hand. >> we have an amazing clientele. we have a small band. here is the metallica tape we did. 35, life is not comprised of mp3's and earbuds. they like the sound of analog. was a drive by independent fans to get analog sound and it continues to grow and grow. >> i do not own an ipod or mp3