tv Trending Business Bloomberg October 19, 2015 10:00pm-11:01pm EDT
revision, china's president armed with an invitation to buckle happen palace and deals worth billions of dollars. do follow me at twitter. defensive health care tell coss, all appear to be in vogue. this one, bailout of mining stock. a look at that and the rest of the market action. >> it's certainly a bit of a mixed day. the regional benchmark index is slightly lower, mainly due to that fall we were seeing in common by --ty players. the shanghai switching between positive and negative numbers today. still concerned about slowing growth down weighing into the equity market. elsewhere we're seeing a little bit of weakness in the region in
jakarta. it's flat there. the high exaround a quarter of 1%, the semiconductor industry the biggest industry on that market. for the coz pi this -- kospi despite a weaker juan. new zealand is up for an eighth session in a row. the longest winning streak since november of last year. you can see that most of the losses are coming through for commodity prices. il and gas down .7%. metal all you will -- also weighing heavily. a mixed picture here in the region this morning. rishaad: thank you. that breaking news just came out. low lenka holding -- sri lanka
holding its deposit rates at 6%. we'll be looking at that but we're going to go to the sri lankan central bank. we're joined on the line. thanks so much for joining thus morning. the rationale, please? >> when we look at the economy overall, credit growth, domestic credit growth is still strong but not excessively so. so on the domestic economy we think that the 6 .7% economic growth in the second quarter is probably going to be repeated in the third quarter. on the other hand, inflation has it slightly negative so hasn't been responding as in the case in the rest of the world. right now we feel the positions
are still not appropriate for a move in either direction. rishaad: just looking at what's been going on with the fed of late and this debate over september, will they, won't they, how does that affect your thinking? >> well, it certainly does have an impact on our capital markets. incomeeen g.d.p. and net being sold off by institutions and even retailers. so on a net basis, we find that the ownership locally has fallen and that is, i think, a direct consequence of all this uncertainty about the fed and the prospect of a stronger u.s. dollar. that's basically a factor we have to look at this terms of not being able to reduce our rates, which are strongly positive in real terms, even though the -- is negative.
rishaad: any fund flows as a result of this will they-won't they attitude, arjuna? >> elling i think the market's probably waiting for the 29th to get some direction. as we know, fed chair yellen has said she will raise rates before the end of the year and that is narrowing rapidly. so will she change her mind on the 29th is i guess the question on everybody's mind. >> what have you been advising the government to do in order to programs reduce the deficit and also reduce some g.d.p. levels? >> obviously revenue collection by the government is a key element of the new budget. revenues in sri lanka have drastically fallen.
to 10% of g.d.p. in the last year that. has to be fixed and that the be the key focus of the bunt. i think we will see some very interesting new initiatives when the budget is announced on the 25th of november. rishaad: can you tell us what may -- they might be? [laughter] >> i'd have to give you -- rishaad: great talking to you. governor of the sri lankan central bank there. right. it was the phrase "a currency manipulator" and now the u.s. department has dropped another phrase softening the line on the hinese currency. we have the details. >> let me give you a background on the story. the.
m.f. went as far as saying the currency is no longer undervalued. the drop was this significantly undervalued from this report. it was in each report since may of 2012. now, it also recognized that when you look short term you have a lot of these transitory market force pushing down or up this exchange rate, again, over the next few weeks or programs months. still, undervalued. not very, just undervalued. our judgment is that the r.m.b. remains believe its appropriate medium-term valuation and we believe the factors are still there. you look at what this growing surplus account is part of,
these monthly trade surpluses. massive trade surpluses coming from china. on top of this you have foreign companies coming in bringing in money. so next f.d.i. is still positive for china. before i go on, the report also described several other currencies as being undervalued. couth korean juan, tie juan -- taiwan dollar included and they're also pointing out the euro. not so much the level of the exchange rate but a strong reliance on monetary policy as a risk to watch. that's one of our top stories. at the moment, the juan is a little bit weaker at this point. rishaad: we'll look at that story later in the show. our us your thoughts at twitter field. look at the other stories making
headlines. have a look at -- billionaires in part of the woods are having to answer some serious questions. >> that's right. the macau billionaire who allegedly bribed united states officials to win their endorsement of a conference center. a federal prosecutor has agreed to release him on $50 million became. it's said he paid hundreds of thousands to former u.s. assembly president john ash as well as frances lorenzo. he is one of six people arrested earlier this month in connection with two bribery seems at -- schemes amount the u.n. ash and lorenzo were also charged. following doimple bank. reports that a trader in frank furment made a $6 billion mistake. allegedly forwarding $6 billion
in payment to a u.s. hedge fund. the firm processed a trade using a gross figure according to sources rather than a net figure. that prompted a payer that was mag any tuesday higher. the european central bank and the u.k. fast ball conduct authority looking into the reported incident. it comes as deutsche bank sheds jobs and reworks its strategy. trying to restore the image and profitability of germany's largest bank. nintendo is back in the game with its new console and shares have been moving higher. nintendo reporting a sales jump with u.s. sales more than doubling from september from the previous month. en as m.d.p. reported game sales drops. anyone tendo is prepareing a new
console. the company saw u.s. sales of more than 500,000 sales of the you ined unit of the wi- console. sales of the wii hardware have increased. nintendo back in fashion with gamers. rishaad: just looking at this story that we're following on bloomberg. it's opec and indeed the oil price rather. we'll have a look at the implications of it. it's on bloomberg.com. still on the program, india has a new plan on cutting its dealt. we'll head to mumbai later in the program. the pomp and circumstance of the chinese president's visit to the ping's ok at what is on agenda. we'll return in a couple of minutes. ♪
rishaad: the stories make headlines around the world. canadian broadcasters say that prime minister steven harper has lost the general election there, ending almost 10 years of conservative party rule. it's predicted justin true due's party is -- trudeau's party is going to get enough seats to win the government. the stampede at the pill gillage in saudi arabia last month killed more than 2,100 people. it is almost three times the official saudi toll of 769 deaths. the a.p. says that 465 iranians dialed alone. they repeatedly blame the disaster on the saudi royal family, accusing them of covering up the size of the
disaster. john kerry is expected to sign deals worth billions of dollars. britain is hoping to address its lopsided trade rhythm with china. britain was the first major western country to get behind china's asian infrastructure investment bank and says it wants to be china's best partner in the west. more on xi's visit with roland. a professor at the university of hong kong. it's wall-to-wall coverage in china, isn't it? >> very much so these state-managed events, such as a state visit to the u.k., they play very well to the domestic audience in china and they're giving a lot of face to the presidency so this will be strumentize -- instrumentalized domestically but i think it's also a sign of the united kingdom to turn the page and say
we're going to upgrade the rhythm with china, which is something that david cameron has always said he wanted to do. referee after the dalai lama three years ago, which caused diplomatic relation put into ice effectively. what does britain get out of this >> on the one hand britain wants investment and china will invest in the british infrastructure and get a decent return over a long time. rishaad: will they get a decent return? >> i think so. you can see there's a lot of investment going into different european utilities so britain is not alone this. as china tries to diversify its economy and investment away from uying u.s. treasury bonds. but also, this is also an attempt to -- for china to improve its diplomatic relation
with europe. they need more partners. at the moment they have a strong relationship with germany but they want to expand this and make sure it stays in the e.u. rishaad: that's crucial, isn't it? >> yes, i think the people will want to hear from president xi himself. this has been a long time coming to see that the european countries come forgot. i think president xi is going to press that point. rishaad: from the left and right there is criticism coming in britain about perhaps britain bending too far here to accommodate china. what's the few -- view there? >> i think it's been a very obvious frill choice by the torreys since they came to power in 2010 that they want to improve relations with non-e.u. countries. china, but also australia, canada. they want to work together with these very closely. of course, there's criticism on the left from china's human
rights record. this will be kept in private. there might be some discussion but it will be in private. but on the right there's obviously a concern about national security because china is investing in nuclear technology. but overall i think national security issues at the moment are not so much at stake. they might talk a little about terrorism, the problems in syria. cyber attacks seems to be on the agenda. but this will be very much in the private conversation. rishaad: hong kong is not going to be brought up at all? >> i don't think so. i think cameron has made a choice to say we're not going to use hong kong. hong kong usinged to be an obstacle to chinese-british relations in the past and now they're seen there's no point in meddling in these affairs. it doesn't get britain anything so i think they're not going to
raise this. rishaad: i'm sure the chinese could get an even more decent return investing elsewhere. is it a foothold in europe they want? how does this play with washington? >> i think washington is obviously observing it but the u.k. is a very committed ally to the community -- united states, so i think like -- i don't think there'snything unexpected. before the summits there's usually a lot of preparation and bilateral conversation with the americans. what is crucial here is for the remainder of prime minister cameron's time in office, president xi will also be in office. this is a real opportunity for them to test the waters personally, to establish a mutual personal relationship that is official. he is about creating the personal rapport and trust to move ahead on a lot of things they have on the agenda.
rishaad: 42-gun salute, bucking ham palace, all the trappings of imperialism, sitting next to xi's drive against stravegans. how does this play out? >> what happens domestically in china, i think the expectation is that chinese leaders want to be seen as great leaders that are being acknowledged as responsible stakeholders in world affairs. he's been very successful in doing this. rishaad: and the world face is important to china. it's -- it costs virtually nothing. but it can cost billions when it comes to the investment program. >> the president is seen as someone who moves easily in capital investments. this comes very natural to him and he knows how to use this for
snolet -- ♪ rishaad: welcome to "trending business." i'm rishaad salamat. earnings headlines, morgan stanley had a bad time falling nearly 5% overnight after the chief executive called it the worst quarter since the financial crisis. the bank reported investment revenue suffered 59%. the asian private equity business. third quarter profit, way shy of estimate. analyst i.b.m. tumbled as well. shares down nearly 5%. i.b.m. saying earnings could be as much as 6% below analyst expectations and also reporting a fourth straight quarter decline. it's been struggling in its major businesses. the strong dollar also having an negative impact when it came to
sales. temporary mines shut down, meaning production targets were missed. let's go to sydney and paul. paul? paul: production down 13% on 583,700 price, to ounces. the market had been expecting much closer to 620,000 ounces and there we see the share price is down more than 5% today but it has recovered from a worse position earlier on. the reason was they lost a lot of production. earlier this year, there were two fatal accidents at two separate mines, which caused a 30sure of 11 days at one and at the others. if there's any good to be taken out of this, it's not a bad time to be an australian gold miner. the price of gold and australian
dollar still relatively strong thanks to the exchange rate. in the end, it was a miss. the copper target missed as well but newcrest retaining its four-year guidance for both products. rishaad: oil production released numbers and i guess cheap oil is bound to have hit them. >> it certainly did. they had a record production number. 7.42 million barrels of oil equivalent, which was a record for oil. the falling price, the revenue declined by 30% to $379 million. the c.e.o. peter button remaining upbeat saying they're stripping out costs and enhancing production as well and he said his oil search is in an excellent position to sustain reduced oil prices. oil search was the target of
looks a year ago but the company says they're open to any future proposals. rishaad: let's say what we have next. it's about this smog. singapore has been blanketted in smoke from indonesia's forest fires and now it's bracing from another unfortunate import from its neighbor. we'll be finding out what's happening there, plus a full market check. nikkei heading for their lunch-time break. this is "trending business." ♪ the only way to get better is to challenge yourself,
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rishaad: top stories, the u.s. treasury is dropping its language on china's currency while the wang remains a -- juan remains a bit low. the first u.s. government report since august. it was the biggest juan devaluation in 21 years. an diet in the u.s. today, accused of bribing u.n. officials over a property development. he allegedly paid hundreds of
thousands to former general assembly president and to a dominican republic ambassador also facing charges. canadian broadcasters saying prime minister steven harper has lost the general election, ending almost 10 years of conservative party rule. this is all based on early rules. the projection is that justin to you doe's liberal party is on track to form a government. but it's too early to call whether they'll have an outright majority. outperforming most of the rest of the region but investors there are about to head to lunch. >> rish, it is a little mixed because we've had that pickup coming through for japes -- japanese stock heading for that lunch break and news from taiwan
on a potential merger in the semiconductor space in the u.s. also picking up a little bit in korea, jakarta as well. up eight sessions in a row but elsewhere we're seeing weakness once again from chinese stocks in hong kong and on the shanghai composite and that drop in demodty prices weighing on the markets. herein are some stocks we're watching closely in the market. casino players, they had a big fall in hong kong trailed yesterday. they fell in new york with shares hitting a one-year low. analysts say that weekly gaming revenue dropped following that golden week holiday from the previous week. elsewhere, that fall in commodity prices playing into the australian market.
newcrest mining, it's share price down 5%. that is australia's largest gold producer. the energy space also coming under pressure. we heard from the reserve bank of australia saying it doesn't look like there are going to be any more rate cuts in the near future. that has given a pickup to the aussie dollar, a little stronger against the greenback. rishaad: the u.n. and china has been intervening to prevent its falling further. but the pboc also found a way to go discreetly. let's bring in david. how does this work? david: we all know they've gone through that reserves. obviously not all of it is because of defending the currency. there are various reasons. that said, you get these big,
state-owned local banks to start borrowing u.s. dollars and with that they then sell the u.s. dollars on the spot market, in effect raising the r.m.b. and then the pboc basically comes in and squares those positions and takes those onto their balance sheet. one of the reasons, when it comes to the reserves. they've drawn it down. 3.5 trillion. rishaad: it's gone down by 500 billion, which is a colossal amount. >> yes, that peak was in october of 2014 and i think another comes out in november. they avoid buying up r.m.b. on the stock market. so that's the trade as we're looking at it. rishaad: let's look at london nd david cameron's ambition to
get the r.m.b. playing in london as well as the f.x. hub of the world. can london's dreams come true is >> we know london's the f.x. capital of the world. so years -- 10 years it was barely used. 10 years from now it's going to be one of the world's big currencies and london wants a piece of that. but they'll have competition along the way. competition from a lot of european capitals and from hong kong but it's just all part of internationalization of china's currency. rishaad: so it's becoming more important on a global scale. >> more important. it's not going to go away. if china does win that, the decision is due by the end of
he year, that's a real vote of pretige, vote of confidence, i guess, in the juan for sure. >> in scurek -- zurich. we're talking about the r.m.b. not going away. it's a similar story that you saw back in the 1970's and 1980's when the japanese banks followed the big japanese cooperates around the world, basically their clients. this one, the c.b.c. getting their license to operate in zurich. i think that now takes them to five cities. paris, barcelona, milan, zurich, and amsterdam for china construction baungs. rishaad: a change in language for china today. that's been our top story. >> some of the steepest criticisms of chinese exchange rate has always come from the u.s. that's quite an about term. >> yeah, they dropped the "significantly undervalued," --
rishaad: that has been the mantra for the last three years. >> right and don't forget the i.m.f. changed their language as well. >> right, they went as far as saying it's no longer undervalued. so that department is a stem behind. rishaad: currency manipulators is what they've been calling them also. that language has disappeared to some extent. >> the biggest critics are the u.s. congress. they haven't changed their tune. rishaad: the dollar has never been manipulated, has it? anyway, just saying. right. go check out some of the other stories we're following for you. extended trailed on reports that western countries maybe -- may be interested. sources saying that sanders is also spoken too. the cap mark at $14.7 billion at monday's close.
it's climbed back more than 16% since possible sales talks were reported last week. a japanese company is the latest to push up corporate bond risks after it famed to properly inform insurances of faulty construction. it's also been out there and admitted ignoring quality control. a surge of 67% in just two days and toshiba bond rates has been rising since accounting regular later there were revealed in april. they're going to hold a news conference on that tilted issue there as well. united airlines finally making a decision about its ailing chief executive oscar munoz after a little more than a month on the
job. taken ake a leave and be by an interim replate bernard hart. relations between singapore and indonesia have been strained recently by the effects of widespread forest fires. now that's joined by the effect of the plunging rapier. christopher joins us now from singapore. what's going on here exactly? ies: this is a company that sells -- is a retailer of cell phones and retail is a small margin business already, as the slowing n company is down. they're paying in foreign occurrence and i they sell the handsets at home in rubea. they're starting to get in trouble. softbank bought a roughly 20% stake in this company this
maverplet it was seen already at the time as a little bit of a bailout. clearly wasn't enough, rish. rishaad: ok, but the question remains, why are they in trouble here, christopher? christopher: well, it's all about the indonesian economy, really. we've seen a number of restructurings lately, companies that had taken too much leverage. these guys went offshore, came to singapore. they have a listed company in singapore. they took a singapore bond. onshore loan in u.s. dollars and as the rupiah deappreciated against all these currencies, it became too much for them to bear so they're not able to pay their debts as they are right now. rishaad: quick word on when the last restructuring took place in indonesia? >> it was this year. last year we had another one. we've been having a number in
the past few years but these are overleverage companies and sectors that were hit. commodities, shipping, all these that were hit after the global financial crisis. in the past year or so hitting some of the commodities companies. this case is particularly special because it's the real economy that we're seeing here. this is the first crack in the indonesian economy that comes through to bond holders and these bondholders happen to be in singapore, rish. rishaad: what about singapore and the haze, how is it today? >> not to bad but yesterday in my neighborhood, it hit 480, which is considered hazardous. we're very sorry for all the people in the philippines suffering from the typhoon but the typhoon is also helping to pull the haze towards singapore. people are not very happy with indonesia right now and in some cases they're also having to pay
never before seen on this planet. as they go to market reform, where state-owned enterprises have more transparency, become public. they have to reduce corruption. they're going to have bumps in the road. then what happened in the summer is they showed they're going to have bumps in the road and their growth might be 6% to 7%. remember, 6% growth in a $10 million growth economy is probably $600 billion of growth. that's more than most country honest to planet. they have the wherewithal. they're quite bright, they move rapidly. they have huge issues but they're dealing with their issues and we should work with them to help them get through it but they have huge issues. a reminder to the american public, america has the greatest military defense ever designed called the atlantic and pacific
and we have friendly neighbors in canada and mexico and we have all the food sclorp energy we'll ever need. china is surrounded by historic enemies. they had a war, battle, scrimmage with russia. they have japan, philippines, north korea, pakistan, india and they don't have enough food, water, and energy. they have huge issues. it's going to be a long time before they overtake america in any way, shape, or form. my point, too, when i speak to the american military, they often tell me the biggest threat to the american military dominance is that the economy isn't strong. i think we should focus and make sure our economy is the best in the world. >> what are you doing in china? are you firing, hire something >> we look at every country, region, industry this way. the likely outcome in china in 20 years, will have 40% to 45%
of the fortune 500. 20 years from now, next quarter. i don't care about next quarter. we need bankers, traders, research, technology i-s, we have to keep up with anywhere rules and regulation. we need reel leagual and risk and h.r. and real estate. i've told our board we're not going to jeopardize our company in that. if it doesn't turn out will still.p. morgan be fine. we're not going to start building because they had a bump in the road in the summer. >> do your shareholders or clients allow to you make 20-year decisions. who's your priority? the people who bank with j.p. morgan or your shareholders banging down your door? >> i think a lot of share holders completely appreciate long-term investing and some
c.e.o.'s start making promises they shouldn't make. if i was the c.e.o., don't make earnings forecasts. you don't know what's going to happen every quarter. i don't even care about quarterly earnings. as a matter of fact, our quarterly earnings are based upon decisions made the last five or 10 years and by my principled successors. when you build people and relations and technology. you're not doing that nor short-term things. when we hopefully start opening up branches again in africa, i'm going -- doing that as a basis for the next generation. do the right thing, explain it to your shareholders and most will understand that. rishaad: j.p. morgan's jamie dimon. >> headlines around the world -- hundreds of south koreans have crossed the border for a rare reunion with relatives in the
north. many they haven't seen since the 1950's war. the first reunion since 2014 and most taking parts are in their 70's and 80's. they're allowed to carry small gifts but banned talking politics. four weeks into russia's air war against syria, bloomberg has been told the aim is far broader than previously announced. to help president assad retake as much control of his lost territory as possible. russia's campaign, which includes dozens of warplanes will last for a year. the head of european football says he's bulletproof and being agged through the mud in the idening corruption in-year quirey. michelle platini confirmed there's no written contract if
♪ rishaad: let's have a look at the world. a loss to private equity investments in china. we have a report from new york. >> in the monday session on wall street, morgan stanley became the latest u.s. financial institution to report a very rough quarter in fixed income trading. it shares were down some 5%
after a loss-related to a private equity investment in china and a drop in bond trading revenue. the c.e.o. called it the worst quarter for bond trading since the fast ball crisis. charles garner has vowed to run a far less volatile bank and said they experienced a hiccup unlikely to happen a again. the forecast missed the 53 cent average that analysts were looking for. big focus on trading here in the u.s. will have a lot to do with i.b.m. it cut its profit forecast. recorded a 149 straight quarrel decline in revenue. also it reported that the stronger dollar really crimped its international earnings and it gets most of its review knew from operations overseas. halliburton also had a negative
report. it said that sales fell 36% as the royal result has seriously reduced tracking operations and also cut another 2,000 workers. in terms of the bigger picture oner -- earnings, many strategists to -- do expect companies to report lower earnings for the quarter in part due to the stronger dollar. san francisco fed president john williams says he see as reason to raise rates soon, hence the job market, but slowly. let's listen. >> we want to get in just right and that means probably in my ew moving earlier and moving longer rather than more rapidly. >> he says if there are negative events in the global markets, they can also reduce the
increase in interest rates. rishaad: having a look at the start of the trading day in india, 51 minutes before the session starts in mumbai. two of india's airlines are on the verge of going public. indigo could see india's largest i.p.o. since 2012 and another large carrier could follow suit. let's get a report. a very good day to you. >> good day to you. india's primary market has been buzzing of late. you see companies from across the border looking at the i.p.o. and now india's largest carrier by market share are looking to raise money to pay off its dealt. we understand these funds will largely be used to retire debt which exists on its books.
indigo has also said that while it has sufficient money -- funding for this money, it is lower at this point because of e business model it has, indigo's the only profitable airline in india. india has one of the highest taxing -- taxes on aviation fuel and that along -- alone would tax them but independence go is not the only one. -- indigo is not the only one. we could see others before the end of the year. thank you. rishaad: thank you. that's it for this tuesday edition of "trending business." asia news next. we'll recap the big stories of the day. we'll be looking at the changing
>> with all due respect to larry david, bernie sanders impersonated you, first. >> it struck me today that a communist pipeline into the cuban baseball talent could be the greatest thing to happen to this organization. ♪ >> and a personal e-mail to hillary tonight, just in his basket, and the donald special mailbox. but first, nobody told us 2015 was going to be this way. joe biden is basically the ross and ch