tv First Up With Angie Lau Bloomberg October 25, 2015 7:00pm-9:01pm EDT
coming to you live from bloomberg headquarters in hong kong. let's check in on markets in asia. day of the week and a lot to digest for the weekend as investors look to china as they cut rates for the sixth time this year. australian equities climbing to 51%. we have a stronger aussie dollar as well. we are also counting down to the -- let's head over to japan. ekg 25 will open an hour from now. this was the view on friday, ahead of the chinese rate cut and also getting rid of their deposit rates -- deposit rate ceiling. levelt that, about 19,000 for first-time in a very long while and it is looking to climb right at the start of the session. dollar yen is strengthening slightly.
a public i looked at holiday in new zealand, labor day, so no trading there to tell you about. it is all about china's political elite gathering in beijing this week to finalize their fate -- latest economic blueprint. they meet with economic growth stuck below 7%, policymakers are stepping on the gas, cutting interest rates for the six time in a year and juliet has been watching this for us. , the brcargeted action try to do everything they can to combat deflation and the slowing economy. low, the oneord your deposit rate cut to 1.5% and reserve requirements for banks cut by 50 basis points. some institutions getting another 50 basis point cut and
he also mentioned that the pboc scratch that deposit rate ceiling. interest rate cut this year, that one your lending rate at a record low, you can see that the pboc is trying to do everything it can to stimulate its economy. angie: the guidance language was very interesting on the pboc rate ceiling. movess all comes ahead of on europe to japan, and possible tightening of monetary policy in the u.s., so we are seeing a lot of countries start to cut and then we could have that rate hike in the u.s. how at -- as you how this all affected the stocks, this is the biggest u.s. traded index of chinese equity and this is up by almost 3% in new york trade. we also saw the bloomberg age of u.s. traded equities rise about 3% on friday.
a lot of positive momentum coming through. angie: it was incredible to see. do you think that the same activity? >> i think so. if we look at the specific chinese futures to see the index , it's just a gain of more than 1%, the a 50 -- china index also higher, as is the china 120, all of it looking very positive. i think we will see those consumer stocks really rally. it to be a very positive start to the trading wake. -- to the trading week. angie: a lot of people scrambling into offices, thank you so much. let's continue to talk about that rate hike. it's a precursor to what we might expect this week from the communist party meeting in beijing. as the 13th five-year plan comes together, top agenda items include a possible revision to
keep structural changes to the economy. scott joins us with what we can expect. >> there are a lot of agenda -- this ishis is the the president's first five-year plan so it's his chance to make his mark. some economists say this could transform the economy and this costs -- this comes as the economy needs these changes. the structural reform comes with everything from interest rate liberalization to keep special changes that make government a bit more accessible than it has been in the past, supporting a new watch partner class. we will talk about that in a moment, but the big headline may be a lower gdp growth target. growth as it7% becomes -- as it continues to be an issue in china. the target may be revised so you have looked -- slower growth, this move with the currency reform, and pressing the case
for the currency as a reserve current. that is what they will be focusing on. let's not forget, this is not just for the economy, this is the military, population, environment, a sweeping agenda. angie: some economists say this will be a transformational plan, so let's read between the lines here. what can we expect? >> you may see according to some reports, less government intrusion or interference, more opportunity for individuals to create businesses and the innovative. they want to transform the country from the manufacturing economy to a services led with a creative class and that leads to higher incomes. that is key to the promise three years ago that china would be a moderately well-off society. this five-year plan may allow him to deliver on that. angie: watching them for us, thank you so much. you can get more on all today's top stories at our digital
destination. bloomberg business, bringing the best together. bloomberg.com, how gold prices are destabilizing hedge fund -- hedge funds. -- the dismissal of a $50 million privacy lawsuit that -- checking other headlines this monday morning, we describe the price of oil as a gift to the world which could help spur economic growth. thatpects to that expects prices to rise to $60 per barrel next year. growtha expects demand to rise to a five-year high. global oversupply has caused it to tumble more than -- former fed chair ben bernanke says janet yellen is facing some tough decisions.
in an interview with cnn, bernanke says the central bank must decide whether the u.s. can upset the global slowdown on the economy with -- had to take into account the china -- china and emerging markets. -- as islamic commodity prices raise on emerging markets, that is the slowest expansion since 2009. the bank of japan's share of outstanding government bonds swelled to have the market by 2017 even without an expansion of stimulus according to bank of america. the governor -- aiming for an ¥8 trillion expansion. both the np and bank of america expect boj will have to --
shares in blues go steal trading in early morning trade in australia right now, 16 .5% higher -- 16.5% higher. about 40% in the first half of next year, let's head over to paul allen in sydney for more right now. blue scope has been aggressively cutting costs to cope with a global steel glut. it looks like it is paying off. >> it certainly is, although they had to make some a brutal choices. they announced this morning that a couple works that is of hours south of here is going to remain open. that's a significant employer in the region, about 500 jobs have been cut their. blue go coming to an arrangement with the unions and the state government to essentially strip out $60 million worth the labor costs. wage is been a three-year freeze as well as job losses and
the state government is going to give blue scope three years payroll tax deferral as well. that has helped them to keep the plant open. to give you some context of the glut, port camelot is australia's largest steel workers. china annually produces 45 times that of that plant. now he complains that prices for their product are the lowest since 2003. track toe is on improve its earnings by 40% in 2016. angie: blue scope on the acquisition trail? >> yes, they are in that has also helped the share price this morning. they will buy a 50% stake -- a 15% stake in a company that is a us-based seal manufacturer and
they like the look of it -- us-based steel manufacturer. blue scope had the last right of refusal on whether or not to buy that chair and they decided to exercise that. they will pay for it through a domination of issuance and longer-term bank debt. it is a good news story for blue steel that blue scope this morning. -- blue scope this morning. angie: thank you so much. we will stay in the commodity space later in focus because later in first up, we will be speaking to the ceo and managing director of woodside petroleum. peter coleman live from singapore and the international energy league at a: 20 in hong kong, 1120 -- 11:20 in sydney. rebalancing the
angie: welcome back. ticky some of the headlines around the world. leaders in the eu in duncan's nation have begun an meeting to find an agreement on rising prices. german chancellor for the summit , the sixth this year on the biggest refugee influx since world war ii. the eu will fall apart unless it comes up with a solution. exit polls say polish voters have delivered an unprecedented parliamentary majority to the conservative law and justice party in sunday's national election. the newd to become prime minister, promising a $90
million central-bank loans program, increased spending on child support, and a tougher line on migrants. poland's economy has been the fastest-growing with 20 but 20% of workers to live in poverty. korean families from both sides of the divided peninsula have met their loved ones in the latest round of officially sanctioned reunions. about 250 south korea -- south koreans travel to the north for meeting -- for the meetings. more than 30 of them are aged in the 90's. tensions remain high, south korea said iron warning shots on saturday what the north korean patrol boats that across their defective maritime border. time for a look at some of the stories we will be following for you right here in asia this week. the new $3.2 billion casino opened on tuesday with billionaire chairman lawrence and james packard due to attend
studio city. hisio city has been granted for 250 gambling tables at the macau resort. we see the motor industry in japan the tokyo motor show on wednesday, one of the biggest in the world. the next generation is suspected to be the theme here. companies are due to display their latest electric cars. we will get results from some of china's biggest letters on thursday with the bank reporting third-quarter earnings. it is expected they will show weaker profit growth. on friday, japan's central bank is going to hold its latest monetary policy meeting and a growing number of economists surveyed by bloomberg think that announce -- you announced even alone is not than -- even a loan is not
enough and they are flash for cash. speaking of slashing some cash, let's bring in economist sung zing went from private banking in singapore because that is what china hopes to do with the latest round of cuts. the sixth one in a year since last november. what the you think it's going to achieve? -- what do you think it's going to achieve? >> hopefully it's going to support the economy from slowing down further. bottom line here is, is the economy generating enough growth to create employment opportunity that will be soaking up the 10 plus million urban jobs that will be coming on that will be the labor force joining the labor market? if it can, it should be comfortable. if not, they can do more. angie: 7% is the stated goal.
we saw third-quarter gdp come in at x .9%. how low -- how slow can gdp in china grow to still support labor growth? remember, this is a very much centrally planned economy. four decades ago, there were not any lawyers or accountants in the economy at health. services is over 50%, 51% of the gdp itself. it is still a communist run country so it is centrally planned. whatever they are doing now is it irrelevant plan that will essentially hope to create enough jobs in the various parts of the economy as a look for as many growth drivers as they can, now more so from the services wide to create implement opportunities. they are still looking for 10 plus percent and minimum wage growth.
plan, whether they're looking for is what -- you many to cut rates on the monetary policy side, liberalize rates as he opened the economy itself, the government dealt with the be looking to support fiscal policies, so it's still not quinn to beat him month -- not just a monetary policy, but the -- it will be a combination of physical monetary, as they look to rebuild the economy as it looks to react more jobs, especially from the services side. whatever number it is, it's really about stability that they are looking at in the coming years. 200 of the communist central planning committee converging on a very heavily guarded hotel in beijing, very andted media access their they are going to be trying to figure out where china is going to go in the next five years and as you said, fiscal policy is
good be a big part of that, what is on your wish list? china may be the largest or second largest economy in the world defending on how you ejaculate, but because it is very much centrally planned, it -- depending on how you distribute growth. the city areas get all the money and the investment, etc. while be rural area may lag behind so -- there is rebalancing through infrastructure spending, hospitals, sools, that rebalancing will take a lot of resources in terms of just the normal infrastructure spending. a lot of focus will be on the side of education, environment, the boring bits of the economy which are even more important going forward, not just lifting the standard itself but the
overall quality of life. angie: i wanted to get your thoughts on what happened over the weekend, the -- getting rid of the deposit rate ceiling. banks can now compete with depositors and with each other. the language was very interesting because it wanted to have the banks be very disciplined about it. they said the ceiling is gone, but don't go crazy. is -- it would let you have a little bit of freedom, but they would like to guide you in a direction that they inc. is better for the overall benefit of the people and the economy itself. the hands of the government on the central bank still be there, you'll still be looking over the shoulders of agencies and banks and companies. whatey look to see whether
-- whether it's being implement it on the ground, it's off of the greater good of the economy in general. angie: that's why we are watching very closely as to the goings-on in beijing over the next four days. thank you so much for that. joining us from singapore. coming up next, sony is set to be in talks with the -- toshiba over an image sensor deal. ♪
angie: australia will play archrivals new zealand in the cup final. the all blacks confirm they are still favorites to the underworld title with a grinding two-point victory over a determined south africa and in sunday's game, their rivals proved too good for argentina -- 29-15 win.5 recoveredamericans from a sloppy start to keep up the pressure but -- australia reached their north world cup final and that match
will be played next saturday with the winner to become the first side to claim three world titles. checking other headlines today, sony is set to be in talks to buy toshiba's image sensor unit. sony looking to build on some innate -- dominance in the smartphone camera sector in sources say a deal may be announced as early as this week. toshiba is looking to raise cash afternoon accounting scandal. -- after an accounting scandal. stephan ballmer has told us he is not interesting -- interested in a seat on twitter's board. the clippers owner and former microsoft ceo took a 4% put her stake this month and said he bought in before he knew jack
dorsey would return as the permanent ceo, he sees as a good move for the company. twitter is a company that has all kinds of opportunity. there are all kinds of things that could be done better and i am impressed with how jack has jumped on top of it but it is such a strong underlying asset, the ability to of -- to improve the product, jack is on top of it. the ability to continue to drive monetization, jack is there. angie: coming up next, getting set ship out. japan posts its ipo today, we will take a look at what's expected in a moment. we will be live from t the only way to get better is to challenge yourself, and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment,
monday herea gray in hong kong. 7:30, waking up to a little bit of a cloudy day. we are 30 minutes away from the open of trading in japan and south korea. you are watching "first up." the top stories this hour, china's central bank has scrapped a ceiling on deposit rates, tackling what it describes as the riskiest part
of bringing up interest rate. the pboc cut its benchmark interest rate and reserve requirement. the sixth interest rate cut in a year. top officials are gathering in beijing to sign off on the country's 13th five-year plan. abu dhabi has described the price of oil as a gift to the world, which could help economic growth. to $60cts prices to rise next year, calling this a win-win situation for consumers and producers. iea expects demand growth to rise to a five-year high in 2015. global oversupply has caused brent to tumble more than 25% this year. blue scope shares soaring in sydney after it announces a u.s. joint venture. australia's largest steelmakers as it will buy the remaining 50%
of northstar venture for $720 million. the company expects underlying earnings to grow by 40% in the first half of next year. let's check on markets in asia. all that news compiling into this. blue scope really helping to lift the equities on the asx 200, climbing 18% today. right now, we are seeing australian equities climb 0.5%. we got some stimulus moves from china. also counting down to the open in japan and korea. this was the way nikkei closed on friday, ahead of that decision. we've got futures in chicago pointing to a higher open above that 19,000 mark. now, 121.40.
china's biggest reinsurer against trading on the hong kong stock exchange today. this is expected to be the biggest test of investor interest since china's stock rout in june. we've got shery ahn with the latest. that chinanow reinsurance is expected to raise about $2 billion. it is offering 5.7 7 billion shares at 2.7 hong kong dollars each. what that means is that it implies a 1.3 times estimated 2015 book value. that compares to other global insurers and is in line with its closest. . their october valuation was at a discount. we may expect something similar for china reinsurance.
they are both insurers that focus on property and casualty lines, instead of life, such as other insurers. that's what we are expecting. we know that china reinvestment had 67% of its first-half net premium came from property and casualty lines. angie: will this ipo breathe new life into hong kong's listings? shery: that is the hope. you have to remember that there were $2.8 billion of such offerings in hong kong between july and september. that sounds like a lot, but it is down 50% from a year ago. done, chinaal reinsurance ipo-ing today, we to $23 a dropped billion.
the reasony that china reinsurance may be doing well is because they are the only reinsurance company now to be listed in hong kong. that does not imply that other upcoming deals could do as well. angie: shery ahn, thanks for that. another public listing we're tracking today, japan post. the company is getting set to post its ipo. nakamura eugene following this in tokyo. what should we look for today? how does this play within the current market rebound? eugene: morning, angie. expect the announcement today after the close in tokyo. what we are looking for is probably them to price into the top of the range. pricing's, we got the for japan's banking unit and the insurance unit, and both of those are priced at the top of those ranges.
the same announcement for the holding company today. this ipo, the price was initially announced, the expected pricing was announced in the second week of september when markets were tanking. since then, we've rebounded a lot. but, that's why they are being priced at the top of the range. since last week, since we had the pricing for the banking unit , the market is up 3%. the market keeps going up, but the prices are fixed at a very attractive level. as we head into the actual ipo next week and the pricing being very accommodating, very cheap, you have to wonder how much are shares going to pop up when they list on november 4. looking at the movers in global
move of 10%, 15% on a first day, might be possible. angie: wow, ok. we've got all three prices right now. what do you think is most attractive to investors? yuji: i think the banking unit is by far the most attractive based on people that i've talked to. this bank is the biggest in terms of assets in japan. when japanese people think about japanese banks, they think of mitsubishi, mitsui, and mizuho. but japan postbank is bigger than all of them. it could become a mega-bank. even though it has so much money, it doesn't actually lend anything out. 99% of its money is tied up in investments. japanese government bonds, equities, things like that.
-- there's a lot of excitement that it could get more into the loan space. it could begin to invest more overseas. banks,anese regional they do pretty well, and this company could now step in and compete with them. i think people are quite excited. angie: very good. thank you so much for that, yuji nakamura. time now for a look at some of the top corporate stories. here's juliette saly. said to the seeking a one-year waiver on the financial conditions for a $1.4 billion bank loan. sources tell bloomberg it will send out a formal request next week. 250operator has been given tables for its new project.
the new resort opens in macau tomorrow. honda could increase cooperation with general motors according to the ceo. the two companies worked together on fuel cells and they are in talks to expand cooperation behind that agreement. no decision has been made by either carmaker. year'sims to raise next sales target from this year's goal of 950,000 vehicles. volkswagens ceo will join german chancellor angela merkel on her trip to china. matthias muller will give merkel and update on the automaker's inquiring into emissions manipulation next week. toper will also meet executives in china as the country tries to limit the fallout from the pollution scandal. only about 2000 vehicles were affected in china. beijing has launched an investigation.
those are the latest corporate headlines. i'm juliette saly. angie: let's take a look at what investors in the u.s. should keep their eye on this week. here's su keenan. su:bank the week ahead -- the week ahead on wall street will continue to approach the peak. twitter will and be among the 160 companies set to report. among the economic reports that ambassadors will be digesting, the u.s. economy or gdp probably group at less than half the pace of the second quarter. on the home front, sales of new u.s. homes probably held close to a seven-year high on the cups of cheap bowwoiung -- cheap borrowing costs. consumer confidence is expected
to ease. the company that was in the crosshairs of a big battle in the past week, its stock was up trying to defend against allegations that it has vigorously denied about an accounting regularity. it will hold a conference call with its ceo and members of the risk audit committee on wednesday. in new york, su keenan. angie: coming up next, as china steps up stimulus, we are going to ask our next guest what is in store for party policy. ♪
it follows last month's explosion on board a boat, which is said to have been an assassination attempt. the vice president was detained on saturday and will be charged with treason. the blair has said that 2003 invasion of iraq was partially responsible for the emergence of islamic state in the middle east. the former british prime minister also apologized for mistakes made in the postwar planning. blair insisted that toppling iraqi dictator saddam hussein had been the right thing to do. the woman once known as the napalm girl from the famous vietnam war photo has been receiving laser treatment for her scars in the u.s.. she is being treated at the miami dermatology and laser institute for scar tissue that runs along her left arm and her
back. the treatment is relieving the pain she suffered for more than 40 years after she was caught in a napalm attack on her village. prize.to won a pulitzer a key meeting of china's communist party leaders kicks off today. there's no for most agenda, but we have been asking our regular contributors what the party's top brass should be focusing on. here are their thoughts.
angie: let's bring in jim summers, a senior consulting fellow who culminated his career as a diplomat for britain as consul general in chongqing. we welcome you. thank you very much. we had dan simmons, who was in power at that time, and the five-year plenums at that time talk about state-owned enterprise reform.
we are still talking about it. >> and as it gets, the progress has been pretty slow. looking at this meeting today in beijing, we won't see much that's new on state-owned enterprise reform in my view. just a couple months back in mid-september, we had a rather puzzling series of announcements from their various businesses in beijing. some of them hinting at perhaps a little more momentum being given to state-owned enterprise reform, some suggesting that the party leadership is going to stay unchanged. i think the reform story is one that is only going to unfold very slowly. year, as we'vet seen the consolidation of power, it really has diverged between economic policy and what's driving china socially as well.
where do you think it's going to fall on the shoulders of the 200 central party planners over the next four days? >> this meeting, the main outcome will be some sort of framework document setting out what the program will aim to achieve between 2016 and 2020. we won't actually see the full program this week. that will come out in march next year. that will give the detail, that will get the numbers. i would be very surprised if any stats come out over the next four days. angie: do you think there's going to be a lot of give-and-take, back and forth, between party members? >> i think the opinions are pretty consolidated already. there will be some discussion and there may be some slight shift in momentum. i think the content of this next five-year program, most of it is
already out there. angie: what have you heard? >> we look back to november 2013, the third plenum two years set out a very comprehensive reform plan through 2020. the timeline there is important. looking for now, i think, is a little more detail. perhaps a twist in policy terms. growth, greenreen industry, dealing with environmental challenges, that's something that has been moving up the agenda. still not quite clear what the party's overall strategy is, but that's the sort of area where we can look for more detail. angie: are we going to get some prizes in terms of fiscal support, policy support, for that industry sector? >> i think we will see more in
that area. i don't think there will be any big surprises, to the honest. energy,chnology, new these have been ideas that have been talked about for a wild. angie: any surprises overall? >> i think this week, we won't see any big surprises. i think we will see more continuity. particularly in march next year, we will see some focus on the numbers. people will be looking at what sort of gdp growth target is set from 2016 to 2020. that is likely to be a slight tick downwards from the 7% we saw in the last five-year program. i don't think you can call that a surprise. the chinese economy has been slowing. it is not a new idea. angie: what about xi jinping, who really slowed down the economy through anticorruption and anti-extravagance drives? politically, very important.
socioeconomically, very important to keep the chinese populace happy and content. how much of that is going to influence what's being discussed? >> the politics is really key. if we look at what xi jinping has been focusing on, it's the politics, the anticorruption drive, the broader government agenda, improving the quality of governance. and he's focused on foreign affairs. all these overseas trips. for him, the economy has come a little further down. i think the economic reform agenda has been pushed into the state council and the government. a couple of areas we've seen steady managerial financial sector reforms, fiscal reforms, ange systemh
works, these are quite low-key in china. other areas, we haven't seen much. right, we will wait to see what we hear. likely not until march, as you said. >> the details will be in march. angie: tim summers, thank you so much for joining us. next, disappointing earnings could make market movers out of a couple japanese stocks. our reporters make their stock picks when "first up" returns. ♪
juliette: i'm looking at a retailer that makes children's wear. it has come through with preliminary first-half numbers and operating loss at ¥160 million versus its own forecasts. this is a stock that moves quite rapidly. it was up 12.5% on friday. over the past 10 years, look at that, down 87%. angie: ok. and then we go to zen and talk about, what? zeb: taking flight. mitsubishi developing a regional jet, and there's a problem with the steering. they were supposed to launch a text flight next week. it will be delayed. angie: and, shery, welcome back. shery: i'm going to wac you all wacom. it's called
they manufactured tablets and touchscreens. it is a technology company. they lowered their net income forecast 14%. operating profit down 13%. outlook on expected shipment decline for smartphones. about 10 years ago, they were quite popular, but now everyone has a smart phone. shery: they supply parts for smartphones as well. since the smart phone market has been so stagnant recently, very overcrowded, i think they are going to take a hit. juliette: get etch-a-sketch. angie: that is back in the day. thanks, guys. that is the verdict from the stock exchange. back in an hour. looking at the next hour of the show, we are speaking to the ceo of australia's second-largest oil and gas producer.
angie: the five-year plan. china's ruling elite gather in beijing to discuss the next economic roadmap as interest rates are cut for a sixth time since november. oil,rned takeover bid for so what's next for woodside? we're going to speak live to ceo peter coleman. holdings set to name its final share price in an ipo set to top $12 billion.
welcome to "first up." i'm angie lau coming to you live from our asian headquarters in hong kong. elite arelitical gathering in beijing right now to finalize their latest economic and social blueprint. this is the 13th five-year plan. they meet with economic growth stock below 7%. policymakers are stepping on the gas once again, easing bank reserve requirements and cutting interest rates. juliette has been watching this for us. juliette: once again, a little bit of a surprise for investors, although we were expecting stimulus. as you mentioned, the sixth rate cut since november. this is part of the bid to combat deflation in that economy. cutone-year lending rate from 4.6%. that is a record low. the one-year deposit rate cut
from 1.75%. the reserve requirements cut by 50 basis points for all banks. some institutions received another cut as well. and the deposit rate ceiling scrapped. that limits the rates that banks can pay savers. all this part of the k chang's effort to stimulate the economy. we are certainly seeing the manufacturing and construction industries under significant pressure. angie: and investors in u.s. markets took that and ran with it. juliette: this all happened after the market closed in asia on writing. -- on friday. we saw the chinese stocks rally in new york. you can see the bloomberg gauge rose about 3%. we saw consumer discretionary stocks really leave the gains.
the sixth interest rate cut from the p because he, investors -- from the pboc tom a investors say thank you very much. in and around the half, china markets, online. we are already seeing the miners leave the games. you can see future suggesting a big pickup in all the chinese players. it does look like the pboc is going to be behind yet another stockmarket rally for china. angie: thank you so much for that. early indications are that investors are welcoming china's surprise rate cut. let's get now to zeb eckert on the markets today with the opening indications across asia. futuresare seeing index for the asia-pacific rising as markets get underway in australia, japan, as well as south korea. we are generally seeing gains. bad news is good news. is suggesting that there are
further economic headwinds in that country. then again, it was widely anticipated by the markets. green across your screen today. new zealand is closed. as the australian session gets underway, seeing gains about 0.25%. keep your eye out for blue scope today. it is to buy a stake in northstar for $720 million. some earnings news in japan today, the nikkei starting that they hire, that is what the index futures indicated. we have sony with $165 million deal for toshiba's image centered unit and panasonic first half operating profit coming in better than expected. let's look at currencies as well as commodities. china right move, you would expect some action in the currency market.
equities starting the session higher. that is the indication across the asia-pacific. korea,ia, japan, south that is what we have as we await those markets. 6.3506. right now, there are comments from the chinese government that they expect the chinese currency to the included in the reserve basket of the imf soon. take a look at dollar-yen. 121.21.en right now the aussie is up about 0.1%. expect theaders chance of a rate hike. china very firmly in focus today. thank you so much for that. that rate cut is a precursor to what we might expect this week from the communist party meeting in beijing.
top agenda items include a possible revision to china's growth target and key structural changes to the economy. we've got a bloomberg reporter here. what can we expect from the meeting today? [indiscernible] members.re than 204 on top of the agenda is going to the reviewing and approving china's next five-year plan. it is going to be the social and economic blueprint for the next five years, from 2016-2020. angie: what are the expectations as you look at what's going to happen over the next four days? what is everybody expecting? held in aoing to be hotel in beijing.
get a going to communication of the plenum. plan, we are-year going to see slower and greener growth models. see theu're going to transportation plans for the economy to change from investment, export-focused, two more consumption and service innovation-based. r&d research and also -- [indiscernible] project is going to be heavily featured. angie: do you think there's going to be any reference at all to monetary reform, especially had rate of the imf decision to include or not include you on from the sdr basket.
china made very public it wants to join the sdr basket. gradually rolled out a series of measures to push for that goal. but we suspect it will be detailed measures. probably, the existing players will be incorporated. angie: got you. a lot of economists say this is going to be transformational. how should we read between the lines of any communique that comes out today? >> this is very important for xi jinping himself. tot is the plan for him leave the country, to fulfill in goal, his promise he made 2012, which was to by 2020,
double gdpoing to j level and income per capita. that is massively significant for him. of're going to see a lot social and economic indicators very closely related to that goal. angie: very good. thank you so much for joining us and giving us that context. we look forward to that communicate. checking on some other headlines, former fed chairman bernanke says janet yellen is facing some tough decisions. bernanke said the central bank must decide whether the u.s. can offset the global slowdown. he said yellen would have to take into account the weakness in china and emerging markets. the imf did cut its global andth outlook to 3.1%
slumping commodities weigh on emerging markets. share ofof japan's outstanding government bonds will swell to cap the market by 2017. that according to bank of america and bnp. shat governor kuroda i' easing program now two years old, boj will have to increase monthly purchases. america and bank of estimate the boj will have to buy as much as ¥120 trillion of notes in 2016. sony is set to be in talks to buy toshiba's image center unit. sony is seeking to build on its dominance in the smartphone camera sector. a deal may be announced as early as this week. sales are expected to grow more than 60% over the next few years. toshiba is looking to raise cash after and a counting scandal cut
eu nationsers from have agreed on what they're calling a 17 point action plan to tackle the migrant crisis. the plan came out of an emergency summit called by german chancellor angela merkel, the fifth this year on the biggest refugee influx since world war ii. greece will increase its capacity to 30,000 and financial support will boost the ability to process arrivals. anish voters have delivered unprecedented parliamentary majority to the conservative
justice party. it is poised -- the new prime minister promising a $90 billion central bank loan program, increased spending on child support, and a tougher line on migrants. korean families from both sides of the divided peninsula have met loved ones in the latest round of officially sanctioned reunions. traveled toreans the north for the emotional meetings. high.ns remain south korea says it fired warning shots on saturday towards a north korean patrol boat that crossed their de facto maritime border. markets trading in the asia-pacific. we had a nice gift from the pboc. japan's nikkei above that 19,000
sixths we saw the interest rate cut from the pboc in a year. kospi is also seeing gains. commodity producers in australia seeing some big gains as well. to put all of this in context and perhaps give us a few ideas on how the league is going to unfold is the global head of manager research at towers watson. it is a busy week. , the fed, maybe they will surprise us instead of a december hike. pboc already surprised us. what do you think is going to happen? >> there is definitely quite a lot of news in the market, which creates a certain level of uncertainty. it is probably fair to say that
in the last couple of months, the level of confidence among institutional investors has decreased quite a bit, and consequently, the volatility which we see in the market, china is obviously very big news globally, and there are a number of different counterbalancing things which are happening in this economy. obviously, there are some concerning factors there, such as housing markets, currency, stock market, the volatility there, also, the buildup in corporate debt, which probably is one of the more recent catalysts in the nervousness of investors. at the same time, you have some counterbalancing factors, such and ay high reserves significant portion of this corporate debt --
angie: a little more stability coming out of china. do you think that optimism is going to flow through to institutional investors and equity investors? >> in the last couple of months, it was much easier to find pessimists about china than optimists, but there have been a number of steps that have been taken by the chinese authorities. angie: are you among the optimists? >> i would probably say that we advise our clients to tread with caution in this market. at the same time, this level of nervousness probably creates opportunities for active asset managers and institutional investors who have the long-term horizon. angie: where do you see those opportunities now for investors? >> if we talk about emerging markets as a whole, there is
this general trend that china is slowing down and increasing levels of debt coupled witha strengthening of the dollar, it is almost a broad brush approach to emerging markets. in reality, they are very different. you have economies that produce commodities. you have economies that consume commodities. there's also a different type of debt. as a result, you have a certain some investorsch will create opportunities. angie: we are almost out of time. give me some ideas as to which emerging markets provide opportunity. not burdendefinitely one economy. that would be very bold. it is important to build what may seemd
kong. these are your fx headlines. china's yuan is little changed in offshore trading today as china lowered its benchmark rate. it also scrapped a cap on deposits. analysts say fx intervention may be the next step. there's news about china's push to include the yuan in the staple of imf reserve currencies. a chinese official says the imf has given the government strong signals the yuan will join the sdr soon. china's communist party leaders are gathering in beijing to chart the next five-year plan that will guide the economy through the end of the decade. german chancellor angela merkel says an agreement has been reached on the eurozone plan to manage the huge influx of refugees. eun-claude juncker says that states have agreed to refrain
from taking unilateral decisions. alexis tsipras labeled it a humanitarian crisis. we are also following news from malaysia. , 400alaysian ringgit million of it, the malaysian government may collect 400 million ringgit's from taxes on the rich. this as the government tries to recoup tax money the malaysian government says 2 billion people pay income taxes in malaysia. that is a check of the stories driving forex markets this morning. angie: earlier this month, woodside petroleum reported a 45% drop in third-quarter sales thanks to the slide in global energy prices. part of a surgeon m&a activity in the sector. what is next for woodside?
let's ask the man himself, ceo peter:, who joins us live from singapore. thank you for joining us. tell us about oil search. is it still in the cards for you? it's something that we are still open to having conversations about. we put a proposal to get feedback in the marketplace. we are still waiting to engage with them. the two companies together are much stronger than the two companies apart. advantagee can take of the cycle as it plays out. a fairly priced offer and it is going to take time. angie: how are you going to sweeten the deal? you don't always have to sweeten deals.
over time, expectations come together. i think we are starting to see some m&a activity in australia. , the people's view of the world is starting to get a little closer. there's the normal dance card that we go through, approach, rejection. things come together over time. we need to allow things to settle down for a while, and then hopefully things can move forward. angie: it is a little bit of a dance. outside oil search, any other dance partners on your card? open dance a pretty card today. you can see, as the market starts to play its way through, many companies are in cost-cutting mode, quickly moving to a mode of saying, we can survive now in this
environment, but how do we grow and thrive? i think that's a different conversation. that is going to play out over the next few months as the industry starts to realize that oil prices are going to be around this level for some period of time. toy're going to have fundamentally change the and have to think really hard about what the future means for them as they go forward. angie: the m&a space has been very interesting as of late. haliburton-baker hughes, do you have any concern there? peter: not really. sector,ervice company over time, the industry has demonstrated that consolidations are required. people like ourselves demand more efficiency out of those companies. i think they are just natural things that will occur. something like that, something else starts up again.
advantage gets competed out of the market pretty quickly in the oil and gas sector. it is global in that respect. angie: peter coleman, thank you for joining us in singapore. thanks so much. next, it's not on yet, but we're going to take a look at signs china's reserve currency did will be a success. fx headlines after this very short break. ♪ ♪
angie: it is a: 30. that is a live shot of victoria peak. the view today is not going to be very good. it is gray, cloudy, smoggy. we are an hour from the open of trading and you are watching "first up." the top stories this hour. china's central bank has scrapped the ceiling on deposit rates, tackling the riskiest part of freeing up interest rate. the pboc cut its benchmark rate and reserve requirements, the
sixth interest rate cut in a year. top officials are gathering in beijing to sign off on their next economic blueprint, the 13th five-year plan. sony is said to be in talks to buy toshiba's image sensor unit. sony is seeking to build on its dominance in the smartphone camera sector. sources say a deal may be announced this week. toshiba is looking to raise cash after an accounting scandal cut profits over seven years. blues cochairs are soaring in sydney after it announced it is buying out its u.s. venture joint partner. steel makerlargest says it will buy the remaining g 50% of their venture. the company expects underlying earnings to grow about 40% next year. china's political elite are gathering in beijing to finalize their latest economic and social
blueprint, the 13th five-year plan. they meet with economic growth stuck below 7%. we saw policymakers stepping on the gas, cutting interest rates for a sixth time this year. we are joined by malcom scott in the studio. what was the smoking gun that prompted this latest move? >> it's the move down in growth. we had gdp coming in at 6.9% year on year. the slowest since 2009. deflationary pressures keep lingering, especially at the factory gate. 5.9%. down real borrowing costs in china are very elevated. angie: we have also seen big conversation for depositors. significance of the deposit rate ceiling going away mean? >> they've taken the opportunity
of this deflationary environment to do that. there's not such a huge scramble. it is a kind of safe environment. once the economy gets going again, it should mean that depositors are in demand. banks will be more competitive when they are chasing that money. -- it should get end the financial repression. angie: we did hear language from pboc saying, even though the deposit rate ceiling has gone away, still be very mindful about how you woo depositors to your banks. angie: they are -- >> they are trying to balance this need to have stability, stimulate the economy, and reform the economy. the leaders are gathering in beijing this week, putting together their big five-year plan, and that is expected to have some pro-environmental
measures. they need to keep this juggling act going. stimulate so the reform process can keep going. angie: what can we expect in terms of monetary policy this year? narrowscope for action each time there is another move. we've got the benchmark deposit rate lower than the cpi rate of 1.6%. timing-wise, it seems we've got this cycle of lowering interest rates every two months. there was a move just last week, then august, then june before that. whether there is time for another rate cut this year is the question. there's probably more move on the rrr rate. angie: and trying to do what they can to still meet their goal of 7%. malcom scott, thank you so much for joining us. that's malcom scott right here for us.
markets trading here in the asia-pacific. let's take a look right now. climbing above that 19,000 mark. we have, betty producers helping lead the way in australia. kospi in south korea is seeking 0.2% higher. sony is said to the in talks to buy toshiba's image sensor unit. sales are expected to grow more than 60% over the next three years. we've got bloomberg asia company news managing editor peter alstom joining us live from tokyo. what's the latest on this deal? peter: sony is in talks with toshiba to by its image sensor aboutss for ¥20 billion, $165 million. this is according to people familiar with the matter. the companies have not announced anything officially. toshiba did say this morning
that it is looking at a variety of options for its semiconductor business. what's so significant about this potential deal? >> peter: it's not a huge amount of money for these companies, but it is symbolic. it is significant strategically. sony's ceo is making progress in his turnaround. one of the reasons is this image sensor business that we refer to at the top of the show. these are the chips that go into smartphones and tablets to help people take pictures. now, people don't want just one camera in their mobile devices. two, in some cases more than that. big growth business for sony. as they are making additional investments, they are looking to buy toshiba's business to
increase their bet in these kinds of sensors. angie: what does it mean for toshiba then? toshiba is kind of point it in the opposite direction. toshiba is coming out of this accounting scandal. their accounting was inaccurate for almost seven years. they are trying to raise cash by selling off various assets and raise money to deal with the fallout of this accounting scandal. angie: all right, peter, thank you so much for joining us out of tokyo. shares in blue scope steel trading right now close to 19% higher after the australian steelmaker announced it expects underlying earnings to grow 40% next year. let's get over to paul allen in sydney for more. blue scope sales have been aggressively cutting costs. they've also made some other news this morning.
what is the impact? impact you cane see in the share price. it was up almost 20%. it is now closer to 10%. they are aggressively cutting costs. hoping to trim out 200 million worth, a lot of it from payroll. 60 million in labor cost savings. this deal has been sometime in the making. they are going to cut 500 jobs at their main plant. there's been cooperation from the state government as well. the workers have also taken a three-year wage freeze. the workers swallowed some horrible meals here. it means that not only has blue scope been able to lift its also that by 40%, but steel mill stays open, which is really a crucial employer.
how severely has the steel glut been affecting blue scope? aul: it is australia's largest steel mill. china produces 45 times that amount. there's a lot of steel on the market at the moment. 32% this has gone down year alone. the ceo says the price is the lowest since 2003. they really been fighting a battle here. this deal has really helped them tremendously. angie: thank you so much, paul. before i let you go, they are also on the acquisitions trail, right? paul: yes. aside from all the cost-cutting, they are spending money as well. 720 million to buy the other half of northstar, a steel mill
in the u.s. it was a joint venture. it is the most profitable steel mill in the u.s. it is close to its market as well. blue scope finding some time to strengthen their position. thank you so much, paul allen in sydney. checking on some other stories making headlines, melco said to the seeking a one-year waiver on the conditions for a bank loan. sources tell bloomberg they will send out a formal request next week. the casino operator has been giving 200 tables for its new project. the new resort opens in macau tomorrow. honda could increase its cooperation with general motors according to the ceo. the two companies work together on fuel cells and are in talks to expand cooperation beyond
that agreement. no decision has been made by either carmaker. honda aims to raise next year's target from this year's goal of 950,000 hicles. volkswagen's ceo will join angela merkel on her trip to china. mattias mueller will get merkel and update on the inquiry into emissions. mueller will also meet top executives in china as the company tries to limit the fallout. only 2000 vehicles were affected in china. beijing has launched an investigation into the issue. dismissalas won the of a $15 billion lawsuit over privacy. the plaintiffs have a chance to refile. facebook was accused of secretly tracking the internet activity of users without their consent after they logged off. the lawsuit was dismissed by the judge because he agreed that the
blair has said that the 2003 invasion of iraq was partially responsible for the emergence of islamic state in the middle east. in a television interview, the former prime minister also apologized for mistakes made in the postwar planning. blair insisted that toppling iraqi dictator saddam hussein had been the right thing to do. the leader of the maldives has appealed for calm after his deputy was arrested over an alleged assassination attempt.
the president said the decision was not easy. it follows last month's explosion, which is said to have been an assassination attempt. the vice president was detained on saturday and will be charged with treason. the woman once known as the napalm girl from the famous vietnam war photo has been receiving laser treatment for her scars in the u.s.. she is being treated at the miami dermatology and laser institute for star tissue on her left arm and back. the treatment is relieving the pain that she suffered for more than 40 years after she was caught in a napalm attack on her village by the south vietnamese military. the photo won a pulitzer prize. japan post is set to price its holding company ipo and we've got yuji nakamura following this for us in tokyo. what should we look out for today?
how does this play with the current market rebound? today, you get kind of the final piece of the puzzle ahead of the audio next week. today, we have the holding company that will announce its ipo price. the announcement expected after 3:00 p.m. tokyo time. the company said it would be in the range of 1100-¥1300. given the way the banking and insurance units were priced last week, the likelihood is that today, the holding company will also be priced at ¥1300, the top of the range. the pricing is kind of interesting, because initially, these ipo's, the rough prices were announced in the second week of september. since then, markets have rebounded a lot. the nikkei is up almost 10% since then. if they stick within those the market could
continue gaining this week ahead of the ipo next wednesday, as the market keeps going up, the prices are just that much lower, that much cheaper, that much more attractive. the thing to look for today maybe is, in case the holding company decides to announce that the ipo price is above that that would be a bit of a surprise. it shows them reacting to the rebound in markets. don't, nexty wednesday, november 4, when the ipo goes live, it means they will go live at a very attractive price and you could see big gains on the very first day. that's kind of what we're looking for today, to get all the final pieces of the puzzle before the ipo next wednesday on
november 4. angie: now that we all have prices, what is most attractive to investors, do you think? yuji: the banking unit is getting a lot of the attention. it is the biggest bank in terms of assets, in terms of branches. it could be another mega-bank, basically. mitsubishi, mizuho, those are the big banks when you think of japanese banks. this could be a fourth mega-bank. there's a lot of things that it could still do to improve itself after it privatizers. it doesn't lend any money in japan right now. it doesn't lend money overseas either. that is something it could step up. deposits are invested. angie: yuji nakamura, thank you so much for that. yuji nakamura live in tokyo. china's biggest reinsurer is set
to debut in hong kong today, in one of the biggest tests of investor appetite for new listings since june. let's get more from stephen lamb of bloomberg intelligence. how does china reinsurance stack up against its local and global peers? re isterms of size, china asia's largest reinsurer. compared to global peers, it is eight, with the first being companies like swiss re, munich re, or berkshire hathaway. angie: with this company, what is its focus? how can investors be assured that it's going to grow? definitely reinsurance accounts for about 70% of premiums, as well as net profits, so reinsurance is definitely the core of the
business. direct insurance is also one of the key areas for the company. on top of all that, you have changes in china taking place. what that means is, it's going to ask for more tools in terms of capital management as well as lease transfer. angie: what challenges are there for china reinsurance? >> one of the key challenges is definitely competition. competition, both domestic competition as well as foreigners coming into the market. foreigners have already been in the market for quite some time. angie: but they don't have a huge stake in it, right? they just have a small footprint. re has about 40% of the market share. the rest is split among the big names. going back to the valuation standpoint, it is priced in line with peers. one of the closest peers, p
angie: we've got breaking news for you right now. more headlines coming out from the pboc breaking on the bloomberg terminal wires, saying that the rate cut is partially due to a slower september cpi growth, and made it very much the point to distinguish that rate cut as being very different from quantitative easing. also saying that the rate and rrr cuts we've seen our regular measures. the sixth interest rate cut
since november of last year. pboc says, for all china watchers out there, these rate and rrr cuts won't expand its balance sheet, and also says there is more room for cuts if it is needed. welcome to the stock exchange. let's check on what our reporters are watching this morning with trading underway in asia. juliette: i'm watching a stock that's down 11%. angie: she retains the ground. shery: i don't want to play. that was my take as well. juliette: you've got to get in early. it manufacturers kids clothing. came through with a first-half operating loss at ¥150 million. as you can expect, big drop coming through today.
mitsubishi heavy, they are making a new regional jet, but it is delayed because of a steering issue. the stock has done fairly well. watch mitsubishi heavy. major player in japan. angie: 1, 2, and -- shery: aww. down 1.7%. they've cut their full-year target. their net income forecast down 14%. ens, manufacture p tablets, and other components for smartphones. they think their shipments will get hit, but apparently not so much their stock. angie: good for investors. that's the verdict from the stock exchange. our reporters' picks are based on news events.
"trending business" coming up next. what are you watching? rishaad: the explanation behind why they cut interest rates. as usual, it was a surprise. they are saying it may be on weaker cpi growth. angie: they also said, maybe more to come. there is more room if needed. rishaad: so they are giving us guidance. someone will be joining us with her wish list out of this plenum. the five things she would like to see. looking at china reinsurance, its debut taking place later on. pricing more at the top end of what analysts are looking at. we've got that coming through. controversy as well. he wanted to use legos to make an exhibition.
rishaad: it is monday, the 26th of october. if it's "trending business -- this is "trending business." ♪ we're going to be live in beijing, singapore this hour. asian share market starting higher after the interest rates were cut for the sixth time in a year. it is the 13th so-called five-year plan.