tv Trending Business Bloomberg October 25, 2015 9:00pm-11:01pm EDT
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.
shares of china beginning to trade in hong kong this hour. a $2 billion ipo. plus, toy story. chinese artist i went way accusing -- chinese artist ai ofwei accusing lego censorship. follow me on twitter. the china and hong kong markets coming online. certainly, the bowls really charging out of the gates this morning. >> possibly good news by the markets surprised cuts in the main interest rate by the people's bank of china friday. lifting markets across the asia-pacific. certainly singapore, taiwan, and malaysia come online, we will see if they fall into line.
the asia-pacific index rising at this hour. chinareally a bet on acting to cushion growth amidst a slide. investors see perhaps a buying opportunity. shares in australia up 4/10 of 1%. awell as earnings some and and a activity. we'll be watching all of that very closely. using oil prices moving and we are watching gold very closely and have anticipated action, or perhaps not this week. rishaad: thanks. right now, this rally can be partly attributed to the people's bank of china stepping in and putting their foot on the gas again, easing bank reserve requirements and cutting interest rates for the sixth time in a year.
it all caps at this gathering by chinese elites in beijing. the latest economic and social blueprint for the next five years. it is a gathering of 350 top communist party members behind closed doors to discuss the issues. no doubt that the lagging economy will be a key discussion. saying this morning, the decision was a traditional measure in very different from quantitative easing. the one-year lending rate has been cut to a record low. we have seen the deposit rate dropped to 1.5% from 1.75%. reserve requirements for all banks lowered by 50 basis points. the pboc also scrapping a deposit rate ceiling limiting
the rate that banks could pay savers. all of this to cushion the slowing economy and come back to inflationary pressures. we will see how china reacts at the bottom of the hour. chinese stocks rallied friday in the u.s.. china's bid to be included in the imf reserve currency market. they will be on the menu as officials start discussing their new five-year plan in beijing. the first time since china open the doors to the outside world in the late 70's that officials have had to deal with with sub7% growth. rishaad: thanks a lot for that. throughout the course of the
program, it is front and center as it comes to market action. twitter is your thoughts. the other a look at stories that should be making headlines. we are looking forward to the open of trading here in hong kong about half an hour as china's be -- china's biggest reinsurer is expected to make its debut. is expected toce raise around $2 billion, pricing at the top end of its range. it is offering 5.8 billion shares at 270 hong kong dollars each. this valuation is in line with other insurers. $2.70 implies one point three times -- 1.3 times value, which compares to global
insurers and closest competitor -- and its closest peers. both insurers focus more on property and -- which accounted for 67% of china reinsurance is first half of net premium. with this deal done, the value of the ipo will jump 28% for the year two $23 billion here in hong kong. over in japan, another ipo making headlines. japan post holdings expected to send its final ipo price today as part of that country's biggest share offering a nearly two decades. the operating ranges indicated between 1100 and 1300 yet. the government is selling shares in a $12 billion, three-pronged ipo.
banking and insurance units already priced ipos last week. almost 80% of the offering was aimed at individuals, which was tot of trimester abe's goal convince more japanese to invest in stocks. still, $12 billion would be less than 0.2% of the money households having cast -- have in cash. trading november 4 after 11% of each is sold. sony is set to be in talks to buy toshiba, the image sensor $160 million. they're expected to grow over the next three years. to grow on itsd dominant position in making the chips. sensors anding in
the components to drive earnings along with a higher profile businesses of making consumer-electronics, video games, and movies. raise cashseeking to after an accounting scandal cut $1.3 billion off profit reported overall seven years. the giant has been selling access to raise cash. they said the deal may be announced as early as this week. back to you. we are a look at blue scope shares. they have been performing strongly this morning. more,.t lots of news from blue scope this morning. they are also out there on the acquisition trail. are applyinghey for half of northstar that they did not own.
deal aboutying car -- they are buying cargills 'half. here at home, they are buying very aggressively. a lot of it is coming from the labor force. 16 million a year in cost savings there. the workforce that paul campbell are has been asked to swallow some bitter medicine. there will be a wage freeze for three years. the cumulative effect may include that steel mill which will remain open. good news for the workers there. good news for blue scope as well. inmeans they remain viable environment of falling steel prices. the market responding quite well. at one stage, blue scope was up 20%. rishaad: thanks a lot, paul
allen in sydney. why abu dhabi says the current price of earl -- price of oil is "a gift" to the world. start to aa head look at the major economic data out this week including a possible impending fed rate decision. right after the short break, we're looking at all things china, and of course that monetary policy move, the sixth interest-rate cut in a year. they could face some crucial policy decisions. ♪
to beginning a meeting today set the country's political and economic course for the next five years. the question is, what should be on the agenda. catherine, a huge surprise. >> it wasn't too much of a surprise. we were factoring in another cut. what is very promising is the removal of the ceiling with the deposit rate. the full entry -- the fourth --erest rate equal is it interest rate liberalization. it is leading to their ultimate plan of opening up capital markets, etc.. in terms of expectations going forward, we're going to probably remain in this environment. mindful that the window of opportunity is getting smaller. a nice little gift to
the people there before things get going. things we are looking for, some communication around gdp growth. rishaad: it is your wish list? five things. >> munication around gdp. -- communication around gdp. growth, everyone knows is slowing. but again, it is quality of growth versus quantity of growth. corporate has very much factored in the macro challenges. second on the wish list would be urbanization and policies around that. whether it is fun -- whether it is environmental, one child kind of feeds into beautiful china. enterprise reforms. we have seen somewhat of a delay there. in terms of making it a lot more efficient.
superpower, they do need to become a lot more creative. finally, one of my favorite , a recreation of the silk road route. -- fully rishaad: exactly what road and what felt is going to be one of the things. that shinzosting abe is ahead of this. catherine: firstly, it is china's answer to the traces of a partnership. jinping in thexi , premier li going to south
america. basically allowing china to be a service center for everyone. rishaad: we have had this announced before. i guess you have to take all the vested interests. catherine: you are seeing some interesting companies who have implemented better efficiency. sopt of attractively priced -- attracted priced soe's. includesoe reform cutting of jobs. rishaad: they really want to cut jobs? these are really bloated companies at the end of the day.
catherine: hence why we are seeing job increases in the services sector. every policy is about social stability in china. we are talking about 1.3 billion people. are very mindful of any policy they do implement. rishaad: you number one was communication surrounding gdp. catherine: it is also about foreign perception of china. for them to be more community can -- to be more communicative about it. to give some indication of what they are going to do. the pboc is very different. just shifting more towards better communication, i think that could be very positive or sentiments. over the weekend, some noises coming out of the i and that -- out of the imf.
catherine: this is going to be very symbolic and significant chinese andand the loops all the way back into the opening of china. have a great week. latest from eu and balkans nations, they have agreed on a 17 point action plan to conquer the migrants crisis. it is the fifth of this year on europe's biggest refugee influx since world war ii. the eu says greece will increase its capacity to 30,000 places by year-end while financial support will boost the ability to process arrivals. voterslls they polished have delivered an unprecedented majority to the conservative law and justice party in sunday's national election.
the new prime minister promising a $90 billion central bank loan program and a tougher line on migrants. poland's economy has been eu's fastest-growing, but 20% of workers still live in poverty. woman from a famous vietnam war photo has been receiving laser treatment for stars in the u.s.. she is being treated at the laser institute for star tissue that runs along her left arm and down her back. the treatment is relieving the pain just suffered for more than 40 years after she was caught in a napalm attack on her village by the south vietnamese military. absolutely iconic and tragic image there. up next, the embattled prime minister of malaysia proposes subsidies in his latest budget. it draws new criticism from the opposition. ♪
250 tables for his new $3.2 billion studio city project. it is below the 400 they were hoping for at the opening in macau tomorrow. honda could increase its cooperation with general motors. this is coming from the chief executive. the two companies working together on fuel sales. he says no decision has been made. he aims to raise next year's china sales target. volkswagen's chief executive will join german chancellor angela merkel on her chip to china. according to sources, that's i.s. moeller will give -- according to sources, boomer -- will meet with executives in china. while all the 2000 vehicles were effective in china, beijing has
launched an investigation into the issue. the l.a. clippers owner and former microsoft ceo took a 4% twitter state earlier this month. he says he bought in before a new jack dorsey would return as the permanent ceo, something he sees is a good move for the company. facebook has won the dismissal of a $15 million lawsuit over privacy, but the plaintiffs will have a chance to refile in a revised suit. facebook was accused of secretly tracking internet activity of their users without their consent. the lawsuit was dismissed by the really three years after hearing arguments in the case because he agreed that the plaintiffs didn't specify how they were harmed by being tracked. oil described as a
"gift to the world." : this a win-win situation for both consumers and producers. that has the iea expects demand growth to group -- demand growth to rise to a five-year high. malaysia's prime minister starting to win back supporters. he struggled with an economic slowdown and a funding scandal. populist budget sprinkled with handouts and subsidies but he missed an opportunity for broader reform. kl bureau chief joins us. more subsidies for farmers, higher taxes. is he trying to play robin hood? grexit depends on the you ask. -- >> independence on who you ask.
that itrnment is saying is a people centered budget and the tax increases will only andct about 17,000 people bring in revenue of less than $100 million. there are subsidy cuts as well. they are removing subsidies for electricity bills as well as for so.ing oil, it really depends on who you ask. rishaad: we will be right with you after the break. we'll also be seeing how the markets are opening in china. of course, shanghai coming on stream as well. ♪
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we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. rishaad: we're just about to head over to the open here in hong kong. also coming on board, we have had after an hour of trading in singapore, taipei, and kl. investors getting a first chance to react to friday's dual rate cuts by the bank of china. china reinsurance, the ipo taking place. it was priced at the top end of estimates. 2.7%, it is that hong kong
$2.70. what does this trading they really have in store? what does this week have in store? the people's bank of china cutting rates on friday. of course, the big wigs are meeting in beijing as well. will they deliver? we're in anticipation. we are also in anticipation of this market opened in hong kong. >> we start the day with a nice gain. 25 basis point interest rate cut. as you see, markets across the asia-pacific, a case of that news perhaps being treated as good news. that is because they see china pushing the market despite the continued slowdown in the market. let's get the first indication of how the markets are reacting. hang seng up 1.17%.
you are seeing the shanghai composite advancing 1% as well. that is will we are seeing generally in other markets across the region. continuing its performance up 1.25%. today, the debut of china's reinsurance. a competitive space there. 2.6%, $2.77, it was in the premarket. nice again. ipo to $2.70. china reinsurance dominant nationally in china. that is what investors are watching. this ipl is what we will be well -- will be following throughout
the day. rishaad: going to get to that trading day. how does this stack up? zeb was just pointing out that there is competition from international and local peers? >> it is actually priced in line with the peers. in terms of the size of the business, is definitely asia's largest, china's largest, and also the eighth largest in the world. what is interesting is that they are clearly focusing domestic markets but trying to branch out. focus,: what is the where kevin grow? -- where can and grow? steven: the american markets
might not be on the radar at the moment because they have 20 of stuff to play around with on their plate in china. it is going to drive a lot of growth in terms of capital management. rishaad: what challenges does the company face? >> the rising competition, and picc, also being there this client. -- being there biggest client. thank you very much. staying with china, looking at that dramatic move, once again, sixth interest-rate cut within a year. it was a surprise, wasn't it. i guess we saw this coming but we don't know when.
>> i think for the pboc there are a couple of issues that dictated the timing. firstly, concerns about very low inflation. cpi is low, producer license -- whose -- producer prices. says that all of these things are having a negative impact. that is hitting demand for credit, hitting investment. the reserve requirement ratio, capital outflows. they moved to devalue the yuan back in august and really opened the door to significant capital
outflows. in saw a record outflows september. that is a big drain on liquidity. the central bank is replenishing that lost liquidity and keeping the financial system flush with funds. rishaad: how does this change the growth outlook? there is a lot of negative still for china's growth. exports are shrinking, real estate construction, new real estate construction continues to shrink. there's certainly a lot of reason for caution. usre is one fact that gives reason for confidence that growth starts stabilizing in the month ahead. at bank loans, and particularly if you look at bank loans factoring in all the money
which local governments are now borrowing, what we see is a stabilization and a moderate re-acceleration over the course of the last few months, and our expectation is that credit growth stabilizes in the fourth quarter and the beginning of 2016, will start seeing some of that bleeding through. rishaad: formulating, let's talk about the yuan a little bit. further pressure for it to weaken. will they let that happen? i think the current situation for the yuan is really not desirable or sustainable for china's policymakers. on the one hand, exports are shrinking. clearly, the yuan is creating a big competitiveness problem. they can't sell their goods
overseas. on the other hand, you have the pboc spending vast amounts, intervening in the forward market had considerable costs to stabilize the currency. that pattern of spending to stabilize the currency which is too strong for exports is not going to hold in the medium-term. rishaad: thanks for that. let's see what the reaction has been on social media to that story. shery ahn: the rate cuts and the cuts are causing reaction on social media today. there are voices of concern about this -- about what this means. one person calling up a lack of transparency. we all know when the fed is going to have a meeting but the pboc always surprises us. another person asks whether this
move will boost the stock market in the short-term or maybe just for monday? they are worried that this reflects china's economy. he says stocks will rally on monday for sure. mark is just getting underway, we'll see how they do for the rest of the day. another said that the pboc cutting rates -- generally online, the topic has been whether or not this rate cut clearly reflects the state of the chinese economy. rishaad: getting back to the malaysian prime minister as he struggles with an economic slowdown. sprinkling the budget with handouts and subsidies, critics say they miss an opportunity for broader reform. we can get back to our kuala lumpur bureau chief.
let's talk a little bit about what analysts are making of the fiscal deficit, which is targeted to come down marginally. >> the fiscal deficit is expected to come down to 3.1% expecting ad then deficit of around 3%. they were hoping the government would make a bigger dent for 2016. malaysia needs to make more subsidy cuts if they are serious about meeting their commitments of balance by 2020. rishaad: have businesses been responsive to the budget, what have they been saying and what they like and what was their biggest concern? >> i think they have responded mostly positively to the budget. concern is that he
had proposed the minimum from malaysia being freeze. businesses aren't really happy about that. they are saying they are already facing many other rising costs and they are hoping for it to be deferred until the economy stabilizes a bit more. rishaad: thanks, joining us from kuala lumpur, which looks like it has been affected by that hayes from indonesia once again. first state visit to the united states and due to meet president obama later on. neil, what well he talked to obama about? -- what will he talk to obama about? and investment ties after the u.s. just concluded tpp talks.
i'm sure they would like indonesia to join that. indonesia is not a part of the tpp. it is possible that indonesia will join in the future. it is also -- it is also possible -- indonesia has a power shortage and they will possibly be looking for renewable energy investments. for many years, the u.s. wasn't allowed to train indonesian troops and there was an arms embargo. somewill look to do military hardware deals. also, probably the environment is going to come up. indonesia has been producing more greenhouse gas omissions in the past few weeks than the whole of the u.s., so that may be a cause for concern for obama. is also meeting
american companies there. there is a big need for infrastructure. any investment deals expected? there are some agreements expected. he will meet the indonesian chamber. it is possible and will get something in renewable energy. there is a lot of need for more power here. not really clear that there will be any huge investment deals in manufacturing. still, lots of concerns. corruption. these are all things for u.s. companies. i think still, they will be expecting -- still waiting to see what to go a -- what he can achieve. much,d: thank you very our bloomberg bureau news chief
juliette: the leader of the maldives has appeared -- has appealed for calm after his deputy was arrested over and alleging assassination attempt. he says the decision to make the arrest was not easy but was taken for the security of the country. it follows last month explosion. the vice president was detained on saturday and will be charged with treason. tony blair has said that the 2003 invasion of iraq was partly
responsible for the emergence of the islamic state in the middle east. interview, the former british prime minister also apologized again for mistakes made in the postwar planning. blair insisted that toppling iraqi dictator saddam hussein had to be the right thing to do. korean families from both sides of the peninsula and that loved ones in the latest round of an officially sanctioned reunion. they traveled to the mountain resort for the meeting. almost 30 of them were aged in their 90's. south korea sent five warning shots on saturday toward a north korean patrol boat that across that the fact of maritime border. rishaad: let's get a heads up on some of the things we're watching out for the course of this week. let's start off with the plenary
this week. what is on your wish list for what they come up with? i think it is important to remember that china is very much in the process of not only trying to support the transition of this economy more towards services and are sharing and tiary, value -- and ter and higher value added, but it is using different instruments and trying to target more targets and trying to do that. i think most analysts are looking for a clearer vision and a medium-term anchor about where china is expected to be over the next 3-5 years. how that transitions to a more services based and value-added economy is likely to occur, and the state's -- the state owned
enterprises sector is actually going to play in that. i think this plenary, more than any other, given the traditions in the chinese economy and the lack of overpaid lists -- the will beopaqueness signaling mechanisms to show to the market and the global economy that the transitions are being managed well and are ongoing. get the next weekend we pmi, which are very much looked at. should we be looking at the manufacturing pmi as much as we used to when services are huge in china now as well? think,absolutely, and i when we look at the chinese economy, we can clearly see that
china is splitting into three separate economies. you have your old china, the heavy industry, the manufacturing company infrastructure. was so supportive of commodity prices and has slowed significantly. it is probably going around 3% or 4%. you have an area which is aligned with property and residential which is probably still growing around 6% to 7%. provinces,astal particularly around beijing and shanghai, you will see quite strong levels of growth, particularly aligned with services. services are becoming increasingly important. i think this is one of the reasons why there is a lack of visibility in the chinese economy. people are still focusing on these old measures such as industrial production.
one, we probably don't have the quality or the quantity at this stage, but my intuitive feel would be that the services sector is probably running a little bit firmer. given that services is probably a larger component of the economy, that will come to be an important stabilizer going forward. rishaad: i want to move to japan now. on friday, we have the bank of japan. a lot of people say they think they might add some more stimulus here, but they haven't actually made noises in that direction. haven't, andey when i -- and i think when we look at the ecb and the bank of japan, with qualitative and quantitative easing there is diminishing returns.
the need to be sort of a big bang announcement to get the incremental change in sentiments and expectation that is required. the bojthe fact that has been quiet on this, the fact that commodity prices are perhaps still declining and there is some deflationary pressure with japan, i think they will probably be waiting until we see clearer signs of the bottom of deflation that they will go in for a large announcement on qualitative and quantitative easing. they will probably try to time that with the bottom in the inflation cycle. for a central bank that has identified a clear inflation target, it wouldn't be the appropriate policy response, i don't think, to try and catch a falling knife. i think they're waiting for
political dissidents figures in australia. the toymaker said they couldn't provide them because they didn't want to directly sell to someone who will make a political statement. that video back there is what he actually did use the san francisco. his other comments coming out of china. "i don't quite want to see lego being pulled into the political zone. our kids in the country may be banned from playing lego pimco -- playing lego." juliette: he has 293,000 twitter followers, just shy of lego's 300,000. he is saying it is an act of discrimination. a lot of people supporting income through, saying they're
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(don't fear my darling...) (the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store. rishaad: it is monday the 26th of october. this is "trending business. co" kiev green asian sharemarket cut interest rates for the sixth time in a year. china is trying to formalize the next economic blueprint, the 13th five-year plan. china reassurance making gains on its trading debut after a $2
billion ipo. it is facing competition on the mainland. plus, toy story, a chinese artist at lego census it for refusing to sell in bulk order on political grounds. reaction from social media. let us know what you think of today's top stories by using social media. czech koruna about open shortly for the monday session. seeing gains across this part of the world. , where the screens are green. david: we ended the week like that. we continue on this further stimulus out of china, and that surprise interest rate, fueling the markets. we are seeing market off their highs. hong kong and shanghai were higher about 1%.
looks like malaysia though, declining a quarter of 1%. trying to squeeze more tax money out of richer citizens. today, nikkei 225 rallying 1%. nice move in terms of corporate earnings. panasonic, first-half operating profit doing well. 7%.es are up about also watching hitachi. possible $165 million deal for toshiba in managed -- image sensor units. of course we are closely following the currency market given what is going on in china and it is the chinese yuan likely to see pressure as a result of interest rate moves.
investors watching very closely. we know the chinese government acted, the pboc took this decision because they need to put forth the economy. they also want to block against capital outflows given the depreciation in the currency. that is what we need to watch. at its where the yuan is 6.355. bank reserve requirements cutting the interest rates for the first -- six time in the year. juliet is looking at the most finer points. all coming out of the gathering by china's elite. the fifth in, china's capital. a gathering of 300 50 top communist party members behind closed doors. they are going to discuss the issues facing the stage. no doubt the leading economy will be a key discussion point
after the pboc delivered the sixth interest rate cut since it is a, saying traditional monetary measure and very different from consultative easing -- quantitative easing. we have seen the one year record cut. the one-year deposit rate dropping to 1.5% from 1.75 percent. reserve requirements for all banks lowered by 50 basis points with an extra 50 basis point reduction. institutions in the pboc also the deposit rate ceiling. this is all in effort by authorities to cushion the slowing chinese economy in combat deflation rate pressures. fixave seen the desire to asian markets, u.s. trade and chinese stocks rallying. we are seeing a good pickup on china's equities this morning. meanwhile, lower growth target structure reform need to be included in the reserve currency
basket. that will be on the menu as officials start discussing the new five-year plan in beijing. it is the first time since china opened its doors to the outside world in the late 70's that officials have had to deal with sub 7% economic growth, and issued the first president -- five-year plan. more than 90% of the indicators, including that statement percent economic growth have been met. rishaad: let's look at some of these other stories making headlines. looking at this trading debut right here in hong kong. biggest hashina's made its debut. sarah's of china reassurance jumped 2% at the open. as the biggest test of investor interest since china's stock rout in june, china raised around $2 billion with this ipo,
pricing at the top end of its range. it was offering 5.8 billion shares at 270 hong kong dollars each. analysts say this valuation was in line with other global insurers. 2.70 hong kong dollars -- that compares the global insurers like iag. the re-insurer is expected to trade similar to pic's evaluation. both insurers focus more on pop me and -- property and casualty lines. with the field done, the value of ipos will jump 28% for the year to 23 billion dollars here in hong kong. over in japan, another ipo.
japan post holdings is expected to set a final ipo price today, as part of the country's biggest share offering in nearly two decades. the offering range is between 1100 and ¥1300. the government is selling shares in a $12 billion, three-pronged ipo. chance insurance and banking units already purchased. reflecting strong demand from retail investors. almost 80% of the offering was individuals. that was part of prime minister abbe's goal to convince more japanese to invest in stocks. still, $12 billion would be less than 0.2% of the money households in japan have in cash, or at the bank as savings. up of theis made parents, banking unit, and insurer and will begin training on -- trading november 4. largestaustralia, its
dealmaker has announced it expects underlying earnings to grow by about 40% in the first half of next year. the company says this boost comes from early delivering cost reductions, growth in domestic demand, not to mention help from . savings of $144 million are being targeted through june 2017. they have also agreed to buy the remaining 50% of the joint worth $720the u.s., million. this gives the producer full ownership of north america's most profitable mills. the deal to acquire north star that produces 2 million tons of cash flowl will boost and earnings. still, the company says it will continue to make steel in australia, maintaining an almost century long history of
steelmaking. back to you. rishaad: we're having a look at sony, to be in talks about toshiba's image sensor is this for $165uch -- million. grace joins us from tokyo with a look at what the latest is behind this deal. grace: hello. actually, this deal is a win-win for both companies. the market reaction is that both companies are rising several percent this morning. the rationale behind is that toshiba is after the accounting scandal and it needs to do restructuring. the highests moneymaking division of the electronics business is image sensing. sony has 40% of global shares. the imaging sensor is smartphone
cameras, like iphones. there is a large demand in the market for sony. sony is doing additional investments into the imaging sensors, like it already announced it will boost 87,000 by next year. the analysts are boost byg that it will 30%. sony could be extending the leading role further in this field. so far, it is things like -- one more background behind the deal is that sony and toshiba used to do that -- develop imaging sensor together in the 2000's. this means sony may need to do
what do we get out of this, which is going to be in some way interest rates or foreign exchange rate sensitive? guest: i think their preparation for the next five-year plan. i think the reason the chinese cut interest rates last week was to respond to these macro and -- macroeconomic forces. the economy is slowing down. inflation is easing. 10 is one of the few countries that so has access to traditional policy tools. the few is one of countries that has access to traditional policy tools. many people are looking at the bank of japan later this week to do more qe as well. rishaad: not a done deal by any stretch of the imagination. what about the yuan? the possibility of special rights, imf might get than that. on top of that, we had to move
to really reject the way the country's currency is valued. everyone thought it would be a massive move down but it wasn't. is the one something to jermaine? guest: i just came back from tokyo. fromw the dollar go back $1.80 to over 120. the dollar has gone up 50%. japanese exports, nothing. in chinatwo or 3% move and people think it will help exports but it won't. the reason china made its move has to do with them trying to meet operational requirements to join the special rate of the basket currency. china wants to join this. chinese officials feel they have been mistreated by foreign countries. they have not given china the respect it deserves. it would be a vote of confidence in how far they have come. rishaad: what does this mean then, looking at the dollar? doj, --talked about
boj, ecb. is it all positive? guest: i don't know about all dollar positive. a lot of the dollar bulls have given up in the futures market here it we have that smallest yen -- net short. same with the euro. people have gotten out of the positions at this moment in time when divergences reasserting itself. december the in federal reserve could raise interest rates and other banks are going the opposite direction. rishaad: what about the u.k.? guest: by and large, ecb is easing and will ease more. boj is easing very aggressively. they are already eating aggressively. china cutting interest rates. together, the third significant dollar rally we have had since the end of the woods. i remember it went to
parity in sterling. guest: just shy. then we had the clinton dollar rally. that is when the euro fell to a low. now we have the obama dollar rally. it will be eventually as big as the clinton dollar rally. yuan down.he rishaad: people talk about parity something not to be considered. guest: we don't have parity forecast for this year. we have it coming into play late next year. a gradual process. a lot of conflicting forces, as the as the u.s. still has debt ceiling issue pending. we have a lot of other things here and an election next year, a lot of uncertainty. as the dollar gets stronger, the trade deficit gets bigger. in the big picture, dollar yen going to 130 or so. a new trading range next year,
the euro heading to parity and then later back to the old lows. rishaad: what about the yuan? chinese think that the currency hedges down a little bit, but not massively. the officialsuch, want to let it devalue, i suppose? guest: china is in an elevator efficient going from expert -- export led to investments. now they are trying to be more consumption oriented. a weak currency hinders that effort. rishaad: what about how it will be taking interns of the u.s., stronger dollar. larry summers used to go on about it. what a strong dollar means, especially in asia, the key take away is not the level that it trades that. it is an implicit promise by the u.s. treasury not to use the dollar as a trade weapon. china forced japan to make concessions back in the 80's, trying to make germany to make concessions. since the treasury was taken
over in 95, the u.s. has had a strong dollar policy. they issued a promise that they won't use the dollar to try to win trade concessions. rishaad: you're saying they would never use the dollar as -- they would never manipulate the dollar? guest: i would say they would bentsen, as heyd said to japan, if you don't open up the market, we won't let the dollar fall. those days have not resumed. the effort on the tpp has another sign that even though we have tough economic currency, the u.s. still sees as a whole free-trade to be the direction. rishaad: great have you on the program. thank you. mark chandler. juliette: now to the stories making headlines. the latest nations have agreed on what they are calling a 17 point action plan to tackle the migrant crisis. it comes out of an emergency summit called by german
chancellor angela merkel on europe's biggest refugee influx since world war ii. the eu says they will increase the reception capacity increase by 30,000 places and financial risk part will boost the ability to protest -- process. exit polls say polish voters had delivered an unprecedented parliamentary majority to the conservative law and justice party in sunday's election. he is poised to become a new prime minister imposing a $90 billion program, increased spending on child support and a tougher line on migrants. poland's economy has been the fastest-growing, but 20% of workers still live in poverty. the woman once known as the napalm girl from the vietnam war photo has been receiving laser treatment for her scars in the u.s. fors being treated in miami scar tissue that runs along her left arm and down most of her
australia is playing archrivals new zealand in the rugby world cup rivals. the all blacks are planning to defend their world title. they had a grinding two-point victory over a determined south africa. sunday's game, the rivals proved too good for argentina and they had a 29-15 win. the wallabies scoring four tries, starting with a rob simmons interception. thequickest five points of tournament, the south americans recovered to keep up the pressure, but a hat trick by cooper was enough to ensure australia reached the fourth world cup final. the winner will become the first side to claim a three world
title. let's have a look at what's going on when it comes to social media. shery ahn: we are looking at toys this morning. legos to be specific. but not because of any fun topic, but something more controversial. juliette: everything is not awesome. shery ahn: yes, everything is not awesome. china artist and political activist ai wei wei wanted ofos to note figures political dissidents. legos said they do not want to provide breaks for any political statement. you can see already, he is using bricks.go this was in san francisco. legos maintains they have never sold directly to the artist. thosere being denied now, bricks, for his exhibition in australia. some people are reacting to
that. chinese people are saying, i don't really want to see them being pulled into the political issue here, because all of our kids in china may be banned from playing legos. he says china is china. another prison saying, lego will not be heard because don't forget, they are going high and in china. who cares about with the general people think? a lot of people thinking lego will not back down. juliette: i will tell you but -- what the general people thinks and what i huawei things. he thinks it's ridiculous and discrimination. he has 293,000 twitter legosers, just shy of 300,000. this is his twitter account. he says, lego will tell us what to do or not to do, that is awesome. the play on the theme song from the "lego movie." hundreds of people are offering to donate their legos to ai weiwei.
tweeting lego directly now, he has been inundated. everyone is saying they need to get legos. right now, free the legos #. it certainly seems like he will be ok. gety ahn: he still could them, is just that they're not directly sold. to you. rishaad: thank you. next, cashed up. people's bank of china adding more stimulus. how will it affect the five-year plan being discussed this week by officials? "trending business," is back after this. ♪
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rishaad: a look at our top stories. gathering in are beijing this week. the central bank scrapped the ceiling on deposit rates, battling the riskiest part of freeing up interest rates. after cutting the benchmark rate, the pboc says it still has room for further easing. a $2 billion ipo, the biggest
appetite for new listings. sony is said to be in talks about toshiba's image sensor division. sources say a deal may be announced as early as this week. it is just about time for the japanese trading halt takes place for an hour for lunch. it is trading as normal in hong kong. what are investors doing with their money? counterintuitive given the fact that china cut rates to support the economy, suggesting the slow down is deeper than we know. investors see it as a sign that china will do what it takes.
let's take a look at what is happening. the only market declining at the moment is malaysia. other markets across the region fervently -- firmly digesting the news. we should look ahead to the federal reserve and the bank of japan's decision on wednesday. currencies moving today, stocks rising. the australian dollar moving as well and we are tracking other risk currencies as well. the hang seng and the shanghai composite off the highs of the day. they started the day at about 1% higher. this is something we need to watch. insurers doing well today. the debut of that stock, and a solid debut, more than 2% gain
at the open. has paired back to three quarters of 1%. 4%.no shares up nearly property developers on this move by the people's bank of china. gathered in beijing. i will send it back to you. a busy time in beijing. the 13th five-year plan meeting with economic group. policymakers stepping in and putting their foot on the gas again. interest rate cut for the sixth time in a year. what was the smoking gun that prompted the latest move?
thing -- ifhe one you had to single out one reason, disinflation. worse.: it is getting >> 5.9% negative in september. darling costs for factoring's -- borrowing costs for factories. double-digit borrowing costs at a time of slowing demand. not good. rishaad: how does the stimulus fit into the policies of the chinese government? >> it is a balancing act. they need growth so they can go ahead with some of these reforms. some of these reforms will hurt growth. reforms. necessary some of the financial liberalization's out to the risk of the economy. there are plenty more
bullets in the gun? >> there is still room at the benchmark level. the deposit rate is below the cpi rate, 1.5% below the 1.6% cpi rate. on the lending rate, still plenty of room. elevated, bank still theyto lock away about -- can free that up and put more money into the economy. rishaad: thank you for that. we have china reinsurance coming to the market today. japan post said to price its holding companies. ipo is which part of the being valued and now that relates to last week's pricing
of the insurance divisions. it seems a bit muddied. we have seen a lot of announcements about this ipo. you have the holding company, which will be announced later today. and then you have the banking and insurance units. a lot of different announcements. the thing to keep in mind, the holding company owns both the banking and the insurance units completely and holds the post office unit. the banking unit and the insurance unit last week were topped -- priced at the top of the ranges. we expect the holding company will also be announced at the top of the range. it is a lot of different numbers to keep track of for investors. next wednesday, november 4, the government has priced them at a very attractive level.
to, i thinktalked most everybody expects a pretty the firston shares on day. the government really wants it to be a successful ipo and has priced it attractively. they announced the holding company, you can expect it at 3:00 p.m.. everybody is expecting it to come in at about ¥1400 per share. if it does, it reinforces the view that even though it is at the top of the range, it is still very attractive and we would expect pretty big gains come next wednesday. rishaad: this is hugely significant and people looking at this very closely. what are you looking at in particular? pricedok at where they it.
it will be a pretty big surprise if it is far away from ¥1400. it is such a big ipo. we will be talking about it for the next week at least and probably after that. although the attention is on how it will trade after it opens. investors need to keep in mind that as a whole, the company's profits are declining. the operating profit will fall by about a quarter. a lot of interesting things. it will be the last thing -- the government is only selling 11% of its holdings. in this privatization. they have a long way to go. sure thato be investors want to keep buying this after the initial ipo into the next several years.
it is really just the first stage in the privatization. given the huge size, the market value will be about a billion dollars. it will be one of the biggest companies in japan. a lot of attention on the ipo as well as after the ipo. today, we get the final piece of the puzzle. rishaad: you mentioned the puzzle, but among the three listings, which is the one getting the most attention? >> the banking unit by far. it is the biggest bank in japan by the number of branches, assets. now,ay it is priced right in terms of book value, it is far below the other megabanks. 0.5 book value. the other guys are 0.7.
it is still attractively priced and people expect that $1.6 trillion of assets, they can do a lot more things. they can do a lot more things once they are privatized, go overseas, for example. rishaad: thank you very much. let's check on some of the other stories. seeking a one-year waiver on the financial conditions through $1.4 billion bank loans. it will send out a formal request next week. have been given 250 tables. it is below the 400 they had been hoping for. they have a new resort opening in macau tomorrow.
the two companies work together on fuel sales, expand cooperation. raise the china sales target. volkswagen chief executive will be joining angela merkel on her trip to china. he will give her an update on the inquiry. -- the company tries to limit the fallout from the pollution scandal. beijing has launched an investigation into the issue. blue scope shares, they had a good day. the australian steelmaker announced the cost cutting drive
would propel earnings in the first half of next year. a lot of news coming out of bluescope. the acquisitions as well. >> that is right. they are buying half of northstar they do not own. it is the most profitable steel mill in the united states. the buying -- they are buying that for 720 million. here in australia, it is a different story. they have been shutting staff, -- shedding staff, 500 of them or so. they struggled to keep australia's largest steelworks up and running. it is a couple of hours drive from us here in sydney. they reach the deal with the union and the state government to strip out labor costs and keep the plant open.
very good news for the workers and they get to keep their jobs. it is good news for shareholders. they have put out the update that underlying -- will be up 40% in the first half of next year. responding very well this morning. it was up almost 20% at one point, but it seems to have found the level of 11.5%. rishaad: thank you very much. ♪
appealed for calm after his deputy was arrested over an alleged assassination attempt. the decision to make the arrest was not easy, but was taken for the security of the country. vice president was detained on saturday and will be charged with treason. tony blair has said the 2003 invasion of iraq was partly responsible for the emergence of the islamic state in the middle east. he also apologized again for mistakes made in postwar planning. he insisted toppling saddam hussein had been the right thing to do. korean families from both sides of been invited -- have met loved ones in the latest round of officially sanctioned reunions. 250 south koreans traveled to the resort for the emotional
meeting. more of 30 of them were aged in their 90's. south korea said it fired warning shots on saturday toward the north korean patrol boat. the malaysian prime minister trying to win back supporters as these troubles with an economic slowdown and a funding scandal. critics say he missed an opportunity for broader economic reform. our kuala lumpur bureau chief joins us. what are people telling you about this? they did targeted to come down. people are giving this a name, the robin hood budget. the opposition saying it is an
austere budget, cut through education to fund subsidies. there are initiatives the prime minister is introducing. it looks like it may be more popular than some more expecting. they are expecting the deficit to come down to about 3%. >> have businesses been responsive to the budget? >> they have been relatively positive on the budget. they brought initiatives like reinvestment -- they were quite happy with that when those incentives were extended. the minimum wage in the region will be increased and they are saying this full add to the
costs -- this will add to the rising costs in a time when you economy is not doing well. looking at -- looking behind you, we have that haz looking about the same as it dide last week. from the indonesian fires. >> they are not getting better. we have some good days and some bad days. the district has some unhealthy levels yesterday. it remains to be seen on how the wind direction is. rishaad: joining us from kuala lumpur. let's take a look at what investors are going to be keeping their eye on this week in the u.s. here is su keenan. the week ahead on wall street will continue to focus on
we big string of earnings as approach the peak of the reporting season. apple, exxon, and twitter will be among the 160 s&p companies set to report. those surveyed by bloomberg are projecting the u.s. economy or gdp grew at less than half the pace of the second quarter. orders for durable goods falling for a second month. the homebuilding front, sales of new u.s. homes probably at a seven-year high. a steadily improving labor market. we will get the latest on consumer confidence. this is the company that was in the crosshairs of a big battle in the past week. the stock was up and down. it is trying to defend against allegations that -- about
placement has been used in the films. >> james bond and product placement have gone hand-in-hand since the films were first produced. to the days of pierce brosnan, 20 brand partners on board. daniel craig and his interpretation, they paired that down with seven brand partners. movies, very obvious placements. character says to james bond on the train --
maybe they have gone a bit too far. her reaction is where the audience went -- maybe that is a product placement does not work. >> i'm your best chance of staying alive. --there has been a lot of the website has been going crazy about what james bond is wearing. belvedere, a limited edition bottle where they change the 5ogo to make it the mi offices. wherever bond goes, he personifies their brand. that is why you have the likes gillette, tom ford, premium brands. >> excellent choice, mr. bond.
news week's releases failed to overtake "the martian." returning to the top spot for a third time this month. "goosebumps" a close second. a big day on the markets. there we go. the hang seng up, just off the highs of the day. shanghai composite, .5% to the upside. japan has been on its lunch break just over 20 minutes now.
angie: it is the middle of the asian trading day. not much celebrating going on on this gloomy day. for the markets, it is a whole different story. we are live in hong kong, this is "asia edge." the top stories this hour, stimulating stocks. asian share markets rise after china cuts interest rates and bank reserves. easing comes is china's political elite could
start their next economic blueprint. the 13th five-year plan. please, mr. post man. japan post said to name its final share price. rishaad: it will be the biggest since the late 1980's. we will take a look at jakarta and see what the indonesian president has on his to-do list. the reaction, we look at the new downward pressure on the yuan. that report and loads more on this monday edition of "asia edge." >> chinese stocks are trading at a two-year high. can you believe the hang seng enterprises index, justut