tv First Up With Angie Lau Bloomberg November 26, 2015 6:00pm-8:01pm EST
let's check in on markets in asia this morning. u.s.ose of you in the wrapup your thanksgiving meal. equities up .1%. seeie dollar continues to weakness after australian capex fell by the most on record. to new zealand we go. this is the view from there. spotew zealand dollar weakening at 65 u.s. cents. let's head over to japan. this is the view yesterday on light volume ahead of that thanksgiving holiday. and we're in thick of that. nikkei futures pointed to a higher open. dollar-yen is slightly weaker. but we begin today with an unexpected rally for commodities as metals surged on speculation
china may step up its support. jumping commodities led to gains around the world. so, is at a rally with legs? is here now with what china's possible intervention and how this can impact the markets today? >> we understand domestic players will be meeting today amid this record slump we have seen. &ee biggest drop in the l metals index. we saw metals rising from europe to canada. we saw copper up as much as 4% on speculation that china will step in to boost these domestic players. this has a global impact given we have had such a global rout in commodities prices. this comes as nickel producers will meet copper producers looking ahead to next year. now, the analyst to track this s&p angel in london says
recovery at sea next year in the market after what we know has been a difficult year. the rally in commodities prices with the exception of oil had an impact on shares because commodities producers did very well in the european session, also in canada. and we expect gains today in the asia-pacific. watch this very closely. aluminum, zinc, and check out the metals index up 2%. angie: you mentioned oil not participating in the road. why are prices falling again? given the fact we have better news out of the middle east, the fact that turkey as well as russia seem to have a bit of anticipation in -- a di ssipation in the tensions. russia will not retaliate militarily for the shooting down of its fighter jet whether it was over turkish territory. we'll watch this closely. that takes a bit of attention from steam out of the marketplace in the middle east. that is welcome news.
of course, it produces geopolitical risk which we know out ofhe steam oil prices. not good news for the oil producers but good news for markets in terms of geopolitical risk. angie: thank sos for that. into possible rule breaking now includes the country's largest brokerage. citic securities has confirmed it is under investigation for alleged violations. we have stephen engle look taking a closer look at this. stephen: we all know that this has been under the microscope. since the run up to june 12 high in the stock market and the crash. perhaps authorities looking for a scapegoat. and they are also looking into potential wrongdoing. what we have seen, what we have gotten news of is the citic securities has received notice from the csrc through the saying height -- through the shanghai
stock exchange that it is being investigated because it violated regulations on the administration of security firms. the securities association of china this week said citic had over reported equity swap data by $157 billion u.s. dollars. the company blamed at the time assistance upgrade for the incorrect numbers. citic securities in a statement sayingstock exchange they will cooperate with the investigation. all operations are normal, excepts, really all operations are not normal at this company, because the president as well as about six other citic executives, they are under a separate investigation that was revealed in september of seven. -- september 7 to leaking insider information. so this is another step in the ongoing investigation into securities improprieties,
perhaps possible malfeasance as well. angie: is this a widening of the investigation, that government said worsened this summer stock market rout? it looks like there is a widening investigation into a number of companies. vice-chairman has been and snared into this investigation. 16 people by bloomberg's account undereen arrested or are investigation for various securities industries, fraud allegations or wrongdoing. it is also saying it is under investigation as well by the csrc for the same alleged rule violations that isn't staring citic. -- is ensaring citic. we have the anti-graft chairman atn to a ceo the has gone missing. we do not know his whereabouts. and high punt securities is under investigation for alleged haipong securities is
under investigation. angie: it really impacts the market here. checking other headlines this money. morgan stanley is warning asia to look the on the fed's anticipated rate hike. the regions currencies what we can next year because of -- in europe. the euro is near a 7 month low. that willnley says drag down export driven countries in asia. barclays has been fined $109 million by u.k. regulators for failing to " politically expose clients." was not follow-- during execution of a $2.9 billion deal in 2011. should have been subjected to higher levels of diligence. barclays is among a number of
banks being sued in the u.s. over the alleged fixing of waps.est rate s watching shares in asia, when malaysia open for trade after its first loss in three qu arters. the shortfall of $96 million -- asia's indonesia business side drop in passengers. the company is also struggling with the currency that has fallen 20% so far this year. all right. let's check in on bhp in early sydney trade after the london shares fell to their lowest since 2008. right now we're seeing gains with bhp billiton looking like this today, up 1%. overall we saw that london sell off coming after united nations set wastewater from this months dam collapse in brazil was toxic. let's get to paul allen in sydney for more on this. the u.n. warning, really contradicts bhp's position.
is that right? paul: it does, completely. bhp has previously said that the mud, the 50 million tons of mud that spill from the dam was not toxic. the u.n. says otherwise and has taken samples from the water from around the site and further downstream. it found varying levels 165% times higher -- manganese levels 1000 times higher in arsenic levels 2600 times higher around the site than at the other site they took downstream. they went on to say that bhp and samarco did not take sufficient steps to prevent harm. bhp has not commented directly on the report but previously they did say that the contents of thae dam were not toxic. and it will behave in the environment much like any
ordinary soil. interesting, getting into some difficult territory. after the initial mea culpa, bhp may be finding itself in harder territory. arguing over the toxicity of this mud in the united nations and the court of public communion --- public opinion will generate hard headlines . angie: what are analyst saying about the outlook for bhp? paul: we had that london share price lovings to its lowest level since 2009. if we look at only trade in australia, it is a better picture. 1.2%. example very well be an of value hunting. it is a popular stock. it is right now in the teens, which must be attractive for buyers. we have jpmorgan cutting its rating to underweight. jpmorgan also factoring in a 50% cut to the dividends.
already proclaimed this progressive dividend dead and buried. they have a target price for bhp o f just $18.000. that is against commodities route and uncertainty over prospects in china. 2016 shipping up to be a very interesting year for bhp. angie: all right, indeed. thank you very much for that, paul allen. the world's biggest eye ore miner has been kicked off brazil's sustainability index. -- the world's biggest iron ore miner has been kicked off brazil's sustainability index. the dam collapsed has been described as brazil's worst ever mining disaster. many people died and are still missing. the u.n. says wastewater from the dam is toxic. world leaders meet in france next week to discuss the implications of climate change. s&p is warnings
damage to the environment will affect the global economy and may even cause4 downgrades. climate change could raise the risk of cuts by 20%. the impact is far more intense for emerging markets then developed nations. we're going to have much more analysis on this. later on "first up," we are joined by gavin edwards. he'll be just after 7:30 hong kong-singapore time, 10:30 for those of you watching in sydney. let's quickly do a check of national sterling bank in sydney this morning. up 1.2%. nad has confirmed that it will pursue an ipo of its clydesdale in yorkshire bank in the u.k. you can see renewed consolidation in the banking industry. coming up next, onwards and upwards. after the break, we will ask jpmorgan to gaze into their
angie: russia has agreed to share information on islamic state with french president ollande tries to build a coalition. moscow stepped up its war of words with turkey following the downing of its warplane this week. turkish food imports will face tighter checks at the border. affecting flights, trade and investment here at however, russia has rolled out military retaliation. supreme military council met to discuss the worsening relations with russia. ankara denies helping fund islamic state by buying oil and says that -- it's primarily backed by syria. and present ass -- president
assad is supported by moscow. the first time and nato member attack to russian target. a chinese journalists jailed for releasing state secrets has been released on medical grumpy -- on medical grounds. papers on the crackdown on constitutional freedoms ritchie denies the charges but was jailed for seven years. she is back in a beijing high court. her defense team says it will continue to argue her innocence. the year has been one of worst for emerging markets with more than $50 billion withdrawn from open ended funds. my next guest says investors are finally returning. chiefg us as jpmorgan's emerging-market and asian equity strategist. good to see you.
we think investors are coming back. >> investors are asking about emerging markets. at the moment we are not seeing evidence they are coming back. the reason why we think they will come back is that if you look at emerging-market universe, it is not about iron ore. the tech space in taiwan is 1.5 times the combined of russia and brazil. if you look at the benchmark, it's50% three country, china, korea, taiwan. these are big accounts. so, probably a lot less susceptible to the fed raising rates. the other thing that is going on which is very big which happens on monday is that the avr's become part of msci china. that will make the chinese benchmark 30% e-commerce. so, you are going from this concern on the chinese economy, which is about steel and property, etc., and that is not what the stock market is about. it is 1% materials. 1% steel and cement. angie: china watchers like
yourself and a lot of people who have come up here onthe show have expressed that. they have seen the new economy really emerge in china. do you think that that, though, is enough to propel investor sentiment on china and the rest of emerging markets in asia? >> no, i do not think it is an up even though the micro looks good. the problem is the risk premiums. do you believe the economy sustainable? do you believe the debt structure a sustainable? so, we have some very extreme opinions out there on the currency with people convinced that it must depreciate by 30%, become competitive again. we do not agree with that. maybe a 5% appreciation. probably more a function of what the dollar actually does. when you look at debt sustainability, there is a lot going on in the chinese bond market. bond yields this year have been falling, but they remain very
high in real terms. you have a 3.7% real yield at 10-year in china. think about that. that is a savings pool that normally has a negative yield. there is a good reason why deposits are moving into the bond markets. we are seeing bond spreads, corporate bonds spreads narrowing. the central bank has been cutting rates. this is good news in terms of stabilizing the debt structure in china. and the final thing is, we have had 8% service sector job growth this year. we're seeing the consumer responded to reduction interest rates. remember the consumer debt to gdp is only 24% in china. that is a very low number. so when the central bank cuts rates, people go out and buy more homes. angie: all right, well, clients and asia are very superstitious. the year of the monkey. >> so this is the jpmorgan monkey. angie: very mischievous guy. year of the monkey next year.
do think they're going to cause some mischief in the currency markets? u.s. dollar strength? >> certainly at the beginning of the year were probably get u.s. dollar strength, particular if the fed is going to be raising rates perhaps even in december. angie: so, what is that going to mean, when we talk to the minister venture tray -- of international trade in malaysia. the ringgit, the rupia and all the markets in this region? >> it is good for tray. you take the ringgit or the rupia they have to appreciate very much in the last 12 months. these are open economy so we would expect the relative share of global trade to go up. angie: very good to see you. up atf the monkey coming jpmorgan here for us. coming up next on the cyber ea steppeduth kor up its defenses for 21st century threats. we are live in seoul after the short break. ♪
well, over the last 5-6 years, south korea has come under a series of attacks that it blames on north korea. 2013articular attack in cost the country so much by paralyzing thousands of computer servers and cash machines that paralyzinglso broadcasting by some major broadcasting outlets here. so south korea is basically trying to catch up to defend against the threats by cultivating an army of young hackers. because these are the kinds of skills you can learn better when you are young. and south korea is basically funding a scholarship program that would allow very young, talented programmers to receive education in hacking. is south korea paying attention to this issue now? well, south korean
officials have been finding out that north korea has been developing a unit of hackers for a long time. one estimate says that north korea began to develop a hacking unit in the early 1990's. and right now one estimate says that north korea has 1700 very high skilled, specialized hackeres s to operate into south korea and around the world. so the urgency to train what they call white hackers, ethical hackers to defending is the threat is rising, not just in south korea but around the world. angie: could defense by south korea soon become offense in the same way that the cyber hackers in north korea have attacked south korea very actively? sam: i think it depends.
south korea right now clearly states that it does not have any intention to actually penetrate into north korea, but we have seen in the case of the attack on sony pictures entertainment, that the countries outside north korea are able to put something in north korea that would actually work when they are attacked by north korea. in a way, in the world of cyber technology, defense can often -- defense can be sort of conducted an offense is made. you can sort of put, infiltrate an enemy computer by putting a code in it, and make that work when you're being attacked. so, it is a complicated set of logic here working. so, potentially, eayh. i think it is possible for south korea to do that. angie: they say good defense can be offense. sam kim, thank you so much for that. reporting from seoul.
you can more -- get more on that on bloomberg business bringing together the best of bloomberg news, business week, bloomberg television and new digital content in one address. moreon bloomberg..com. how efficient light balls in japan are driving down demand for power? airbnb is going japanese. the home rental service seeks to boost listing in its fastest-growing market. that's bloomberg.com/asia. check it out. coming up next, after decades of pace, worldacial leaders may feel an historic deal on climate change. we live in a pick and choose world. love or like? naughty or nice? calm or bright? but at bedtime ... why settle for this? enter sleep number. don't miss the ultimate sleep number week going on now! sleepiq technology tells you how you slept and what adjustments you can make. she likes the bed soft. he's more hardcore.
>> we have breaking news from japan with the release of the latest inflation and unemployment numbers. let's go straight to juliet for that. >> angie just coming across the terminal now we seeing the jobless rate for october coming in at 3.1% so lower than survey estimate of 3.4%. that is a good sign for japan's economy showing more people in employment. the job-to-applicant ratio has also fallen. it is coming in at 1.24 as the prior months but below estimates of 1.25 so that is also a good sign there. looking at the national number, the one the bank in japan has been watching closely since july excluding fresh food and
energy, at 0.7 of 1% below estimates of 0.8 of 1%. looking at the national year on year including i should say fresh food and energy coming up 0.3 of 1% as opposed to estimates of 0.2 of 1%. we are seeing at this stage the figures certainly showing as we know that japan does not appear at all to have any inflationary problem, not getting anywhere near the 2% target either. let's have a look at how the yen has reacted. it was a little weaker against the dollar before. holding pretty steady at the moment, angie, 122 so just reiterating jobless rate at 3.1% in october. and the national c.p.i. excluding food and energy of course that is what the bank of japan is looking at more closely coming in at 0.7 of 1% for the month of october, angie. angie: all right. well let's ch ek in on markets in asia on the heels of that right now. to australia where it is climbing 0.6%.
of course really the metals rally is fueling that right now. australian dollar at 72 u.s. we've got chinese industrial data coming out later this morning. so markets taking heed of that. new zealand is 0.1% higher. we also have a weaker new zealand dollar as well. 65 u.s. cents. we're also counting down to the opening in japan and korea. let's head over to japan. this was the case yesterday. futures in chicago pointing to a start of the section above that critically important psychological mark of 20,000 dollar/yen right now slightly weakening. that is going to help out exporters today. well, after more than two decades of wrangling and setbacks world leaders may
finally be about to seal an historic deal to tackle climate change. a global political push and a drop in clean energy costs may help them reach an agreement. the united nations summit in paris starts on monday. we have heidi joining us with more right now on what to expect. >> this could be monumental because this is the very first time the united nations has called for global international strategy to tackle climate change. the number that we're looking at here is two degrees. this is the international goal that's been set. two degrees above preindustrial levels of global warming. we need to try and prevent that. beyond two degrees scientists say we're looking at things like extreme weather events, melting glaciers, heat waves, flooding. actually island nations are looking for 1.5 degrees but that is unlikely to be met. they are looking for an agreement where all countries
involved are going to take steps toward reducing their missions but it does look like ahead of paris have fallen short of the target. we're looking at 2.7 degrees which is not insignificant but isn't enough to prevent the worst case scenario. in terms of a potential deal we could get over the next two weeks, let's try and bring up that previous chart we had there. key elements would include hings like pledgers to count emissions. we had less than 80 countries putting forward pledges in the past. as it is already now 170 countries have come forth with the national pledges now proposed for 2020. we'll also be looking at including things like longer-term emissions goals. longer-term d to emission goals and also a mechanism for countries to be able to come back and make more
ambitious goals as time goes on. we're also looking at accountability because as we know it's not impossible. that is going to be up for contention in terms of how much credibility there is and also a framework for financing for developing nations because obviously they are the ones that need the most help when it comes to being able to finance green energy. there will be discussions about this divergence between developing and developed countries because as we know developing countries, their argument is that just because we're late to the industrialization game why should we miss out on the sorts of economic growth that comes with that? the good thing is, china appears to be onboard because they want a piece of the green economic growth that's being p you the forward. >> and key here is it's all legally binding. all right. haidi lun thank you so much. china's emissions of carbon monoxide are projected to level
off this year as it employs more clean energy capacity to tackle climate change. try telling that to residents of the big cities where pollution levels are starting to soar again. we have a report from beijing. >> much of northern china saw he return of the dreaded air pockets early this month. the skies were so thick this day in beijing the government warned people to stay indoors. the seriousness of the situation reaches far beyond what we can see suspended in the air as scientists increasingly link the fouling of the environment to disease and climate change, a point puncuated recently by alibaba's jack ma. >> when i was 12 years old i went to swim in a lake and i almost died because the water was much deeper than i thought. five years ago i went to lake -- to that lake again and the total lake was dry and a lot of people have disease. 20 years ago very few people heard about the word cancer but now almost most of the
families, my friends, they have people with cancers. >> from the water ways to breathtaking air quality china has kind of a hard time hiding its pollution problem. as winter sets in and the temperatures start dropping the coal-fired power plants start cranking up and the real nasty stuff that gets clogged into your lungs, well it starts going up. this once again becomes the face of modern china. >> that's not to say beijing isn't trying to scrub its air and its image too, of course. beijing does have blue sky days like this one but to get them consistently the government is putting a lid on some of its biggest emitors. this smoke stack in central beijing has been part of the city sky line for more than half a century. usually billowing black exhaust especially in the winter time. however, the end of march, beijing shut it down. it was one of the few remaining thermal power plants as beijing tries to clean up its notoriously smoggy air.
investors at home and abroad aren't taking notes. >> if you're in pollution cleanup you're going to be fine for the next five years. no matter where you are. >> china is the largest wind market in the world and is building more wind farms than any other country. in the last five years china averaged about 100 giga watts of new power generation per year. roughly about 30 or 40 from coal and this year we expect 25 from wind and 20 from solar. solar and wind put together is actually now more than coal. >> an upside to china's slowing economy is its burning fossil fuels at a slower rate. too bad urban residents here can't breathe slower, too. until or if this eventually all blows over. bloomberg, beijing. angie: asia has become the engine room for nonpolluting energy. with the asia pacific region accounting for more than half the world's total new
investment in clean power sources. for more on that we're joined by the senior analyst for asia pacific utilities at bloomberg intelligence. all right. joseph, talk to us about how asia is addressing climate change. >> well, the interesting thing is that asia has been investing in clean energy which is a key tool to fight climate change. but the motivation has been more one of money in returns rather than, you know, climate change. if you look at the governments of china until very recently, climate change was maybe not mentioned in paragraph 15 of whatever edict it had so asia right now has been investing around about 70 billion dollars u.s. per quarter in clean energy. five years ago that was about 50 billion. and another five years ago, before that, 2005 or so, it was around about three or four billion. so the growth has been really staggering in terms of clean
energy. whether you're talking about wind, solar especially in china and india or biomass in southeast asia. >> what markets then are the leaders in clean energy and which are lagging behind? >> the key leader is obviously china. if you think about it, angie, today china in terms of wind capacity. the wind capacity in china is above the whole capacity of south korea. and that's going to double again by 2020. more than double again by 2020 to around about 200 to 250 giga watts of power which is enormous. so china's obviously a leader not just in wind but also in solar. southeast asia has done pretty well in biomass. indonesia -- lagging behind has really been australia, which is quite surprising. they've done reasonably well in solar. but because of policy shifts, right, we're going green, not going green.
we're shutting down coal fired plants, we're not. it should have been a leader but is not. angie: it has a new prime minister. let's see if that changes. thank you so much for all of that. great perspective there. thank you. let's get a conservationist's view on what c.o.p. 21 can and should deliver. we'll be joined by gavin edwards director of conservation at w.w.s. in hong kong. very good to talk to you. what is critical here about the paris summit that we haven't seen ever before on a world stage? >> sure. what is critical is that first of all the climate science is much clearer today than it was a few years ago. nobody is debating the science anymore. nobody is debating the solutions to climate change anymore. and then lastly world leaders are actually coming together and setting a more positive, optimistic tone for an agreement to be struck in paris. so some very key ingredients here that gives us more hope. >> okay. well, what exactly are we going to get out of copit 1?
what are the tangible deals we'll see? >> the single most important one is emissions targets that should add up to driving down global greenhouse gas emissions. what we should see is a number of countries -- china, u.s., india, europe pledging to basically drive down emissions and it is not going to be far enough unfortunately as we heard previously, looking at maybe 2.7 degree celsius because of the commitments out of paris. that is a lot better than a 4 degree world where you have some of the worst impacts of climate change hitting. i think what we'll see in paris is a huge step forward, a big agreement, but more is needed. we need tongue of paris not as a des -- to think of paris not as destination but a milestone on a road with further action needed in the years to come. angie: okay. it sounds very lovely. a kumbaya moment perhaps for conservationists and environmentalists alike but at the end of the day when you boil it down we still have
countries that are polluting. indonesia for one. just the very basic seasonal burning of farmers there for their land. how do you prevent that when the government can't even do that at a really kind of grass roots level? >> yeah. you've hit on a key topic. deforestation has to be driven down to zero. there has to be greater incentives for farmers not to burn and greater incentives for the palm oil industry to clean it up as well. to get to the deforesting areas to create plantations -- angie: indonesia has failed to do that for the past couple years. what makes global leaders think that countries like indonesia can get a handle on things? >> i think because of the mood is much more positive that it is going to be harder for countries to try and step back from an agreament. as you said earlier, as countries come together they're going to have to take things more seriously. i don't think in this century,
what we know about the very real impacts of climate change, we can't have free loaders that just sit back. everyone has to pitch in and do their part. >> as we talk about climate change, there are some real monetary costs here. >> yep. >> the sectors are going to be impacted. companies are going to be impacted at a real base level here. >> sure. >> are governments addressing how that's going to be assauged? >> there are negatives and also positives. if we don't tackle climate change the drag on the economy is going to be that much bigger. we'll deal with flooding, crop failures, collapsing fisheries around the world. just the geo engineering that is going to be needed to protect our cities is multiple times more expensive than tackling climate change. on top of that we're seeing with the blend of technologies that are actually proving themselves in the world. now, there are some industries that are going to be threatened. fossil fuel industries. if you're investing heavily in
coal, oil, gas, i think some of those industries, some of those reserves that are on the books of companies today will not be realized. fossil fuels are going to have to stay in the ground. so there are going to be some winners and some losers in this transition. i guess the question is are the markets going to be ready for that? are they understanding in discounting some of these companies? ecause this policy change is coming. it's inevitable. >> cop21 in paris next week. thank you very much. gavin edwards. thanks. just ahead, will slumping consumer confidence take a dent out of black friday sales? that is the question for our next guest after this very short break. we'll be back. ♪
a challenging time. let's take a look at prospects for black friday with the senior international economist. black friday of course, this is the so named black friday because this is the day when presumably retailers get an onslaught of sales that will push them into profit, into black. is that more the guarantee these days or less of one? >> i think it is actually less of one. i actually look at the u.s. consumer right now and as you've already noted confidence is not sprinting away. income growth for the u.s. consumer is actually still quite modest despite the fact that employment creation in the u.s. is actually being pretty good. what we've noted about the u.s. consumer in this current phase, they have been spending selectively and black friday is one of those examples but they haven't been doing that by
using huge amounts of credit. they've been cutting back on one part of their budget to accommodate the splurge. >> got it. we are also hearing the very low gas prices across the country which is equivalent to a tax break for most americans. i mean, most americans drive every day. when they see the discount at the gas pumps this does instill confidence. >> it does in a way. we've already seen that the number of miles traveled by the u.s. auto fleet if you will has gone up. and that's a very good sign. but how much is the volume demand for oil increasing? we'll have a look at the crude oil inventories in the mainland united states. they're not eating into those. they are at absolutely record levels hitting physical capacity constraints. the i.m.f., they were actually pushing that thesis this time a year ago that lower energy prices would be great news for the advanced country consumer and consuming countries like india. fast forward to this year. what's the i.m.f. saying?
we're more worried about what's happening in the commodity exporting countries and the weakness in demand there vs. the translation of income to the advanced world in those big consumers of energy. angie: consumption in the world's largest economy is critical to the global economy. what does this mean for export nations that supply to the consumer in the u.s. like china and much of southeast asia? >> well, if you look at global trade right now the u.s. is a lonely bright spot. so volumes into the u.s. are okay. relative to everyone else. that is a very low bar to jump right now unfortunately. and the state of global trade in this time zone, very, very soft indeed. now the i.t. product cycle has something to do with this. we know we had the iphone 6 launched last year. that strayed figures for a short period of time but the now equivalent product launched this year to really give impetus and that's leaving trade flows very underwhelming.
angie: we just finished the singles day event that alibaba has grown into this enormous, giant. has that had any impact on consumer behavior outside of china and maybe impact black friday? >> i think one of the key things about singles day this year is how global it was. the number of foreign brands who are actively participating, actively marketing their participation, and also consumers outside china not just the -- everybody realizing this is one of the great discount events globally. and i actually think that what distinguishes singles day from black friday is how international singles day is becoming and with the u.s. dollar so strong right now, the idea of getting a discount from a u.s. department store is far less attractive for someone sitting in, say, frankfurt or sydney because the dollar is so high. >> that is a great point. let's see how it all plays out.
black friday in the stores. cyber monday when everybody else can engage online. thank you so much. joining us in our hong kong studio today. coming up next, we'll take a look at whether one japanese commodity veris thinks they will get a boost after winning a deal in indonesia. stay with us. you're watching "first up." ♪
its tender offer for the company to take up what i believe it doesn't already own. here is our -- okay. that is very misleading isn't it? shares are up 80% but obviously well off. >> that is not what it looks like there, david. >> give the man a minute. angie: okay. where is it going? there it is. there it is. [laughter] >> the tender offer is about 20% premium. angie: all right. >> i'm looking at japan radio. what does japan radio do? she actually wanted to know what the stock did. t japan radio does work in radio. manufacturers -- manufactures and sells radio equipment in japan. it has cut its operating profit though 57% to 3 billion yen so expecting that might come under a little bit of pressure today but i think that's quite a nice chart for a friday. >> yes. >> a great chart. >> it could have been a red
i.o. we didn't know that. >> radio. >> just like the people on this set. >> thank you. >> that was a sexy looking chart. how is that? give you all a little love this morning. this is a good looking chart. don't you think? >> don't tell me it's misleading. >> looks like the matterhorn. >> that's true. j.g.c., a company conglomerate in japan that does oil and gas services, chemicals. i think it has a food business as well. it's in all sorts of business. his is a $-tsh it just won a $392 million contract to provide services to a refinery in indonesia for the biggest oil and gas player in indonesia. a big deal and we know japan is big in southeast asia in terms of oil and gas service. angie: a big deal and maybe a big deal today as well. thanks, guys. stocks our reporters highlighted are based on these yee veins.
angie: deflating prospects bank of japan's 2% target remains a distant dream as consumer prices fall again. under scrutiny, the largest brokerage being investigated for allegedly violating market rules. and just capital. hong kong enjoys a stellar year for ipo's. we'll see just what makes the city so attractive. welcome to first up. i'm angie lau live from our asian headquarters right here in hong kong and streaming on your mobile and bloomberg.com this friday morning. all right. japan's 2% inflation target
remains a dream for now. although there are some signs of improvement. one measure this morning showed prices rising last month. meanwhile, japan's jobless rate fell to 3.1% in the month. for more here is our japan economy editor jody schneider in tokyo. jody, we saw a decline, however, in core c.p.i. what does this mean for the inflation trend? >> well, you're right. core fell which just excludes fresh food. when you look at what they call core core that actually rose 0.7% and excludes all food and energy. and so that is the one that we think the board of the bank of japan and governor will be looking at. that supports their view that inflation is the inflation target is rising. that they're trending toward that. so that is the one we think the b.o.j. will be looking at in
terms of any possible policy changes in the future. >> analysts and economists like that we surveyed here at bloomberg and talking to everybody, thinks there is a big potential for more stimulus. so based on the figures we're seeing today, jodie, can we expect further easing or other changes from the b.o.j. at the policy meeting in mid december based on this? >> well, the economists bloomberg surveyed are actually very split as to whether there will be further easing over the next months. half of them or approximately half say they think there will be between now and april. another half say they won't see any for the foreseeable future. if you look at the core numbers that are rising that would support the governor's views that things are moving in the right direction and would seem to speak against further easing. however, the governor likes surprises so it is really
uncertain at this point. you could read it both ways. angie: what about the unemployment figures that came out this morning? what do they tell us? >> very strong employment. 3.1% was the employment rate which is historically low, the lowest since 1995, the unemployment rate. that is a strong labor market number. t would seem to point to higher wages though we've seen very slow wage growth even with very full employment so that is going to be another issue that is going to come up a lot at the prime minister abe keeps talking about the need for wage growth for companies to put some of their very strong profits into wages. we haven't seen that yet even with this very full employment. >> jodi schneider, thank you so much for that, out of tokyo. let's see if the numbers out of japan helped lift asian stocks out of their slumber this week. david is standing by with the
opening in japan in south korea. >> i think that is something to ponder on, right? in an economy with full employment but you're not really seeing broad based wage inflation. i mean, something's got to give at some point. there must be something wrong with that or perhaps you may have to rethink where we are as far as technology and the frontier. okay. that's a whole other debate all together. four minutes into the japanese trading session, that's where we are at the moment up roughly 36 points. just about 20 points short of 20,000 right now. i mean, this is a market that's really been able to attract foreign portfolio influence. in fact, of all of the markets here in asia that were able to derive some data, japan is the only market that's actually been able to attract the net inflows. everywhere else from philippines, indonesia, india, south korea have actually seen money flow out. so we're actually out 18% since mid october. i believe we are now, we've
attracted for japan over $4 billion in net portfolio inflows. just into the stock market. let's have a look. japanese yen. not a lot of reaction there. 122.63. the reason i bring this up and it is important is you now have to take a look at how this plays out when it comes to the japanese -- euro/yen, that cross. what we saw yesterday, was a lot of these car makers for example in europe were a bit up. v.w. up over 3%. a lot of broke radges have actually flagged this already. the more euro/yen continues to fall the more disadvantageous it is obviously to a lot of these car makers over in japan. you're looking at costs for example. the cost is increasing. you're seeing an adverse impact from currency. you have metals prices right now. let me get you the opening numbers for the car makers in japan. not a lot in their fraction of 1% gains for honda and nissan
up 0.9%. euro/yen. 130 right now also a five-year low against the u.s. dollar. and before it gets to australia, let me just point out what's happening here. as far as our math is concerned, let me show you. i mentioned v.w. get some meat into this. there we go. that's europe of course. the u.s. markets were closed on the holiday. that's the best lead we can get here in asia this morning. a little bit on the diamondbacks. up one in the fourth. a little bit on the dax. v.w. up 3.5%. angie? angie: david, commodities also a big story this morning. how is that affecting sydney minors? >> another interesting angle. certainly we will be able to see the full impact of this when shanghai opens up. you look at the futures market there. metals practice already a bit up substantially yesterday. 2.5%.
3% gains. you look at nickel. prices you also have up. that's how australia looks up 0.4%. we are seeing a decent bit when it comes to the minors. so the greenest of the green or the brightest of the brightest here, basic materials up 0.8%. digging deeper there we go. let's just give you a broader picture. 10 of the 12. not a bad day. let me show you as well, some of the big names. 2%. ve south 32 up lot of these miners are more diversified. so a big exposure when it comes to nickel getting bought up substantially, 2.7%. rio tinto a lesser extent. in australia one stock we've been tracking all week for all of these reasons. the share price can't find a
floor. down 50% yesterday. we were down for the 22% right now t's hard to believe this time yesterday the stock prices trading closer to $2 a share so we'll continue to track this. we haven't heard obviously some comments on the stock from the company. so let's see how it all plays out. hopefully this is the floor. the stock is lost with today's losses about what, 80%, 85% i wouldn't be surprised. 85% of its value just over the last six sessions. angie, back to you. >> okay. thanks, david. well, china's inquiry into possible rules breaking in financial circles has drawn in the country's largest brokerage now. the company has confirmed it is under investigation for alleged violations. we've got a closer look into this story and what are they accused of? >> they are the big boys on the block. the largest brokerage and are in the cross hairs if you will. of course the president already under investigation according
to -- i'll get to that in a bit. the latest news is citic securities saying it has received notice from the securities regulator, this was in the statement late yesterday on the shanghai stock exchange, saying it will be investigated because it violated regulations on the supervision and administration of securities firms. now, basically the securities association of china earlier this week said citic over reported equity swap data between april and september. this coincides with the big sell off of course. and the company has blamed a systems upgrade for it. securities regulator does not necessarily buy that. in this statement to the securities or the stock exchange late yesterday, citic saying it will fully cooperate and all operations right now are normal except as i mentioned about the president being under investigated things are not normal with citic securities right now.
the president among seven executives under a wider investigation possibly to punish the largest brokerage for the big stock market rout. chung is being accused of insider trader and leaking and no nformation comments have been made about that investigation. >> it seems to be a part of an investigation that's been widening since the summer stock rout. >> definitely intensifying the crackdown we've seen. a number of different people being ensnared including a vice chairman of the regulator, itself. there's been some key hedge guosen icials and securities saying it too is being investigated for possible rules violations similar to those i just outlined by citic securities. 16 people according to bloomberg's latest count have
been arrested or are under investigation. on top of that of course rlier this week we had those allegations about antifwraft investigations and we know the chairman and c.e.o. has gone missing. angie: where is he. all right. thank you so much for that. stephen engle. all right. in other news world leaders meet in france next week to discuss the implications of climate change. it is being warned damage to the environment will affect the global economy and may cause a downgrade. studies show climate change could raise the risk for cuts by 20% and says the impact is far more intense for emerging markets than developed nations. india is said to have hired banks to sell a stake in the world's largest coal producers. sources say lendors are working on the coal india offering. the government wants to off load about 10% valued at $3.2
billion. india is hoping asset sales will shrink asia's widest budget shortfall to an eight-year low. national australian bavenlg will pursue the merger and ipo of its clydesdale and yorkshire bank operation in the u.k. this is expected next year and could be a consolidation in the banking industry. shares are up in citi this morning. apple supplier lg displays says it will spend nearly $9 billion on a new production plant in south korea. the facility will produce ultra thin screens that display colors more vividly. production is expected to start in 2018. that's when apple will adopt oled screens for future iphones. lg display shares are gaining at the korean open. right now trading near a five-month high at 2.8%. close to three right now. coming up next, it's been a good year for ipos in hong
♪ angie: welcome back. you're watching "first up." let's check in on market trading in the asia pacific. the australian equities really gaining thanks to the metals rally we've seen in commodities. 10 of 12 actually gaining. nikkei 225 climbing as well along with kospi today. well, green signs and bright spots including hong kong enjoying its stellar year for ipo's with value set to hit a five-year high. new research from the mcquarry
graduate school of management says share sales here raise more than in the united states. let's take a closer look right now with mgsm's alex reno. thanks so much for joining us. so, professor, as you can tell us, the viewers, the students, why is hong kong so attractive as an ipo market that has even more valuation than the u.s.? >> sure. so what we did was we did a small piece of research where we compared hong kong ipo's to u.s. ipo's and we compared how well ipo's do in hong kong in terms of the amount of capital they raise relative to all the -- or the price at which they raise their price or relative to what they come on the market at and we find that ipos in hong kong are basically priced in the sense that companies are able to raise more capital else being equal in hong kong relative to similar comparables
in the united states. >> let's go a few years back when alibaba was up for play and hong kong exchange, fighting with new york, and alibaba chose new york. was this a mistake? >> averages suggest that if you're at the smaller end of the market, a megacap, it makes sense to potentially go to the u.s. because you're included in the s&p 500 and there are advantages to that. but if you don't make that megacap status, and most companies don't, they cut off entry into the s&p 500 in the order of 3.5 billion, 4 billion u.s. dollars. you don't make that cut off you're better off remaining in hong kong, entering one of the local indexes such as the hang seng and you'll get more exposure than you would otherwise in the u.s. where you probably get lost in the mix. angie: how much has hong kong shanghai connect often changed
the equation? >> i think that is really an important mechanism. it is absolutely fantastic and exciting that the two markets are connected and you can get chinese money buying into stocks listed on the hong kong stock exchange and vice versa with shanghai. i think that's a really important conduit for generating the types of results we've seen in our study. >> even after the summer stock rally? >> i think even after the stock rally yes. >> well, a little bit of a pause but still talks are ongoing and the likelihood of a hong kong shanghai connect, that is going to amplify the kind of ipo flurry we'll see here in hong kong? >> i think anyone who comes to hong kong and lists on the market here, does an ipo in the local market, does really well. the company does really well. they raise great capital and that is simply because of the competitive landscape and the amount of -- the attraction or the amount of money chasing those ipo's. i think they do well
regardless. >> okay. at the end of the day, though, it is still a jumping point into china. and vice versa. and, you know, it is seen as a financial hub that is very much tied to a slowing chinese economy. >> yes. you know, despite that our results are based on more recent data so absolutely -- >> so you factor that in already. >> we try to control for as many differences as you can imagine. i think the other interesting part is that, you know, we're using the u.s. as our benchmark and this is the second of a number of studies we've done. and the results are always similar. the local markets seem to provide more value. and hong kong unceasingly so. just most deals are priced at fear value. so when you come to market in hong kong with an ipo you get fear value. in the united states you tend to get 20% less than fear value
so your stock is discounted. >> but still does much of the secondary market press out? i mean the ipo is still very much an exclusive game here. >> but it is in the united states as well. more so in the united states. that's got to be one of the key drivers. so i think it's less so an exclusive game in hong kong and therefore more competitive and that's why you get the better deal. >> hey, we're always up for a deal. dean, professor, and management professor joining us here in hong kong. thank you so much. >> thank you very much. >> checking some stories making headlines around the world now, russia has agreed to share information on the islamic state targets in syria as french president hollande tries to build an international coalition. moscow also stepped up its war of words with turkey following the downing of its warplane this week. turkish food imports will face
tighter checks at the border and new sanctions are planned affecting flights, trade, and investments. however, russia has ruled out military retaliation. turkey's supreme military council met to discuss the worsening relations with russia. ankara denies helping fund islamic state by buying oil and ays the group is primarily backed by syria. the shooting down the russian plane this week, the first time in half a century that a nato member attacked a russian target. if moscow responds, ankara could call on the western alliance for help. for e ethics committee futbol's governing body has donated 48 luxury watches to a nonprofit organization. the brazilian government gave the watches to fifa officials. however in light of allegations at fifa they will finally pass to the ethics committee.
it's friday, november 27. these are your headlines. let's get to the simmering tensions between russia and turkey. continuing to hammer turkish financial assets. weakening for a fourth straight day. the bond yield has actually jumped to a six-week high. traders also had to take into account the government dropping the word "independent" from a reference to the central bank monetary policy, a move that was played down by the deputy prime minister. to india, outflows from the country's financial markets are intensifying this month helping drive the rupe to the weakest level in two months. local currency bonds have dropped the most since may by over a half billion dollars. global funds have also been pulling out of the equities market closing out 750 million from local stocks. now year to date the balance for foreperson portfolio investment is still -- foreign
portfolio investment is still well over $3.5 billion. morgan stanley is the latest bank to predict a sharp drop in asian currencies next year especially the "exporting currencies" apart from the looming fed rate hike it said don't forget the euro will be weakened and add another problem for asian exporting countries and their central banks to adjust to. shipments from china, south korea, and taiwan have already fallen for at least eight consecutive months. and the other side of the same coin, exports out of europe are actually up for five straight months. now, let's get to these forecasts and get some numbers in there, looking at a 12% decline for morgan stanley. one they're looking at 1300 by year end next year. as for the dollar, they're expecting that year to date look at the same dollar. there we go. 140.83. 149 is what morgan stanley is saying.
and the taiwan dollar, they're expecting that to fall to 36 from 32.54. those are the stories this morning. angie: all right. we have breaking news. law firm slater & gordon continues to tumble in sydney. shares trading now at a record low. down another 25.25%. the company lost half its value yesterday after the u.k. announced proposals to change the legal rights of people injured in car accidents. all right. coming up next putting down a marker. find out why the number two is expected to play a significant role at next week's climate change talks in france. first up, back in two. ♪ . .
chinese regulators are a company for a legit securities violations. critics say they will actively investigate the csrc. they believe that citic underives are already investigation for insider trading. hounded forbeing weeks, industrial trading in metals in china -- pounded for weeks, industrial trading in metals from china all made gains in the london trading. beijing may also step in with state purchases and shortselling bans.
and let's also look into that meeting of metal inc. them -- withn with zeb. seeing a metals raise, nicole, and the london's exchange -- london exchange is rising as well. the chinesestand major producers will be meeting tomorrow to discuss their reaction. this is largely a problem from china's own making. there has been a boom in commodities, and now that there is a slowdown, there is a glut, it there is overcapacity, there is oversupply. they have too much capacity and they need to bring those numbers back and the amount being produced. they will meet tomorrow to
perhaps correct a problem that they created, and this have -- has a global impact. this has an impact on the base metals, in particular, and the global producers. overall, it is a net positive for an industry that has really had a challenging year, and analysts are going to say that next year, we may see recovery. angie: one thing that we haven't seen recovery in is oil. prices are falling there again. why? this is actually good news for the wider world because we saw a russian fighter plane get down to near turkey, and we hear that there will not be military action in response, of course, there was concern that this could escalate and escalate the wider conflict in the region.
have pulled that risk for the moment out of the oil market, and that why it -- we are seeing that. opec producers are not going to like this, and the london brent benchmark is down as well about 8/10 of 1% and as we said, london brent is lower. as we end the week, it ends positive for the markets. we will be watching those chinese producers of base metals. angie: ok, thank you, zeb. ♪ well, leaders from 100 20 countries gather in paris next week over climate change talks. they are focusing on keeping global warming from rising above two degrees.
matt miller from bloomberg financials -- nath bullard from bloomberg financials. nath: here is where we are right now, you've got a lot of things going on at this conference at cop21. they are talking about the political process of reducing climate change. this goes way beyond the trajectory of two degrees. you have a lot of things coming in from indc's. a little bit below
the trajectory, but in order to two degree centigrade change, you'll have to have massive changes in carbon emissions throughout the world. angie: there are a lot of changes in terms of technology. the powerou look at sector, it is different than elsewhere. the power sector has an impact in technology. i can show you exactly what is going on. we power sector is one where will see in missions tending to fall off, probably in about 15 years or so, and that is because of renewable energy, renewable natural gas, but the challenge is how this is going to shape out country by country. the u.s., europe, these are economies the grove relatively slowly, and they have relatively advanced energy sectors. china, they have the same
situation as their growth will slow, so nonetheless, we will look at these forecast. iaea will see these forecast going up, but we see it going and somewhat tailing off in about 15 years or so, that is ahead of the iaea. this one would be very, very difficult to hit. hitting that would involve the carbonworld reducing dioxide emissions in the world as in the united states right now. angie: tell us about the overall trajectory. things that we -- those emissions come from things that we use right now, heating, our cars, and it is not just in the road, but on -- in the air and on the sea.
you are not going to power a large ship with a solar panel, so this is going to take some real, wholesale technology changes. angie: that is a clear view from cop21.llard regarding and we have discussions of clean energy and climate change. stephen engle's reports from beijing on more. stephen: much of northern china had air qualities that were too and for people to go out, scientists are increasingly linking the fouling of the environment to disease and climate change. a punctuated recently by alibaba's jack ma. when i was 12 years
old, i went to go swim in a lake, and i could go dive into it because that lake was much the per then i ought. -- than i thought. when i came back five years later, the lake was much more shallow. have cancer, most of the families and my friends have cancers. there is literally breathtaking air quality, and china has a tough time hiding its air pollution problem. firenter sets in, the coal factories start cranking up the carbon emissions. again, this look becomes the face of modern china. beijingot to say that isn't trying to scrub its air and its image. beijing does have blue sky days like this one, but to get it consistent, the government has
to put a lid on some of its a gift in matters. biggestn some of its emitters. pls particular power ant has been a minting carbon dioxide -- been emitting carbon dioxide. >> if you are involved in aleutian cleanup, you are going to be fine for the next five pollution cleanup, you were going to be fine for the next five years. 40there are roughly about through 50 gigawatts coming from coal, and 20 gigawatts from solar, so it now we see wind producing more than coal. stephen: the economy is burning
fossil fuels at a slower rates. stephen engle, bloomberg, beijing. angie: time now a look for some of the top stories at are bloomberg terminal. here is heidi. and they'll -- and vale was kicked off brazil's index. theas involved in worst-ever mining disaster in the country. is wastewater from the dam toxic. british largest -- britain's provider,amond lloyds, is to cut 945 jobs by 2017.
it is also lowering costs by slashing assets and closing branches. and air asia swings to a three loss.-- 3q it has seen a drop in passengers and it has been struggling with the down ringgit in the past few years. angie: coming up next, japan's got talent, but is it what businesses want? we are going to find more when "first up" returns. ♪
no guarantees on the country of iran. the iaea says that to ron has tehran hasthat removed over 400 centrifuges, and it might dictate how they remove sanctions from iran. all four branches of the armed forces will be under one command for the very first time as xi jinping personally manages the shakeup in china. it will be completed by 2020. completede most consolidation of party control over china's armed forces. forinese journalist jailed communicating state secrets was arrested last year for sharing papers on communist party
crackdowns on a constitutional freedom. she denied the charges at the time, but was jailed for seven years. now she has confessed. her defense team says it will continue to argue for her innocence. all right, let's return to one of our top stories this morning, japan. inflation fell again, leaving that 2% target way out of reach, but there was better news regarding unemployment. however, analysts may not be as optimistic as they currently seem. the hays m.d. from reallyand japan has a tight market here, so it means that it should be that people who are seeking jobs who are the most valued, and yet, you say that they are not. why not? : we have an interesting
challenge in japan right now. headve 3.1%, which on its is good progress, but we have the fastest-aging population in the world, and that presents challenges in finding the talent that japan needs to compete on a global scale. ,here are really two options and -- [indiscernible] angie: is there a challenge mismatch here? the a lot we find are of individuals are employed and what we think about the bubble generation, we think of the 40 through 50 year olds, and they are without jobs. so companies are thinking about how to move them or re-educate them and bring them back into the market to give them some of the talent that we need.
-- the employer for specter employee perspective, they could provide talent to the japanese market. angie: like what? the japanese market has been looking for highly-skilled migrants, but there are looking most specifically in the technology sector, so the government has been able to increase the number of foreigners that we have working in the technology sector to around 30,000 today to around 60,000 by 2020. the first wave of this is starting next year when the government will target in vietnam, initially, and will look to bring some of these i.t. professionals in and to educational employment. japan'sut isn't education system regarded as one of the best in the world? why is it failing japan now?
is, angie, it is a very high quality education system, however, it is not necessarily delivering the vocational requirements needed for today. the government recognizes this and they are talking about now putting in place a new tocational organization develop those vocational skills that are required. about ok, and what womenomics now, we have talked about their. -- about that. is there a drive to get more women into the workforce right now? : i think it is a fascinating topic, angie, and i think the government had good intentions here. of thethink about some moves that they made, it is very encouraging, we are talking about companies with more than 3000 people setting their own targets to include more women in
their workforce. we are also talking about getting 30% of management positions filled by women by 2020. butll sounds very good, there are no incentives or penalties to reward people or penalize people if they don't meet these, so this is not going to give us the traction that we need in this regard. -- laborbel force force participation could increase by 16%, the could be a significant opportunity, but we really need people to understand and embrace women. angie: you're recruiting firm is in a very unique position to tell us what companies are complaining about and what potential employees are complaining about when it comes to the japanese labor environment. marc: the organizations that we are talking to our by note -- to are the moaning the fact that they don't have the technology.
appetite of the preparedness is increasing now for organizations to look overseas and to import the talent that they need. from an employee's perspective, it is being able to develop a skill set that is required to move into those areas with the highest demand, so i think the desire is there on both parts, but there is a lag between the skill set matching the demands. we will have to educate these people and grow these skills and it is absolutely imperative, but it will not happen quickly enough. i think broadening horizons, tapping into a more flexible workforce, and maybe using contractors and temporary staff more than we have, that could theove more than half of positions held by women right now, for example. i think there are a number of angles and a number of options that we can explore, and people just need to broaden their horizons. angie: when it comes to japan's
-- matched yet? david: no. >> until now, i am the winner. ¥3 million, so radio equipment products and other is up by 57%. angie: investors were not expecting that. much.ght, jgc, nothing david: throw me a bone here. [laughter] david: i am the only one making money here, people. zeb: that's right, thanks. anyway, if you bought into this stop, the japanese -- stocks, the japanese conglomerate, you made some money with a that. look at that, ¥2000 per share. and this would provide a
of summary do of construction work to change refinery capacities in asia. so let's watch that one. angie: nothing is happening in kenko.com.in retailer, nothing should happen before the stocks should close. [laughter] angie: it's all right, it is the day after thanksgiving. ♪ all right, trending business is coming up next. ris is here. we've got black friday and we are going to have a