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tv   First Up With Angie Lau  Bloomberg  January 3, 2016 6:00pm-8:01pm EST

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>> the first stages of the economy in 2016. gaming revenue at a five-year low. look.e to first
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let's check in on the markets. australia is starting on the back foot. quite a santa claus rally for australian shares. counting down to the opening in .apan the yen more or less unmoved. one market is closed in the region. new zealand still enjoying an extended new year holiday. it is the first day of a brand-new trading year.
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not much has changed in china. that to speed economy. manufacturing is continuing to weekend but services are continuing to gain strength. steve: same old story. pmi coming in with contractions just below 50. let's bring up the bart chart. five straight months below 50 for the pmi. basically five straight months on the downside. we had some stimulus, and the first part of the year. the stock market rally in june. now we have had that streak of five straight months. the longest streak of contraction since 2009.
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this is the old drivers of growth. they are trying to rebalance this. not too much of a surprise. we had six interest-rate cuts in the last year and a month. targeted stimulus measures. not really feeding into the old drivers of growth. the best we can say is we've seen the bottom. services.e seeing is 54.4. government'sto the playbook that we are in the process of rebalancing the economy. telecoms, banking, property. taking a bigger portion of the economy. is it enough to pick up the slack? we are also getting that private gauge of pmi.
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steve: that tends to be more bearish. it is a survey of mostly private-sector manufacturers. was expected to show further stabilization but below 50. it rose to a six-month high in november. still in contraction. we are also seeing the slowdown play out across southeast asia. togapore is expecting growth easily coming year. indonesia missing its growth target for the entire year of 2015. let's take a look at indonesia first. this is supposed to be one of the regional great hopes. >> to put in perspective,
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indonesia has been slowing for the last few years. it failed to reverse course last year. gdp set to growth 4.7%. over 5%.t was it is also below what was posted the year before which is just around 5%. blame it on weak commodity prices which put exports. the slump hindered economic growth. even though the president had a growth plan. it was supposed to cut red tape and boost infrastructure spending. not one but seven stimulus packages to prop up investment and growth. moves in the right direction that too little too late.
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it is a seamless global economy. this: you talk about challenging global environment and singapore is very much part of that. haslinda: growth will slow to 1.3% in the fourth quarter. it escaped recession in the previous quarter. the final reading is not due until february. the past year was volatile. the year ahead won't be any easier. there is a note of caution already sounding by the prime minister himself. he says the economy is slowing, undergoing a transition. facing fear some competition.
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1997worst decline since for the singapore dollar. aidi: it is the switzerland of asia but is is expecting some volatility. let's check in on some of the other headlines. south korea says it wants to boast boost growth to 3%. a statement from the president says the government will support spending. it will also push through labor reforms. the state bank of vietnam has set a daily reference for the daily dong. was devalued
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a number of times last year. challengeinues to u.s. navy dominance. it is building a second aircraft carrier. the defense ministry says the new vessel is under construction at the northern port. the first time that the project has been officially confirmed. the federal reserve vice chairman says rates may need to be raised further. if financial markets start to overheat. raising rates for the first time since 2006, janet yellen said the pace of increases will be l.adual a
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new sales targets. we will bring you more on that. it is the first trading day of 2016. the hope for better fortunes over the next 12 months are high. david: it is going to be hard to call. we often cannot these forecasts. trying to talk to the analysts. but these things change. the sentiment right now is not exactly the best. we're looking at back-to-back losses in asian stocks. the commodities route was a big part of it.
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drop in oil prices really a into earnings at a lot of these asian shipbuilders. commodity production has been pulled back. you alluded to the second half selloff. will those conditions persist? a lot depends on where these markets go. a lot of the asian markets with the exception of the chinese mainland are actually trading well below their five-year averages. so they are cheap and they are cheap for a reason. but if you look on the optimistic side it is probably time to invest in these areas.
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look at japan. that is only about half of the five-year average. india is also below the average. analysts were forecasting a convergence. if you do want to exposure to equities, stay on the more defensive side still. : at this time of year we get a lot of forecasts. dave: this is the forecast for
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the two in japan. you have elections in japan and you can look for the new government to come out with economic measures. interesting, too forecasters said we will see a rally early. also default risks. that is what it looks like but these will change. haidi: we will see how all that plays out. you can get more on the day's top stories at our digital
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destination. we take a look at china's forecast for the year ahead. why indian bonds are the top pick for some funds. next, what to watch out for in 2016. ♪
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attention is escalating rapidly between saudi arabia and iran. riyadhs took place in and in the gulf when the embassy was set on fire. saudi arabia has cut diplomatic ties with iran.
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more shooting at an indian airbase. 11 people have died. pakistan has denounced the raid and said it is committing with working with india to fight terrorism. much of eastern china remains blanketed by smog. air quality readings in beijing and other cities were many times above the international safety standards. but the weather is expected to improve things today.
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let's get back to the latest data out of china. to a low for manufacturing. economist.chief this is the same old china story. a rebalancing of the economy. glenn: this is going to be one of the key themes for 2016. the china manufacturing sector that has been so kind to to the global economy and commodities exporters is in a fairly significant slowdown. manufacturing production is rather weak. economyt of the china accounts for about 50% of gdp.
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services are picking up. they might be underestimated. that accounts for 40% of gdp. as china rotates from a to more ofng economy a consumer oriented economy, there are very few economies that actually have a higher consumption exposure to china then they do an investment or commodity exposure. though china is enjoying some success in rebalancing its the global economy is not adjusting as quickly to that change.
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that transition a very weak looks set tochina continue. the overall picture is likely to be one of trade weakness. haidi: how concerned are you about these supply-side reforms? turbulence of last year with the devaluation of the currency. how much has that derailed the reform agenda? glenn: it's important to those are parts of reforms to move toward a more market-based and market determined economy. they were not handled well.
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timing was not great. i don't think the reform agenda has exactly been derailed. that is important to remember that most important reform china is this rebalancing away from production-based economy to a consumer and services-based economy. the figures over the weekend confirmed that that is happening. i think authorities will be more comfortable with pursuing some of the more challenging reforms such as interest rate liberalization and capital account liberalization. there is a clear timetable for that. haidi:
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china is not the only economy struggling with these reforms. last year there was a lot of hope for indonesia and india. have you see that going into 2016? glenn: with indonesia let's remember that the southeast economicernation community came into being which is an effort to create a in that region. it is a cruel irony that this free-trade area has come into being at a time when global trade and the sensitivity of global trade to gdp growth is so weak. that area will continue to struggle.
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asia, 2016 will probably be the fourth consecutive year of economic cooling. that is an unprecedented slowdown. historically the region has always bounced back. it is done so on the back of trade. we are not in that environment anymore. haidi: let's hope that the more optimistic view plays out. taiwanese voters are expected to ask for a change when they go to the polls. we will speak to one candidate who is rocking the election. ♪
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haidi:
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the front runner in taiwan selection has promised a more open government if she wins. she says the ruling administration is not listening. promised to improve government efficiency and transparency during a tv debate. she is on course to win despite warnings from china that relations may collapse if the government rejects the one china framework. ♪ >> is best described as folk metal. occupied by japan, more for with the trends of today. he is not only the front man of
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the country's biggest metal band but he is a voice on the political stage. he wants an independent taiwan. most young taiwanese consider taiwan to be a country separate from china. they don't want to appease china. we have to protect our freedom and our democracy. we need to normalize our status. conflict with china may be inevitable. every path has difficulties. >> he actually grew up in supporting unification with china. he is now gunning for the legislative seat of a powerful incumbent.
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he is a generational candidate. the current government is the biggest disaster. havingyoung people are more of a voice. my generation grew up taiwanese with a democratic society. the opposition candidate gets the message. but it may be too late. poll numbers suggest a sweeping opposition victory. eric: they said you are not as handsome as tom cruise. what about tom hanks? forrest gump. freddie is running with the
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expectation of winning. history may not be on his side but the metal fans of taiwan are. haidi:
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haidi: pointing to a slightly lower open in the tokyo market. ♪ the first economic reports of the new year confirm that there is a two speed economy in china. the manufacturing pmi weekend pmin while the services
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edged up. indonesia says it missed its growth target for 2015 because of the global slowdown and the commodities slumped. 4.7%,onomy expanded at missing its 5.7% target. the budget deficit was 2.8% of gdp for the year. thisrs are hoping that year is better than last for asian stocks. slumped caused stocks to fall two years in a row.
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let's check in on the markets this morning. australian shares are regaining momentum slightly. that country had quite a santa claus rally. the australian dollar down a bit. we are also counting down to the opening in japan. up by 3/10 ofures 1%. the dollar yen figure is down a bit. for the first time in 25 years it seems that foreign investors need the wrong bed when it comes to japanese equities. juliet: the first time since 1989 that foreign investors that
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the wrong way. we had that big slump coming through in the global equity market last year. it just seems they really missed the boat. the last time we saw this was 1989. overseas investors in the japanese market account for two thirds of traders. you would think when they sell $1.9 billion worth of shares it would cause a massive downturn. japanese investors were really pushing into the market. japan's own pension funds and central banks took their place. goldman sachs tokyo says it was a bit of a mistake and that foreigners sold out. it was the fourth year in a row higher.aw the topix
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we may see the investors come back in 2016. japanese equities smashed global equities. this is a one year chart. you can see how the japanese market outperformed other markets. in u.s. dollar terms. if you look at what the s&p 500 did, down less than 1%. so the japanese story was a massive divergence between the japanese market and the world index. analysts were saying the japanese shares are not that expensive.
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now they are predicting a fifth a yearly gain. companiesicultural and drug makers and retailers doing well. we may see another strong year for japanese equities. haidi: 2015 was a bad year for casino operators in macau. tim: it was certainly a good news bad years situation. december was just the same. decemberas down 21% in
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and that took down 27% for the quarter. are down now about half for relative to where we were back when things peaked in the first quarter of 2014. that is the bad news. the good news is we seem to be stabilizing a bit with a 21% drop in december, that was the smallest decline we have seen all year long. the hope is that we are starting to find a bottom. if you look at the chart, the yellow line is las vegas. that shows you just how big acau still is relative to relatively static yellow line for las vegas. and the mass-market businesses of macau still
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outpaced those of las vegas. haidi: these are invested in stocks last year you would've had a stomach churning year. if you look at it from a two-year perspective, these gaming stocks are down about 70% from the peak. that is worse than the revenue number. we have seen margins contract and profitability decline. at forwardlooks consensus on the valuation perspectives. elation gone from a r to a much more normal level. we still haven't tested the lows of 2008 but that was when the
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world was going to hell in a handbasket. haidi: let's take a look at the top corporate stories. >> there could be a change of fortunes for airbus. byy've said to agreed to three superjumbo us. a formal announcement is expected later this month. amid a larger strategic rebound for ana. i ninth fatality has been confirmed involving honda airbags. the carmaker said it is in contact with the driver's family. airbagsntially lethal have prompted the biggest auto recall in history.
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tesla hit its target but only just barely. it had originally aimed for 55,000 deliveries of revised that estimate in november. the company ramped up production on a shared assembly line. haidi: planning aainment is half-million dollar investment in a sydney hotel. paul: the casino war in sydney is heating up. in 2013icked off back when crown was first awarded its casino license. that was just the second casino license awarded.
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effectively breaking the monopoly that star had. now star is planning a hotel development. 200 meters high and $500 million worth. it is connected by the ritz-carlton. the market has become more attractive due to the increase in chinese tourism. star has an investment plan time to over the next four years. that timing is no coincidence. a lot of new development happening in this harbor.
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an interesting few years brewing on the casino scene. haidi: let's hope they can get those highrollers to come in. we dare to ask is the worst over for commodities. ♪
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haidi: south korea believes that the north may be preparing a nuclear weapons test. just days after he promised to produce and improve relations with soul. kim also said north korea remains ready for anything. opened theolice have
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missing persons investigation into the disappearance of a bookstore owner. protests were held on the weekend about his disappearance. it offers material critical of china's communist party. he is the fifth person linked to the shop to disappear. that he is wife insisting in an investigation. traffic in india's capital face a major test. millions of people are returning to work after the new year holiday. new traffic restrictions are in effect in new delhi. it is an effort to reduce smog in the world's most polluted city. taken that crown despite china's well-publicized smog problem.
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haidi: for thes over tokyo now first trading day of the new year. the traditional ceremony is underway. of the first markets recover from that third quarter rout. the index put on 10% for the year. head of the tokyo stock exchange is standing on stage as part of this opening ceremony. trading in tokyo begins in about 10 minutes. we will get the first indication is looking. futures have moved into the green in the last two minutes. let's look at commodities markets. oil had a huge two-year loss.
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expects commodity prices to stabilize. dominic: i think everybody agrees that at some stage the commodity prices will stabilize. when you think about production costs, that is clearly not sustainable. you can stillun see prices drop another 10% or so. they are oversupplied. half, we do see a changing environment especially on the energy side. rebalance is it think we will see a nice recovery on the oil side. haidi: crude wti is rising because of
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the tension in the middle east. dominic: that may only last for a week or so. unless it sparks award. look atwill continue to the inventory numbers and in the u.s. we had crude inventories rising to 490 million barrels. prices -- for loyal lower oil prices is still there. the surplus we have seen an oil is expected to shrink especially in the first half. we are still in a surplus. inventories continue to build. that can bring prices under new pressure. branch may be trading close to $30 a barrel. u.s. production has started to
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decline. once you see that happening the market will stabilize and is the market tightens up toward the end of the year you will see a rally. haidi: the santa claus rally has been going great guns. dominic: we have already seen a substantial supply growth where prices are trading right now we will still get there. i would not be surprised if prices continue to drop. we still have the challenges with regard to china. the housing market has an oversupply issue. on the housing side it is actually a negative territory. the pressure is still for lower prices.
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one of the key factors for commodities falling was the global growth was actually decelerating. in that kind of environment commodities tend to perform poorly. if we don't see an acceleration that everybody is expecting, that will be very tough for commodities. really wants to keep the market oversupplied and it probably can do it. on the upside, we have seen oil prices come down quite a bit. the outlook is for an acceleration in growth. 0.5 that wouldnd be a good case for commodities. clear.e not yet haidi: c's intentions.
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dominic: we saw the big divide in opec which is why prices came down so sharply. there is no unity at all. iran isnals that once able to come back to the global 0.6 million barrels is what we're looking at. that will spark even more downside risk. unity is far from being achieved in opec. the legal risks just make it worse. haidi: chinassage coming out of is causing a spike in copper prices. the desire to consolidate industry. will that lift the commodities markets?
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dominic: the bigger story is that you still have too much capacity. the demand is still lacking. the supply-side can handle mental demand growth of around 2%. as long as we don't see a big pickup almost all of the base metals will remain under pressure but securely copper. we are looking for a surplus in copper. people should stay away from copper. haidi: thank you very much. setting new targets as the bank revises its forecast for the quarter. all the details coming up. ♪
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haidi: let's cross over to tokyo. is traditional ceremony going on at to the tokyo stock exchange. one of the first markets recover debacle.third quarter we just heard from the head of the tokyo stock exchange. just waiting for that opening bell. singapore futures showing eight downturn. welcome to the stock exchange. our intrepid reporters are here
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to tell us what stocks are going to be making headlines. roz: that company is the second-biggest life insurer. that is how the company did, up nearly 13%. it said it didn't revises forecast. a little bit concerned about market volatility. the federal reserve is raising rates. we can look ahead to its neck announcement in february. it may raise the forecast at that point. david: i had a fantastic run last year.
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the death rate in japan will have a big impact on the insurance market. convenience store chain in the metropolitan area. spike was on news that its capital line was tied in. the twofor from companies that they're probably pushing back this alliance. cutting their full-year forecast and they're not expecting a loss. juliet: over the last couple of months this company has not done very well. talking about toshiba. we actually saw toshiba have a massive spike on a report that the medical unit may be up for sale. hitachi is believed to be making
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a bid for it. we will see that upside
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haidi: you are looking at live pictures out of tokyo where the first trading day of the new year is being marked with a traditional ceremony. in thekei 225 ended positive, its highest year-end close in two decades. let's take a look at trading. we are looking at the nikkei down by over 1% in the few -- in the first few minutes. you are watching "first up." oil surges as saudi arabia cuts ties with iran. crude rises for a second day
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crisis. financial the yen is strengthening on tensions in the middle east. the aussie and the kiwi are weaker. a two speed economy in china. ," live in "first up ong kong and live bloomberg.com. i am filling in for angie lau. breaking news out of singapore, the latest gdp numbers. our southeast asia correspondent is here. haslinda: it is a beat. here are the numbers. 2%. the estimate was 1.2 percent. the quarter before, it was 1.9. for the year, 2.1 percent growth in line with the government's estimate. growth boosted by construction, manufacturing, contracted just to qualify here.
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the final report will come in february. we are seeing a roller coaster ride. as you know, singapore is vulnerable to swings in global trade. trade, by the way, 300% of gdp. it has been hit by john -- china's economic slowdown. it has been hit i uneven global recovery. it is a highly export oriented economy. take a look at how it has been. eight months of decline for exports, as retail sales have time.almost through that singapore has tried to transition to a broader based economy. it has tried to boost services, tapping its position as an asian financial hub. it will be a tough year ahead. one economist says, 2016 is the .ear of tentative stabilization singapore's manufacturing will likely be disaggregated, but it will let slip into a recession,
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which it is skate -- escaped. the challenges remain. to 2016.g start trading starts at 9:00 a.m. local time. haidi: a sobering start indeed for the singapore economy. haslinda amin in singapore. it is the first trading day of the new year. david is tracking the opening in japan. not an auspicious start despite the opening ceremony. david: quite a start. let's put 2015 behind us. it was not for -- not good for asian equities. enough has been said. here is what we are looking at now. these are the opening numbers, to markets just opened at the moment. some of the biggest discounts, in fact, between valuations right now, i'm looking at
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five-year averages. with the exception of mainland markets, trading at discounts fairly wide discounts across every single market in asia at the moment. we have had, apart from, the singapore data, we also had ones,s, fairly important the china pmi, we will talk more about that in moment. sharper drop in south korean exports. 21% drop in macau. today, a few things to watch out for. inflation out of thailand, the last market to open. india and hong kong. then retail sales. where these at indices are at the moment. nikkei, topics, and the korealian asx 200, south opens an hour late. here is what they are doing. half of 1%. declines across japanese bench
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markets. nikkei 225ve been ending 2016 at 22,500, which would be under 20% from levels at the moment, under 19,000 right now. you have midyear elections in japan, which will be a vote of confidence. topix index, 1800 is the forecast. 25% from where we sit at the moment. story,i go, the other carrying off, oil prices. a quick check there, 3794. we see gains here at the start of the year. one of the early risks, looking at the tensions between iran and saudi arabia. he don't see eye to eye on a lot of things. that is adding to nervousness for investors at the very least. i will leave it there for now. back to you. david.thanks, checking in on the other
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headlines, breaking news, south korea says it wants to boost growth to 3% this year. maintain flexible policies. a statement from the president says the government will frontload spending to prevent a decline in consumption. it will push through labor reforms. need tosays rates may be raised further to prevent a market bubble. more hikes would be appropriate if financial markets start to oversee -- overheat. they will try to prevent it bubble -- a bubble. janet yellen says the pace of future ratings will be gradual. it ishas confirmed stepping up the challenge do u.s. maritime dominance in asia by building a second aircraft carrier using domestic materials and expertise. beijing's first carrier was commissioned in 2012.
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the defense ministry says the new vessel is under construction at the northern port. this is the first time this project has been officially confirmed. it is the first day of the trading year, but it seems not much has changed when it comes to china. new figures confirm, the two services gaining strength, manufacturing weakening. stephen engle joins us. it is a new year. are we filled with optimism that china will turn things around? -- isn: there it optimism. it is stabilized at the bottom there. five months in a row of contraction. let's bring up the chart. we can see the many fracturing pmi tells the story. there was a bit of a stimulus, there we go. 49.7 is the official many fracturing pmi. this one was a few years low, 49.6. 49.7.ch above that at
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still, below 50 means pessimism in the manufacturing. some would call it contraction, as well. five straight months in a row. what we may want to look at more heavily, flip-flop this and look at services. services, nonmanufacturing pmi did include banking, telecoms, real estate, that is taking up greater proportions of the economy. that is what the government wants to do. rebalancing is happening. look at that. 54.4, better than expected in december. perhaps in the coming months him we will bel be -- looking at pmi services before we look at manufacturing. this is the new economy. this is what china wants to latch onto. haidi: the new normal way of thinking. we know the private gains diverge from the official gauge. we are getting that. stephen: this is the official pmi.
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, mostly ather survey private sector manufacturer or services competing for pmi, than they have a composite pmi. it rose to a six-month high in november. it is still in contraction. there is a lot of pessimism for the smaller manufacturers, that they don't get the necessary lines of credit. haidi: and the interest rate aren't helping out. same old story when it comes to china. happy new year. on china.gle next, find out why our next guest says japan is what he calls a happy depression. that is just ahead on "first up." ♪ ♪
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haidi: checking the stories
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making headlines around the world, tension escalating rapidly between saudi arabia and iran over anger at the execution of a dominant cleric. protests took place in the gulf while the saudi embassy was set on fire in iran. saudi arabia cut relations with iran. faceh say they will repercussions for the death of the cleric, who had criticized the saudi regime. he invoked what he calls the divine hand of revenge. reported at an indian air force base near the pakistani border. at least 11 people have been killed in clashes with gunmen. seven troops have died. forming militants as well, while two others are on the loose. the attack comes a week after the prime minister held a surprise talk. pakistan denounced the raid, saying it is committed to working with india to fight terrorism. saw theeastern china new year through a blanket of
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smoke. air quality readings in china's major cities, eight times the accepted level over the weekend. a change in the weather is expected to improve things. in orangeaised pollution alert, the second highest as levels hit 480. shanghai is reportedly to be in moderate pollution levels today. i quick check of the markets, trading in the asia pacific low volumes as we get back from holiday. nikkei 225 down about 1%. earlier, lows in the session. the asx of my 7/10 of a percent. we had nine straight sessions of gains. we lost momentum on new year's eve, but we are back in the money today. south korea is opening an hour later today and there is no trading in new zealand. they are enjoying the new year's holiday. all right, shaping up to be
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potentially another challenging year for asian economies. let's bring in mark matthews. he is the heady of -- the head of asia research. a few months ago, we talked about potentially another asian financial crisis, or something worse. do you think we have managed to sidestep that? mark: i never saw that coming, but i do think that the renren be was a thing that upset the other agents last year, because that was what caused the asian crisis in 1997, the devaluation two years before that, december of 1993. i think now that we can see in context of what has happened it'saugust until today, decline will be very orderly and small compared to what it was in 1993. i don't think there is an asian crisis, absolutely not. a casedo you think it is of failing to live up to potential? i don't think anyone would have
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projected that indonesia would miss gdp forecasts. mark: all over the world, i think one of the great disappointments was emerging markets. they had it much worse in places like brazil, argentina last year. i think that by the end of this year, we will look back and be surprised by the opportunities that were presented in emerging markets, in 2016. right now, we are going into the new year thinking, they are terrible. but usually, that is the time we want to buy. haidi: we are starting up a new year, with another pmi from china. what better way? it's the same old story. it is a rebalancing? or a managed slowdown? mark: any economy goes three stage when they move away from stuff toop -- making using it. that is what happened in china. i do think that is a major misunderstanding among several towards china that explain its
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cheapness. i think a lot of people don't understand that this is a service sector economy primarily now. it is being driven by companies like j.d..com and alibaba, not being driven by petro china or new 100 storyf a skyscraper. you can see that in all the numbers coming out of china. service sector is driving the economy, it is the biggest part of the economy. that transition has actually already happened. i think a lot of people don't realize it. haidi: when you think of the service economy, when you think about the new economy that jean peng is trying to push forward tothat xi jinping is trying push forward, it is alibaba, and those companies. it has yet to trickle through. mark: if you drive across the border to shenzhen, there are thousands of names. there is a disconnect the tween the rest of the world and china -- between the rest of the world and china, because the
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gates are closed. but there are investment opportunities and technology in china, they are not listed in hong kong or shanghai area those are mostly in shenzhen. they are interesting. the investment opportunities? health, biotech has been hot going into 2016. , orthere other areas geographically, areas you are keen on? with china, as a value investor, i can't ignore the value in hong kong. im glad i don't live here, because if i did, the old expression, you are too close to, what is it? trees to see the forest. i would see all the problems, which i'm sure everybody wakes up every day and reads the paper. you know, i me, as live in singapore. singapore and malaysia have , have a fairly bad relationship. they are like a divorced couple squabbling. because of theg,
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political problems, the hong kong perception towards china has changed. hong kong is still that port of china.f capital into just as singapore always had nothing good to say about malaysia, and that hurt malaysia, hong kong people are not being very nice in terms of what they say about china. i think it hurts the perception about china in general. but when i look at some of these , the macau gaming stocks, over 50% discount of an av. there is this perception the nobody is ever going to, you shop in causeway bay, or gamble in macau, and i think that is an opportunity. i think that is wrong. haidi: you live in singapore. that gives you a good perspective and into the region. singapore has been exposed to the slowdown, as has a lot of other economies in the region. governance issues, political issues. mark: i am too close to the trees there.
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i don't like it. but there is certainly lots of value in singapore. i think the major thing that will help emerging markets this year as the dollar will not go up. the euro and the yen will do , and thatn the dollar will affect emerging markets. indonesia,e a me -- i think it will be interesting. what i like now, and it is not stocks, it is in the bond market. i like select emerging. -- select emerging-market dollar bonds. over 10% yield. i think we will see through this year, the news improve on emerging markets. haidi: let's end on a positive note there. and happy new year, and thanks for coming here, mark matthews. let's get you some breaking news from the bloomberg terminal. crossing the terminal, raising 9.3% in tokyo. up as much as 11% in the early sessions. that is the biggest gain since
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november of last year. reports suggest japanese automakers have said they could provide support to takata to safeguard technology amid the scandal that has engulfed the airbag maker. they are off 13% now. let's took a -- let's take a look, a i-12 .5% in early tokyo trading. one of the big movers. next, vietnam has central bank setting the daily reference rate. that is after the break. ♪
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>> i am david inglis in hong kong. it is monday, the fourth of january. these are your headlines. a bit of bad news, let's get it on the way. economic reports of the new year were fairly disappointing. exports and south korea fell
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close to 14% in december. that is capping a horrible year for south korean exports. 12 straight months of decline. manufacturing pmi in china came 49.7.nuary 1, below 50 for a fifth straight month, including pessimists in the numbers. the bright spot, pmi ending the year at the highest level since august of 2014. over to vietnam, the central bank announced key reforms in the exchange rate mechanism. they plan on setting a daily reference rate for dollars dong trading. , itrate will be based stopped short of saying when the policy will take effect. it is prepared to intervene and prop up the dong to stabilize money markets. in other words, it is ready to
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sell. more good news out of singapore, the economy did better than expected in the fourth quarter, helping the government achieve its 2015 target of close to 2%. it expanded by 2% in the last few months of a 15. a 5.7% cliff, seasonably adjusted. keep in mind, this is in singapore. .ends to be more volatile the environment is extreme. the fairly massive port city. not a lot of movement in the fx market at the moment. ,e are seeing the dollar index will 2016 bb year -- be the year of the u.s. dollar? apart from the swiss franc, the dollar gained against every major currency in 2015. the franc was up. let's hope not.
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dollar-yen, at the moment, you have, we are seeing across markets, what are we doing? down 9/10 of 1%. analysts expect the japanese markets, which by the way, was ending 2015 higher, to perform better in 2016. not down to dollar-yen, but analysts that goldman said, look at corporate tax cuts. more reforms in the corporate sector. perhaps boosting the appeal of equities. we are seeing strength for dollar-yen. we seeing pressure on japanese equities. 22,500 is the target level for nikkei 225. aussie dollar, 72.90. not a lot. quite boring. down about a fifth of 1%. south korea, some weakness there.
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a third of 1% weakness. 1178, exports were off. we talked about that. 14% drop in december. every month last year, of course, loss of mathematics will dictate perhaps we will see better reads coming from a low base. watch this space. the euro, will we see this trend towards parity? common currency. those are the stories driving your ethics market. thank you, david. let's check on the headlines. macau's gaming revenue fallen -- falling to its lowest in five years. dwindling highrollers. down nearly 35% last year, analysts to not see any improvement before 2017. macau pass casinos lost $45
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billion in market value last year. they cracked down on corruption. hit its salesto target. it shipped over 70,000 cars in the fourth quarter. forad originally aimed 55,000 deliveries in 2015, but revised estimates in november. they ramped up production to make two models on a shared assembly line. the force remains strong with the latest "star wars" movie. the film is in front in north america for a third straight weekend. the force awakened has generated more than $740 million in domestic sales so far. globally, disney says it has cracked $1.5 billion and it has yet to hit screens in china. the movie opens in the world second-largest market next weekend.
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for the first time in 26 years, foreign investors sold japanese stock and missed out on the rally. we will have more on that after this short break. ♪ . . . the only way to get better is to challenge yourself,
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and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, 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. to discover the best shows friends together and movies with xfinity's winter watchlist. later on, we'll conspire ♪ ♪ as we dream by the fire ♪ a beautiful sight, we're happy tonight ♪ ♪ watching in a winter watchlist land, ♪
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♪ watching in a winter watchlist land! ♪ xfinity's winter watchlist. watch now with xfinity on demand- your home for the best entertainment this holiday season. haidi: it is 8:30 a.m. in singapore. we are 30 minutes away from the opening of trade there. you are watching "first up." ♪ haidi: asian stocks have fallen at the start of a new trading year as tensions in the middle east are weighing on risk appetite. markets slowly get back to work after the christmas holidays. saudi arabia cut ties with iran,
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escalating tensions over the execution of a prominent shiite clerk -- cleric. are the first and fifth ranked producers of oil in opec. the official manufacturing pmi weakening in china for the fifth straight month. the longest streak since 2009. on the upside, nonmanufacturing pmi ending at its highest level since august of 2014. are getting underway here in the asia-pacific. we have the nikkei down by about .8%. futures pointing to a higher open. having said that, aussie shares have regained momentum.
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a santa claus rally before losing that streak on new year's eve. they are trading in new zealand. south korea opening an hour later today for the first trading day of the year. for the first time in 25 years, foreign investors have been wrongfooted when it comes to japanese equities. bit of a case of just missing out on the japanese equity rally. decadesirst time in 2.5 . what goldman sachs tokyo is calling a bad idea. is reduced across the board. coming through in chinese equities. really offloaded for the first time since 1989. 22% in yenn the rose terms.
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traders certainly dumping out of japanese equities. this is important. overseas investors account for two thirds of the traders in japan. still good news for japanese equities. the reason is that they have of -- ccessful debut we also saw central banks, asset managers, and japan pension funds buying into their own market. that offset what we saw with the foreign outflow. they do appear to have missed the boat here on a fourth consecutive rise in japanese equities. haidi: a lot of institutional money going into that market. we love numbers here. juliette: a lot to digest here. a fourth year of gains. japanese shares outperformed the world. worlds the msci developed
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index. in u.s. dollar terms, down by about .5%. topix rising by 10%. we also saw a rise in the shanghai composite. if you have a look at how the s&p 500 did in the u.s., it was down by .7% over the year. japanese equities have been doing very well, playing into that a,benomics. abenomics.t, goldman sachs tokyo and a number of analysts saying that japanese shares are not expensive. perhaps the bulls will be back in 2016 will be another great year for japanese equities. haidi: do not sell out this time. thank you for that.
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let's take a look at commodities. oil surging by the most in almost a week in new york after saudi arabia announced it was cutting to the medic relations with iran. -- diplomatic relations with iran. .et's get the details from ben is this a knee-jerk reaction? en: it is the middle east, saudi arabia, the world's biggest crude exporter. a knee-jerk reaction? possibly. you have also got to think about where it has come from. wasas not long ago that wti at a six-year low. they are starting at a low base. any reaction like this, any tension in the middle east, is going to cause the price to rise. fundamentals have not
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changed. where do we go from here? you have to take a look at the overall picture here. 62% the pastallen two years. it is the supply situation. makers producing well russia producing a post-soviet record. u.s. production is high. keep an eye on the fundamental situation. this bounce might just be a knee-jerk reaction. ben covering that spat, the tensions between saudi arabia and iran. time for a look at some stories on the bloomberg terminal. confirmed a ninth
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fatality linked to faulty airbags from takata. the accident came in pittsburgh in july. the carmaker has been in contact with the driver's family. they prompted the biggest product recall in honda history. are expectinga their weakest sales growth in 10 years. they forecasted the delivery of ..1 million vehicles this year they missed their target in 2015 for the first time in seven years because of a slump in demand from china. 2016 may bring a change of fortunes for airbus. it has not won any new customers is said years, but ana to buy three jumbos. a formal announcement is expected later this month as part of a strategic rebound for ana.
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those other top stories. haidi: star entertainment is said to be planning a development on the site of its sydney casino as rival crown continues to work on its development. let's get to paul for the latest. this is really heating up when it comes to the casino wars down under. paul: the temperature is definitely rising and has been since 2013. that is when crown got a gaming license to open a casino here in new south wales. that was going to and -- end star's monopoly. star has a few years left to make the most of it. they are building a new hotel complex on the site of the current casino. andill be 200 meters high it will have 360 rooms. , itrding to local media
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will be operated by the ritz-carlton. a spokesperson has confirmed that they are in talks with the ritz-carlton. that hotel chain is looking to reenter the market as chinese tourism increases. $1 billiont ofstar's development plan over the next few years. the timing is no coincidence. directly across the harbor is going to be the house that james peckham built and an impressive one indeed. it will be a six-star hotel. it will have highroller gaming rooms and that is due for completion in 2019. the face of the casino market in sydney is changing. by the end of the decade, it will be a very different place. allen.many thanks, paul we will see how quickly they can
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export the gaming tables. will this be the year that virtual reality is finally going mainstream? there are three mainstream companies -- three leading companies and it is now or never. you have been speaking to sony about what they are planning. what can we expect? >> the challenge for sony is that virtual reality is something that is best experienced directly. it is not easy to advertise on tv or print media. they are preparing a of demos that will show what the vr enthusiasts show presents -- presence. traditional movies and books can transport you to a new place, but not the way vr does because vr covers your eyes. it also mimics your sense of
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balance. sony has will him at that. examples include a bank robbery or the ability to join a massive arena while writing a robot suit. these expenses are not limited only to games. haidi: as you said, this could be a big year. there are many challenges. take us through some. juliette: -- pavel: sure. one of the biggest dangers of vr is people feeling sick during the experience. the physical technology is quite there. the screens are very clear. you feel that the world responds the way you move your head. some of the challenges might be with the way information is presented. this is up to the developers, the way that they express experiences in software. some of the tricks that they can
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use, they will put you inside a cockpit. by framing your field of view, it makes it easier for people to orient themselves. haidi: there is also an assortment of product offerings that we are expecting. oculus, htc coming out with their products. what is distinguishing these different offerings? perhaps the first difference is the price. we do not actually know what each of the headsets will cost, but there are some guesses. sony has said that there's will cost about as much as a console, which is, at this point, ps4, around $300. the advantage of that is that you do not have to buy a computer. it is probably the most user-friendly. oculus rift, owned by facebook,
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developer kits sell for just under $300 right now. it might be for people who are interested in more social experiences. is more likely to be the more expensive, higher-end headset. that will cater to pc gamers who have fairly powerful machines at home that are capable of handling vr and will come out in the first half of this year. haidi: the future is now. hopefully none of those end up making people feel sick. pavel joining us from tokyo, talking virtual reality. up next, one candidate is looking to rock this month's election. more on that story after the break. ♪
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haidi: let's get you some
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breaking news. 19%,a shares surging up to hitting the daily limit in tokyo after reports that it could be receiving a to keep its technology intact. we will keep an eye on that as the trading session goes on. some headlines around the world now. south korea thinks that the north may be preparing a nuclear weapons test days after kim jong-un promised improved ties with salt -- seoul. after saying that they should not include the u.s. in any talks. after adopting the conciliatory tone, he also said that north korea remains prepared for war. intests were held this week over the disappearance of a major shareholder of the hk
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bookshop.he is the fifth person linked to the shop which has disappeared in the few weeks. he told his wife by phone that he was assisting in an investigation and does not know when he will be back. traffic restrictions in india's capital faced a major test today as millions of people return to work after the new year holiday. vehicles will only be allowed between 8:00 a.m. and 8:00 p.m. with odd numbers and even-numbered vehicles will have their chance tomorrow. most now the world's polluted city. delhi taking that crown just recently despite china's well-publicized smog numbers. here they are. ♪
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haidi: the front runner in taiwan's presidential election
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has promised a more accountable government if she wins later this month. she says taiwan voters want change and the ruling administration is not listening. she pledged to improve government transparency at a debate this weekend. tsai is on course to win in jet -- on jenna were 16th despite warnings from china that ties between the two countries could -- apse if they rejected stephen engle met another candidate who is literally rocking the establishment. stephen: it is perhaps best described as folk metal. occupied by japan, at war with china, musically, the angst of
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today. freddy lim is not only the front of this metal band, he is also on the political stage. ♪ >> taiwan, as a country, is different from china. more than 80% of the time -- of the taiwanese feel this. they want to stay somehow to protect our freedom, our , but slowly monetize our base. stephen: you know china would never allow independents. do you think conflict is inevitable if you go on this path? >> maybe, but every democracy has had difficulties. stephen: he actually grew up pro unification with china but grew disillusioned by a widening inequality gap.
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he is now a powerful candidate. >> it is the biggest disaster, actually. they do not want to listen to people. >> young people are having more of a voice. a lot of taiwanese grew up under japanese rule. my generation grew up taiwanese. we grew up with a democratic society. should -- this candidate says he gets the message. >> we should do some reform. stephen: it might be too late. >> they say, you are not so handsome as tom cruise. , say, how about tom hanks forest gump -- forrest gump? no matter what the result, just run.
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stephen: that is exactly what freddy lim is doing. the millennials and heavy metal fans of taiwan are on his side. find out why support from a state-backed fund could be making toshiba one of today's big movers. that is next after this short break. ♪
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let's have a quick check of the markets that are trading around the region. very low volumes as we get back from the holidays slowly but surely. in tokyo, the nikkei is down by .7%. up the daily limit, 19%. the asx 200 is trading a little higher, coming off those intraday highs.
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singapore starting trading in just over 15 minutes. let's take a look at our futures, pointing to the upside. .2% after gdp was a beat. 2% growth year on year compared to the previous 1.8%. ♪ welcome to the stock exchange. let's check in on what our reporters are watching this morning. trading is underway in asia. we need to talk about life insurance. second-biggest insurer has done well with these acquisitions today. a bit meh. i'm sorry about that. >> great move. its forecastrevise for the year.
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so far, it has reached its target, more than 80% of its target for the full year. looking positive the rest of the year. >> solid growth story there. >> it just keeps moving. >> lowest level since 1997 for three f. delaying a capital alliance with lawson. it is also forecasting a loss. i think that is going to do it. excuse me. making me the most amount of money today, up by almost 2%. reports that a state-backed fund might come to the aid of toshiba. quite a few reports that it could be selling one of its -- which had to
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achieve a rising on the last trading day of 2015. among the companies that might be bidding for its health unit. david: more explicit than that. haidi: exactly. that is the stock exchange. ♪ business"ending coming up next. >> what is 2016 going to bring. do we see any recovery coming out of china? we are also looking at the broader picture. they had start for the year
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ahead. we have plans by mr. zuckerberg. haidi: intriguing. we had virtual reality and now artificial intelligence. that is it for "first up." ♪
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♪ rishaad: a very happy 2016. it is the fourth of january. i am rishaad salamat and this is "trending business." ♪ rishaad: we are going to be visiting singapore and tokyo this hour. oil rising a second day as saudi arabia cuts ties with iran. the yen is near its lowest level since october. the first gauges of the new year concerning the rebalancing story in china. manufacturing slowed

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