tv Trending Business Bloomberg January 3, 2016 8:00pm-10:01pm EST
♪ 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 again, but
services are ever stronger. and from virtual to reality. will 2016 be the year that vr makes the breakthrough and goes mainstream? htc are all, and betting on it. g, not forget the hashta "trending business." justpore, taiwan, malaysia coming online. south korea as well. just about an hour later than usual. let me start things off with breaking news out of vietnam. we heard from the central bank that was planning to set the daily reference rate. at the moment, it seems like they have come with that promise and they have basically weakened the dollar right now. to the dollar.
not a big difference compared to the previous one. still a more market-based reference rate. it is allowed to trade within 3% above that daily rate. markets open in just over an hour's time. that is how markets look. we are waiting for south korea to get up and running. we are seeing a mixed bag. yen is slightly higher against the u.s. dollar. japan is fairly broad-based. not one stock is moving the market. pick oned had to market that was the favorite in 2016, japan would be among that list. 225 target level, just under 20% from where we are at the moment. trading volumes are very light. 50% lighter than
the 30-day average in australia. that will likely be the case during the course of today despite a fair amount of data. we're going to talk about pmi in just a moment in china. singapore gdp just came out. very good. you have inflation out of thailand and you have retail sales here in hong kong. before i go, can we get shares of takata? better than that. that is the most in nine years. a report suggests that japanese automakers are considering backing their airbag supplier, which will help cushion the impact. certainly something that is not going to come cheap. oil up for a second session. it is the worst rout between iran and saudi arabia in years.
>> saudi arabia has cut ties iraniran after a deputy in was attacked on saturday. it has given saudi arabia 48 hours to leave. they were protesting saudi arabia's execution of a prominent shiite cleric. the worth -- the worst crisis between the two powers since the 1980's. 7.94.st check, oil was $3 that is a little lower than it was earlier in the day. prices have been coming down a little bit. saudi arabia is the world's biggest crude exporter and iran is the fifth biggest. big players in the world of crude. any tensions between them are likely to affect prices. prices are also at multiyear lows. therefore, any tensions, any movement in the middle east will
affect the price as well. market watchers are saying that this looks like a short-term spike and the fundamentals have not generally changed. there is still resilience in u.s. output and a lot supply coming out from opec members. we will seely that more rising in the long term for now. back to you. rishaad: we will have a more detailed look at that story through the course of the show. we want your opinion. give us your thoughts. as well.hat hashtag first trading day of the new year. figures concern the economy, still running at these two speeds. manufacturing weakening while services are gaining strength. has the latest, confirming the trend we have been seeing for the last six months. stephen: pessimism again outweighing optimism on the
chinese factory floors for a fifth month in a row. the official manufacturing pmi came in below 50 again. that is 49.7. this is the longest streak below 50 for the official pmi since the global financial crisis of 2009. a little bit better than november 3-year low of 49.6, but still in contraction nevertheless. the 12-month average for all of 2015 also falling into contraction at 49.9. far below the four-year average over the last five years of 50.7. as you said, confirming what we have known and what we are seeing over the last five months , that optimism is waning on the factory floor in china. six interest rate cuts in the last year, targeted stimulus as well. they have not necessarily stoped growth in the old drivers of the economy, manufacturing. if you wanted one positive
takeaway, it looks like the situation has stabilized a bit. we will get another reading of manufacturing later this hour at 9:45 hong kong time. this survey is mostly smaller, private sector manufacturers. traditionally more bearish than the official pmi. that survey rose to a six-month high in november but is still expected to remain in contraction the last month of december. the main bright spot of the economy has been on the nonmanufacturing side. in december pmi rose to its highest level since august of 2014. 54.4, well in positive territory, if you want to call it that. optimism definitely outweighing pessimism. that plays well with what the rebalancing efforts the government is trying to do, and that is buildup services like telecom and banking as bigger parts of the economy than simply being the manufacturers to the world. rishaad: i am going to look at
some of the other stories we are covering today. let's take you to ju juliette.iette: -- to juliette: rose an annualized -- up from a revised 1.7% expansion in the fourth quarter. that was a strong beat from 1% expansion in the last three months of 2015. over the year, we saw the singapore economy rise by 2.1%. the country's services and construction industries divided support of faltering exports. industrial production fell for a 10th straight month in november. group 6.5%s industry in the same period. construction expanded 7%. switching gears, so to speak.
hyundai and kia are expecting their weakest sales growth in 10 years. south korea's largest carmakers have forecasted combined sales of 8.1 million vehicles this year. that compares with 8 million last year. the automakers missed their target in 2015 for the first time in seven years because of a slump in demand from china. has also dented profits as well as unfavorable exchange rates in russia and brazil. hyundai has funneled its luxury genesis sedan into a standalone premium brand to salvage its reputation amid sagging sales. kia brito -- begins production at its mexico plant in 2016 to help boost sales in the region. some bad news for more homeowners in sydney. house prices have fallen for a second consecutive month. they recorded their worst quarter in four years after home values dropped 1.2% in december.
that followed a 1.4% decline in november. it is the first time since may of 2013 that city home prices have dropped four two straight months. it is australia's worst performer in terms of groups in the property market. it is another sign of cooling after prices soared 44% in the three years to november. no one is predicting a bus. population growth remains strong. economic conditions are healthy. property rates having a moderate decline and could face further moderate declines, but it is unlikely that there will be a material drop in value. website, we are looking at why china is telling its professors to go back into the classroom. is at bloomberg.com. up next, casinos.
rishaad: you are back with "trending business." a look at what is going on with the markets and the prospects for the coming year. we have the director of strategy at a 60 seat -- at hsbc private bank. >> i think it is going to be a good year when it comes to assets, but our overriding message is one of -- there is going to be global disinflation and bond yields will be lower for longer. comes a bunchept
of ideas about what to do. the dividend yield strategy, looking for some carry when it comes to currencies. and also, we basically do see some opportunities, limited opportunities in certain, specific geographies when it comes to equities. a non-consensus call of 1.5% to the 10-year u.s. treasury yields. the end of the year really underscores that. the dollar thought would be strengthening more. it had not done that. then again, we got so bored of talking about the rates. everyone is going, when is the next rate hike? benjamin: exactly. the rumor, sell the fact. that is what the last four occasions have told us. once we get the monetary tightening beginning, the
initial three-month reaction is for the dollar to the client. we think that is underway as we speak. a lot of the buying of the dollar in anticipation of this move is over and done with. but later this year? benjamin: we don't think so. one of the assumptions that the market is making more broadly is that long-term bond yields will go up and attract money into the u.s. dollar. we are seeing the reverse. we are saying they are tightening against a backdrop of nonexistent inflation. that being the case, we do see a situation where long-term bond yields reflect inflation expectations. there are no expectations of inflation so long-term bond yields should go down and bring the dollar with them. rishaad: are you overweight equities? why? benjamin: once again, it is the long-talked about story of equity yields being above
prevailing government bond yields. the markets that we like, we like europe, switzerland, specifically. we like the h-share market. interestose markets, rates are either negative or monetary policy is likely to be eased further. opportunities are limited, but they are still there. rishaad: you are looking for traditional, fairly defensive stocks if you are looking for the yield. benjamin: we are. large cap, dividend-paying stocks. rishaad: not very brave. benjamin: sometimes it does not paid to be brave when it comes to investing. we are about to end of the eight year of a bull market. in chinesey number culture, as you know. i am not sure that gives us the green light to be particularly aggressive.
we are also looking, one of the most under-owned segments of the , in this asset classes type of environment, late in the bull market cycle am a very late in the credit market cycle. you want to look at alternative investments. not talking are about going to hedge funds -- benjamin: we are talking about a range of things. we do see some opportunities in the private equity space. particularly on the realty side of things. we think the easy money has been made in terms of the underlying assets themselves. the prospects have pulled back from lending as aggressively to commercial properties -- property developers and the like. there is an opportunity in the debt space when it comes to commercial property. long-short. equity the letter stage of the bull market, you typically get
outperformance and underperformance. we think they are well-positioned. rishaad: what about the likes of commodities, gold? has everything been beaten down or is this part of the trend? benjamin: commodities, in general, are going to struggle a bit further. i think momentum is against them. iron ore and oil have been on a very sharp downward trend. i am not sure that is going to reverse in a meaningful way anytime soon. gold is another story. gold has a very perfect inverse correlation to the performance of the dollar. if the dollar goes down, gold should find more friends in 2016. rishaad: warm weather in north america and europe up until now. does that have any bearing? it certainly did last year. benjamin: climactic conditions have an effect on slow commodity
prices and the like. conditions in europe. i saw pictures of no snow in austria and the like. on an economic note, if we do get a very mild winter in this u.s. -- i mean, it was 15 or 16 degrees celsius in new york on christmas day. rishaad: when i was there, it was approaching 18 and that was three days ago. case,in: if that is the that should, in theory, give us a better start to the year for u.s. growth. as you point out, in each of the last four or five years, there has been a drag and we have seen a correction in the second quarter with spending picked up to compensate for a soft first-quarter. i think it will be a reasonable year. the key assumption is bond yields are lower for longer and the equity and currency ideas. benjamin: -- rishaad: have a great year.
let's have a look at the stories making headlines around the world now. a shooting reported at an indian air force base in the border with pakistan. at least 11 people have been killed in clashes with unknown gunmen. weekttack coming just a after prime minister narendra modi held surprised talks with his counterpart in pakistan and committed tore fighting terrorism. a blanket of smog. air quality readings in beijing
were at least eight times internationally-accepted safe levels. change in the weather has made a dramatic difference today. they raised an orange pollution alert. shanghai is described as being unhealthy today. south korea thinks the north may be preparing a nuclear weapons test. said they should not do anything to harm negotiations and should not include the united hates in such talks while adopting a more conciliatory term. he also said that north korea remains ready for war. the front runner in taiwan's presidential election has thomas a more accountable government if she wins later this month. she says taiwan's voters want change because the current administration is not listening. tsai pledged to improve
government efficiency and transparency over the weekend in a debate. she is on course to win this election on the 16th of january despite warnings from china that ties could collapse if the new government rejects the one china framework. stephen engle met another candidate that is quite literally rocking the election. ♪ perhaps it is best-described as folk metal. occupied by japan, at war with angst ofe polarized today. freddy lim is not only the front man of this metal band, he is also a new voice on the , calling for an
independent taiwan. >> this is the taiwanese country. more than 80% taiwanese citizens. they want to stay somehow to protect our freedom, our normalize our -- stephen: you know china will never allow independents. do you think conflict with china is inevitable if you go on this path? >> maybe, but every democracy has many difficulties. andhen: he grew up pro kfp unification with china but grew disillusioned by a widening inequality gap. he is now gunning for the incumbent. >> it is the biggest disaster, actually.
>> young people are having more of a voice. the taiwanese grew up under japanese role -- rule. my generation grew up taiwanese. stephen: eric says he gets the message. >> we should do some reform. stephen: it may be too late. polls suggest a sweeping opposition victory. he invokes the mantra mission impossible. >> they say, you are not so handsome as tom cruise. i say, ok, how about tom hanks, forrest gump? no matter what the result, just run. stephen: that is exactly what he is doing, running with the expectation of winning. millennials and heavy metal
chinese defaults. year, it isntire coming in at 2.1%. confirming the economy in china is weakening. the longest streak since 2009. it ended at the highest level since 2014. we are talking about china and let's get to the open here. theet's get started with trading announcement. pendingeen suspended, acquisitions and have a look at what is happening. not the most exciting start. across the board, we are
what we are doing is 1300. that is 11% for an upside. here are some of the stocks that and help along the way the tope recommendations here with more shares down. up and therehings is china mobile. obviously, we expect the forecast lows and we move on here with the 20% drop in the i do not know what is
in store for the comparison. back to you. thanks. let's take a look at what is going on with oil. there is a surge and they will cut ties with iran. let's get more from bloomberg's news. we have seen how the geopolitical risk is not calculated. in this case, we have the biggest player. and it is the key saudi arabia and iran. of have the other thing where the prices have been and you had the 11 year low not that
they may start to come back again. >> let's take a look at david and this was an awful one. the current revenue dropped and .s going to continue this year .e is with me it looks bigger in las vegas. what are we talking about with what we have seen? >> it is a good news bad news downtion with the revenue for december and we got them down 21% and 27% for the quarter. the good news is that it is the smallest decline we have seen
and -- host: are you looking at it year on year? year on year. much easier. the other thing you mentioned was in white. you can see the cataclysmic drop that we have seen. look at the yellow line that is , even with it falling off of the cliff, it is larger bigger.mass market is the red line is a mass-market and a lot of chinese have bet on this. a percent of the gambling done and it has the .owest edge
we have people who look at this and say it is not that bad. last year, it was terrible. >> it is lower than it was. so, that is good. it is usually a positive month. thesis and thehe mass differentiation. resort ore a new leverage within the group, you have a fighting chance to we see thete and opportunity for operational
performance to be better. delayed a couple of times. >> hopefully, it will come through in june. we do not see this as a time for performance in an operational perspective. wayig changes are on the with top-level policy makers seeing a critical time for the region. we are looking at which of the central bank chiefs are heading for the exit. >> highly respected. to a white-hott
commodity boom and they will replace later in the year. it is highly respected and the term officially ends this year. he has not said whatever he >> a big name and a question around the future. looking for a sense. >> she has the official now. >> a big name. >> what does this mean for the policy? >> it is a critical juncture and they are diverting with the economists and around the region.
when it tightens, it is an unusual time to be looking at key personnel. and thents to hang on policy has been shaking significantly this year. it is a fragile time. host: thank you very much. we have to take a break. coming up, the rebounding in china. why this year might be the end of the beginning. more on that when trending business returns.
invoked a divine hand of revenge. millions returned to work after the new year's holiday. they will be on the roads between 8:00 a.m. and p.m. tomorrow. smog in the reduce city. a missing persons investigation into a shop owner. after thets were held disappearance of a major shareholder. he is the fifth person to disappear in the past weeks. thatld his wife by phone he did not know when he would be back.
host: getting back to markets, we are awaiting the open. before that, let's go to singapore. let's start off with the data coming out and your reaction. let's talk about the themes for the year ahead. it is chilling and the end of the beginning. churchill, winston the idea is that some of the big things we have been looking for are fairly progressed and there is no longer novelty to talk economy and we are talking about the monetary policy and we do not think it
centralanymore from the banks and we are at a directional turning point. host: what does that mean with investing in what you tell private client -- private clients? >> we should be looking for turning points through the year .nd it is related to china host: you are talking about isther contraction and it
seen with the official data that .here is bifurcation things are getting worse now. is a is below 50 and it well-established trend. it is down and you see the emerging economies with the .djustment it may get more stable and reflect the service sector above the 50 level. not a non-considerable length of time.
it goes up to the double-digit is notin the past and it stable because you have credit growth transitioning the domestic economy and there is a reasonable expansion with the credit bubble contains. that is probably the biggest challenge now. i think it is almost a rounding error. u.s. let's move to the the many arguing about normalization of monetary policy in place and a lifting of interest rates. will 2016 represent further for the economy.
-- the economy? >> the normalization has taken place and the interest rates are low. we have to expect them to trend towards normal. janet yellen has made the point and come byis loose the end of the year, they will beat 1% higher with a clear signal that it is going up over the coming months. i think the normalization process has begun and it is a fairly good thing with the economy progressing towards normalizing policies. final word on what you
think will be a big story. i think we do not see big ands in equity bond prices i think there could be a turning point in the dollar for the second half of the year. a leg upou will get and we are looking for a reversal over the next monetary year. maybe not a big reversal. it is pretty overvalued, compared to historical levels. host: great having you here. have a great one. a new year means new challenges. we will try you what the biggest goal is after this.
host: we have companies due to launch products and we are bringing in -- what is the game plan? >> the holy grail of virtual reality is something not present and it is a sense of being somewhere when you are not. traditional media gives you a sense of virtual reality. there has been a control of lineup of sony has a
demonstrations of the specific poundingom a heart bank robbery to being part of a sports robot. we spoke to the head of the studio's about that. you can put yourself where this is going. these withoutence leaving the comfort of your home. getting this from many different industries. quickly, this is far from a
perfect science. what are the challenges? >> users feeling uncomfortable or sick in the experience. the challenges are for the artist and the experience in a way that is compelling without being overwhelming. right. certainly, a subject that mark zuckerberg closed, let's have a look at it. >> this is a new year's new year'sand we had goals like losing weight. been readingrg has two books a month and learning mandarin. wants to create jarvis. host: like alfred in batman, but
mechanical. >> is turning on the lights and the music in his home and he wants to get it to a point where he can recognize that. been responding to public questions. we look at a quote on facebook. he says, i think this can work is artificial intelligence not a risk of rising up against us. someone read the magazine and said that he just made our new year's resolutions look silly. we have a look at one of these here and he says that he is spending on these without good evidence.
row over the execution of a shiite cleric. tackle whatres to critics say is not nearly enough. follow me on twitter. right, it is underway at the moment. declines across asian stocks have picked up in the last hours. more thailand for and india to come online. share the gates, a fair of economic data has been we will get you
now, can we get the shares of. 90% of with the deal. you cannot get much better than that. consideringrs are backing the investment in the data substantially on leverage. oil is moving strongly. pledging revenge for the death of a cleric. >> protesters protested against iran. they attacked on saturday. saudi arabia said that they had
and it is the lowest output with the new orders falling from the previous month. the factors and it is 48.2. read --he officials, it the reading inched higher and forcan see the contraction five consecutive months and it is the longest streak since 2009. this continued to be a contraction and this is the old driver having a hard time, despite all the stigma. fell in the contraction and
the interest rates were cut. have a positive takeaway, it looks like the situation has stabilized. the main bright spot for the economy has not been on the manufacturing side. ands the highest is 2014 wellumber is out and plays with the balancing efforts, building up the banking in the economy. growthe looking at the in the city. the economy expanded more than it expected.
rise in december is up from the revised expansion in the september quarter. predicted and,as over the year, the economy has risen. the construction industry industrial. the retail sales are rising. >> the affiliate is expecting the weakest sales growth in 10 years. yearombined sales this compare with 8 million vehicles last year and, for the first
time in seven years, it was a slump in demand in china. the prophets had unfavorable exchange rates in russia and brazil. and it helps boost sales in the region. the most populous city that has fallen and they reported the worst quarter in years after the home values in december going down a 1.4% decline. it is the first time since may that the home prices have dropped. is the worst drop
performer in the property market and it is another sign after the 44% through november. the good news is that no one is predicting a bump in the growth and they say they may see some moderate declines. .t is a material drop >> there are new games that could sway the staunchest step ticks. the health organization says the air situation in new delhi is the worst. which currencies could be the best and worst performers? that is coming up next.
they came out with views that are certainly very different than one another. and we areteresting look aton the dollar the three hikes of the fed and europe will look weak. is that shoulde supported.llar well host: let's take a look at the euro and the message the ecb has this year. we are looking at it in the longer term.
this will be the increasing focus of the u.k. markets and we think that there will be more downside risk. it should outperform the euro weight onhas to be a sterling with the increase in certainty as the referendum comes closer in the months ahead. that will weigh on the sterling and we will see headwinds in the fiscal contractions. we still see the sterling .ontinuing to weaken host: we are looking at the yen being flat. andwe looking at weakness part of the least resistance strengthening?
>> the reality is that it weakened and it has reached areas that were cheap. it has had an adverse impact in we have the adjustment of the policy and it has not weakened, gradually strengthening. we have been doing a piece on property prices in sydney. the fairlking about values for the aussie dollar and we went below that slightly. when it comes to currencies, it it isto overshoot and
much weaker than fair value. and the rbaight believes the aussie dollar is closer to the estimates of fair value. , we if we look forward continue to see the worsening in the terms of trade and we expect a depreciation and it could come under a a lot more pressure. so, i think the downside pressure continues to remain in place. is this a currency that the world is done with? andhere will be pressure commodity prices. weakness oneneral the rest of asia and the indian
we seeill outperform and most, if not all of the currency. it continues to forecast by the middle of 2016. host: thank you for joining us from singapore. >> stories making headlines around the world. at the base near pakistan. seven troopers have died and four militants have. pakistan denounced the raid and said they are committed to working with india. readings were at
least eight times over the international levels accepted over the weekend. hits 480. shanghai is reported to be moderately polluted today. preparing a weapons test. south should not do anything to harm the negotiations in these talks. tone,ore conciliatory they talked about more. for the shanghai market, down in the past few minutes and we have no
achiever with new year's resolutions. those? we do not know yet. create artificial intelligence. he is posting these on his facebook page and says that he wants the artificial intelligence robot to help him at work and at home. they take it in the office and he has responded to a number of people asking questions about that. there is concerns that artificial intelligence, like in those war movies -- host: stephen hawking talks
about this, as well as to there is a big fear that they will certainly -- rise against us. there is fear mongering. he has not bought into the concerns. on twitter, there was a lot of twitter about this and we were talking about the new year's resolution. kilos to lose five instead of losing the artificial -- inventing an artificial intelligence robot. another said that he should not money on these ideas without the concerns for evidence. another writer from yahoo! said is tryingzuckerberg to save humanity.
there may be riots against mark zuckerberg next year. that heerybody pro-dex would monitor his daughter from different parts of the house. he can do that now. goal and hehe new has been successful. hope they become the nerds at school and create intelligence robot. we will see if he is successful or if we are the ones laughing about this. all right. thank you for that. let's have a look at markets. we have shanghai, japan. there we go.
that is happening in the course of a few minutes. we're seeing what is going on in shanghai and we had the official aading and we are seeing private survey showing further weakness. meanwhile, service is doing nicely. traveling inikkei negative terrain. it is growing a little bit it is than expected and not really helping things with
japanese -- after a report the japanese carmaker may step in to maker.e embattled airbag takata products are linked with deaths around the world. china's latest factory reading coming in lower than expected. sign the chinese academy continues to run at two speeds. a lot of movement taking place, and nearly all of it in one direction. >> i thought markets were going to be quiet today. and then this happened. the shanghai composite, 3.2%.
-- if i remember .orrectly, 3435 that is the 100-day. level right now. red.d open in the and then we had some data out and one thing led to another. the damage across the markets -- it is much worse. caps china index, losses in the order of 4.5%. still unclear why we are seeing losses. who knows why markets begin to sell off?
elsewhere, negative data investors are reacting to. one of the first reports was this report in south korea, exports dropping for a 12 straight month. we may see a similar drop in exports for taiwan, also for december. if you base it on comments by the finance minister. to june.e way back red.00 now in the counters keeping the index from falling further. 3%.ung down up, a quickthings
overview of what is happening across asia. not the best start to the year. we are on track for the worst start of a trading year since 1998. volumes are low, turnovers across most except for china. activity has picked up in hong kong in the last 15 minutes or so. on that bright note, back to you. oil surging the most in almost a week. saudi arabia will cut diplomatic ties with iran. our inergy reporter is here now energy reporter is here now. >> when saudi arabia is involved, expect things happening to the oil price.
the tension is nothing new, a typical reaction. oil --e to remember that brent hit the 11 year low will couple of weeks ago. it is coming from a low base. what could be a knee-jerk reaction. rishaad: what are people saying about what happens next? questionbe sustained mark -- sustained? : the is up 3.5% early in the morning. is up 3.5% early in the morning. what has affected the market the last couple of years, the 18 months, we are starting to take a look at that. 32 million barrels a day in
december. russian output at post soviet record in december. iran, barrels coming back to the market after sanctions. glut,d: further talk of no doubt. thank you very much. we will take a look at some of the stories we are following. jakarta rising by the limit today. the japanese carmakers are considering a joint effort to takata- to caught up -- rising by the limit today. the japanese carmakers are considering a joint effort to help. is inrmaker says it contact with the driver's family. falling to its lowest in five years as the toiling numbers of high rollers narrowed
its lead o. analysts do not see any improvement before 2017. hotels casino losing 45 -- macau's casino losing revenue. it is scaring off the ip gamblers. vipit is scaring off th gamblers. be bank saying the rate will based on developments at home and abroad. the dong was devalued several times. the pollution problems in china are very well-publicized. the two highest red alerts issued last month in beijing. world's worst.e
♪ let's get over to the indian capital itself and join our renewable energy correspondent. of thisthe cause unwanted headline? what can be done about it? , open combustion in the areas adjoining delhi. of indians burn kerosene, much more polluting vin diesel. -- much more polluting than diesel. is wean be done about it
need to bring it down. desperate times call for desperate measures. government has come up with this odd-even formula. on even days, people are allowed to drive with even-numbered plates. on odd days, it is the same thing. it is an emergency measure, only for 15 days. adapt toe trying to this kind of emergency measure. the situation in delhi is alarming. rishaad: absolutely, not the only city in india that has deep pollution problems. does thisficance experiment actually have? it has brought pollution to the table.
out and people to come leave behind the convenience and take pollution in their own hands and pay a price for it. governments are reluctant to tackle pollution because it amounts to all of those givingve areas, like not subsidized fuel, more investment. of --ls for a whole lot this step is important because it has broken that mental block towards tackling pollution. government, you do it. you are the people, you take it into your hands. or the first time, they have come together to tackle it --
he told his wife by phone that he was assisting an investigation and would not know -- did not know when he would be back. army.will modernize the a missile force and a strategic supply force. beijing becomes more assertive in the eastern south china sea as increasing tensions with its neighbors there. 2 million strong, the largest army in the world. tensions escalating rapidly between saudi arabia and iran over anger of the execution of a muslim cleric. saudi arabia cut diplomatic relations with iran in response. he invoked what he called the divine hand of revenge.
let's get more on this. we will join simon henderson. he joins us from washington, d.c. simon, thank you for joining us. this is a, that came late sunday -- a comment that came last sunday -- late sunday. is that the pot calling the kettle black? your --ou have to alter if you are dealing with the gulf and other parts of the world as well. sectarianism is a particular issue in saudi arabia, but they do not want to admit it. saudi arabia is a majority sunni muslim state. minority,mall shiite but they are a local majority in
the eastern province on the persian gulf coast, which happens to be where all the saudi oil is as well. the character, the main character who was executed at the weekend comes from this area and had been arrested because he had been advocating for greater rights for his shiite community. rishaad: he was one of 47 people executed that day. -- thees to the heart heart of this is the conflict shiitesthe sunnis and in islam. simon: that is one slice of it. there are several slices you have to bear in mind. at the moment, there is a regional rivalry between saudi arabia and iran.
part of that rivalry is to do with ethnic differences. the saudi's are arab, the arabians are persian. another part of it is to do with the religious differences. there are two big people living in the same block and one thinks they should be preeminent over the other. rishaad: indeed. this is far from the endgame. mediation will be needed, for sure, won't it? a good word.ion is i do not think it will be a word in operation this coming week. at best, we are looking for an onortunity to put the brakes
an escalation. things have been going badly. the shiite leader was executed and the saudi embassy in tehran was burnt down. saudi arabia has broken off diplomatic relations with iran. what we are looking for at the moment, i think, is for somebody to suggest that cool heads should prevail for a moment and things which have been going worse should be stopped and any tendency for perhaps saudi arabia's gulf arab allies to also break off relations with tehran, they should be persuaded against such action. rishaad: this is highly dysfunctional part of the world when it comes to dealing with different elements and strains of islam.
sectarian tensions aside, all of what is going on makes it a any external power to try to resolve. simon: the principal external power is the united states, but the united states under the obama administration has been trying to do things which other administrations have either not tried to do or have failed to do. the obama administration has tried to improve on that record. notably in achieving what they thought was a rather good accord with iran over iran's nuclear program. inch essentially meant forgetting the nefarious parts of the nuclear program, iran should be allowed to hold onto most parts of it. saudi arabia has been desperately unhappy at this
diplomatic outcome, distrusts iran, is very upset the united states appears to give iran the benefit of the doubt, and all which has beenn, building up over the last several months, seems to have come out in the last few days, leading to what is this current crisis. let's have an, look at this and look at it in the prism of the relationship that the ruling family of saudi arabia and its long-standing washington, with there is no way on earth the united states could ever be seen as the broker here? simon: iran possibly could say that, and probably may well say
that. revolutionary iran, the iran is the is -- the iran of the , has beenpublic anti-american. it is not going to make constructive remarks towards the united states anyway. underthe united states the obama administration has been reaching out to iran, and thought it had the basis of a compromise on the nuclear deal, and hope also that such a deal would prompt reconciliation on other aspects. the events of the last few days suggest the troublesome aspects of the relationship persist and saudi arabia has effectively chosen to remind washington of the other difficulties between iran and the other middle
eastern states. rishaad: simon, t why so much for your time -- thank you so much for your time. just going to get you to some breaking news. hong kong based new world development planning an offer to buy all of the show -- all of the shares that it does not already own in its china business. although this coming from a person familiar with the matter. -- all of this coming from a person familiar with the matter. this person does not want to be identified. shares were suspended from trading in hong kong. this company is 40 years old. up after the break, from 2016 beto actual, will the year that vr finally takes off?
rishaad: you are back with "trending business." one of the hopes for 2016, will this be year -- be the year that vr goes mainstream? it might be a case of now or never. you have been talking to sony, they are one of the big players in all of this. what are they planning? grails ofthe holy virtual reality is something presence, that sense of being somewhere without actually being there. in vr, it is persistent. a headset hijacks your sense of
vision while sensors track your sense of balance, creating for a compelling experience. the experiences range from deep-sea diving to the heart pounding excitement of a bank robbery. rishaad: this could be a big year. many roadblocks and challenges ahead, are there not? concerns,the biggest people feeling uncomfortable, getting motion sickness. the actual hardware is up to snuff. the challenges artistic -- challenge is artistic. acceleration is a difficult thing in the are. vr.n th
on reports of helping hand by japanese carmakers. new delhi ordering half of its vehicles off the road today. , if you fresh start could call it that, to the trading near. take a look at the lay of the land, same story. , we are coming off a second straight declining year. disappointing economic data. vietnam moving to weaken its currency. not the best start, we are on track for the worst start to the trading year since 1998. also worth noting that most markets are still seeing thin volume. the chinese markets acting up again.