tv First Up With Angie Lau Bloomberg January 10, 2016 6:00pm-8:01pm EST
coming to you live from bloomberg's asian headquarters. all right, it was a pretty good week last week. let's see how today goes. right now let's check on market in asia. in australia, 4/10 of 1% lower than below that 5000 mark. the aussie dollar is weakening at six nine cents. perhaps inclination to think that perhaps the fed good raise rates once again. to new zealand we go -- this is the view. let's take a look at the kiwi. we are seeing weakness for new zealand. 65 u.s. cents. right now, equities are three quarters of 1% down. one close market to tell you about, no trading in japan for coming-of-age day.
we all feel a little older i am sure. in those markets open today, investors will be bracing for another rocky ride after chinese adr plunged on friday. juliet is following the action for us. juliet: it is like august all over again. we had that horror week coming through in global equities and the chinese share market last week. that china route has sent 80 yards and etf's to their worst we have theugust -- main index tracking as down 13%. there was a little bit of a pickup on friday as we started to see some coming through on the shanghai composite. the fall of 13% is of course the worst that we have seen since august. the actually underperformed bloomberg china u.s. equity index which fell by 9% over the course of last week.
you can see big slot coming in thoseparticularly last few days where we saw the circuit record scratch on thursday. i guess that created more panic than actual column but it -- calm that it was actually meant to do. the internet companies were hurt. alibaba was down 13% in new york trade last week. we saw jd trade.com fall. volatility and the csi 300 index soared by 31% last week. that was the highest level since september. of what wese effects saw in august are flooding through into global equities again. angie: does that mean we can expect more stimulus? juliet: premier li been quoted according to beijing news saying that he is not going to actually add more stimulus. i guess they have put so much
,oney at the stock market trying to stem that $5 trillion route we saw in august. instead, the premier is quoted as saying he will do his best to develop his new business models. as china must take concrete measures to stem this route we are seeing have a flow on affect into global equities and currencies. angie: that is the public view, at least the public statement. privately on friday, we did see people familiar with the matter saying that state-controlled funds step done. the shanghaiw composite up 2% on friday. when you start to see those moves, a bit like august all over, it is all happening in that 90 minutes of trade. speculation weof are seeing state-based funds picking up his equities that have been tumbling. retail investors are scared. we seeing retail investors in the u.s. fleeing, coming through out of chinese equities.
they are not as affected by the changes in the yuan as much as what we are seeing in the u.s. ,et's have a look at the yuan it fell by 1.4% over the course of eight days last week. there is calm. they say it has caused panic, at least it looks like we will see fixing.yuan we have a look this morning, a little bit weaker, at 5948. yes ryan share market is off this morning. it is looking like we will see a bit of calm that came through on friday when we saw the rally in the latter part of the trade on friday. that came under pressure again today. this is the 300 index suggesting a fall of .61%.
perhaps another tough week for investors. angie: buckle those seatbelts. thank you so much. checking other headlines. be having ad to government led bailout. they say japan's public-private innovation fund may take a majority stake. there are a number of companies said to be interested. asahi group is said to be looking into miller labels. they say they could deal could go through next week at $3.4 million -- billion dollars. there are others also interested in sab miller. the top forecasters of the india rupee -- indian rupee expected to rally.
calcutta-based consultancy says it will string been as much as 2.5% by the end of march. they see a 1% gain. spending by the government and businesses is expected to boost the economy -- the growth of the economy. the rupee has gained in a first quarter of every year since 2010. it is most definitely not a happy new year for oil in 2016. prices have receded to a 12 year low on friday. heidi is here with a closer look. any expectations that this we could see a bounce in prices? most analysts we have spoken to have been too scared to call a bottom. we did have a balance early on going into the new year. -- has clearly preceded clearly receded along with the market turmoil of last week. we did see a little bit of an uptick in crude prices ahead of that -- nonfarm payrolls. that did not last long.
we had the blowout figure, jobs added to the u.s. economy, that was about 14% above the highest estimates. it was a very robust report on all levels. that's into the u.s. dollar surging -- that since the u.s. dollar surging. it makes it more expensive for dollar commodities to be held, particle he was emerging markets is currencies are plunging. a horrible stat. -- start to the year both brent and of uti down. -- and wti down. take a look at that. if this is any sort of harbinger for the rest of the year, we will.dll -- not the well. brent and wti were off by 30% last year. it is difficult to imagine things getting worse from here. certainly, not a lot of people
calling a bottom. in fact the international energy agency not seeing the recovery in crude until we hit 2017 with prices not searching until about 2020. angie: everyone is looking at that $30 a barrel level. what impact will this have on u.s. shale? that is interesting because the iea also saying if oil prices stay at $40 a barrel, that is essentially going to boom that was in u.s. shale. that means that output from u.s. shale will be down by 3 million barrels a day. that is a 60% decline in production from these current levels. it would also increase global dependency on middle eastern oil. it would require greater political stability in the region. essentially we will see average -- fell tong to 2015 $49 in 2015, and that iea
expecting prices to rise by set -- 2017, eventually seeing it hit $80 a barrel by 2020. that seems like a long way away. not many analyst calling that just yet. angie: it is early days yet. more now on the global energy markets with word that oil giant , saudi aramco is considering an ipo. bloomberg is learning new details about the plan that might offer investors a lucrative alternative to a full loan selloff. what is this all about? zeb: the problem is the upstream operation. million barrels a day produced in those vast oilfields and saudi arabia onshore and offshore. the world's largest offshore oilfield. learning, may involve be refining units, rather than the crown jewels. the saudi's apparently want to hang onto of course the
lucrative asset. investors may have a lucrative opportunity by buying into a bundle of the company's refining units. they refine vast amounts of products, from high-quality gasoline, too low sulfur diesel and petrochemicals. i global empire. -- a global empire. those businesses account for about three land barrels a day that a refined. they are processed from crude into products that go out to the market for retail and industrial use. nonetheless, this via huge ipo, angie. the value of the company could stretch anywhere up to $10 trillion. it is the world's largest oil company. wants to that everyone get in on in terms of investment. if they move forward. angie: no doubt, banks are excited. who could be working with them on this? simply -- zeb:. jp morgan seem as the
preferred because they already worked with them. lester they arranged for a $10 billion loan for the company. they have expertise in the contacts. they had no the market -- they know the market. they are the only two foreign lenders ranked among the top 10 ipo advisors in the last decade. they hold dominant positions the market. i guess the go to banks. certainly you would imagine saudi aramco would want to go to the banks with expertise. angie: thank you. u.s. employment hold steady for december. resultn almost perfect for our next guest. we have more from northern trust when "first up" continues. ♪
north korean tv has shown kim jong on celebrating last week weapons test with senior military officials. he called report that the step a self-defensive step, and it was the legitimate right of a sovereign state. the u.s. has called on china to support action against north korea. beijing said last week, it had not been informed of the weapons test beforehand. the u.s. delivered a strong response to the weapons test, flying a b-52 bomber over the peninsula. the low level flight followed so'eoul's decision. they told a rally in the pyongyang, the broadcast push the two countries closer to war. thousands of people marched to china's liaison office in hong kong, demanding answers to the mystery of a missing bookseller. and for other people associated
with the association critical of beijing, were thought to have been taken to the mainland. the rally went ahead, despite the message that he had went asking for people to respect his privacy and stay off the streets. time now for a look at some of the stories we are watching for you in asia. we are going to get another indication of the chinese economy on wednesday, when the trade balance for december is released. experts -- exports declined while imports moderated. the make of hong kong -- korea decides monetary policy on thursday. if interest rate has been unchanged. economist don't expect a change. the bank will also update south korea's outlook for 2016. on saturday, taiwan alexa new president. the vote will pit the ruling candidate against the opposition democratic progressive party. she would be the first female f sher issue one -- issu
won. it's a good look at what may move markets this week. joining us is northern trust cio, bob brown. will it be china or the robust jobs report that came out of the states on friday? u.s. artie gave his answer, what malaysia do -- what will asia do? bob: if anything the dichotomy between china and emerging markets more broadly versus the strength of the u.s., justifies our confidence in overweight u.s. equities. i know the markets seem to be focused on what is going on in china and the emerging markets more broadly. you ignore the strength of the u.s., that is your peril as a u.s. investor. that was a good number, it shows the u.s. should comfortably grow north of 2%. that bodes well for earnings. relative good strength for the fees -- pes.
pe multiples is something that has concerned investors. we see valuation staying where they are. for the forecast for u.s. equities, that is about 10%. that is pretty punchy consent -- compared to the concerns of the market. angie: if you expect valuations in pe to go up, that means that you make -- you think the equity market will recover. we did not see that on friday, when a? -- why not? bob: i think the markets are concerned about the momentum in emerging markets. there is a bias towards selling. i try not to spend too much time diagnosing short-term moves. you never know what is the cause. headlines might suggest the reason for markets going up or down, the longer-term will be driven by valuations, supported by economic growth. we feel solid those things are in place in the u.s.. on the emerging markets side, and china, there is reason to be concerned. that is why we are undulating emerging markets. we can continue to see this theme.
the u.s. out performing the rest of the world. certainly in the emerging markets. you look at equity markets, how it reflects the lentils -- fundamentals? bob: the chinese financial markets are behaving with underlying growth. for years chinese markets were the worst, despite having robust cannot a growth. just to be aware of the potential dislocation, at least in terms of timing. basically we feel that focusing on the chinese equity markets, and what is happening in the economy will be a mistake, unless you're a check of the -- a chinese equity investor. we are more concerned about the contribution to global economic growth from china. we feel that growth will be ok. we are not forecasting a hard landing. that is our risk case. what is more important for the position is whether or not the u.s. states more the 2%. that is what we think will
happen. angie: there is no doubt china is slowing down. we had ppi and cpi figures coming out. cpi is still rising slightly, but not great. pdi, my goodness, 49 record straight months of declines. we have a big debt issue. that could rear its ugly head. are you concerned that perhaps the fundamentals could be week -- weak. bob: that is a risk scenario tightly aligned with our view of china overall. also the dislocation the comes from further dollars strength. that is getting attention. there is a lot of dollar-denominated debt in the emerging world. continued strength in the u.s. dollar, which we will -- don't think will be as strong as it has been. for all of those reasons and others we believe that you are better off in u.s. assets on a relative basis.
overweight u.s. equities and high yield, underweight emerging-market equities, that is the theme that has worked out in 2015. we do not think it will be different this year. angie: i know we are out of time, the fed rate hike, how many do protect -- predict? bob: we think one more. we think it will be way too aggressive relative to everything. angie: thank you. happy new year. next, the force looks to remain strong for the chinese release of "star wars." the film remains on top in the u.s.. we are back with the figures in two minutes. ♪
it has racked up more than 1.7 million -- billion globally, and is expected to top $2 billion. it edged out leonardo dicaprio's the revenant. that made $30 million over the weekend. star wars help before us and china, where it enjoyed record debut sales of $53 trillion. let's discuss it right now with senior media analyst, paul. thank you for joining us out of sunny l.a.. look, ahead of the box office release in china, a lot of people were really apprehensive about whether or not it would be the kind of blockbuster it had been in the u.s.. certainly, chinese audiences disputed that, clearly. paul: absolutely. i am not sure why there were qustions. maybe it was the legacy or
-- in the 70's, the first star wars was released. the force awakens has created a mythology of its own. it is getting these record-breaking numbers. the news about that has been spread around the world. the movie is really good. the tweets and all of the critical raves coming out about it certainly. follow the film. all of the marketing hype cannot buy you take box office if you do not have the movie to back it up. the movie is great. in china, it is the second-biggest movie market in the world. it is vitally important. now, like you said, 1.7 billion after 26 days in global release. it is a box office speed record. a few more frontiers to conquer, in terms of box office milestones. i have never seen anything quite like this performance. angie: what does this mean for disney?
what does this mean for the toymaker is associated in marketing and toys, and all of the rest that go with it? paul: it means money. it is incredible. if you think about it, for disney to have paid around or billion dollars for lucasfilm come at the time, people raised eyebrows. they thought maybe this had run its course, or people would not have the feeling for these movies that they have for the earlier iterations. jj abrams and his team put together a great movie. disney today pitch perfect job of marketing it. this is important, because it sets the stage, like you said, for future films. the installments yet to come. rogue one at the end of the year, there is a han solo project coming up. there are these other episodes of the movies. there are certainly product and theme park tie-ins. there are also small screen.
when this hits home video, it will set all sorts of additional records. that is really important. this movie set the stage for all of that. you,: i have to ask could this provide a cynical development in the movie? let me explain, hollywood, transformers, very clearly they put china in the forefront of their script. with chinese characters as well. could we see that lead into those star wars franchise? with china, such a big deal? good question, a lot of marketing for other movies and content has been modified or changed for the chinese market because it is an important market place. terms of wars, in casting, there is a lot of diversity in the cast. i do not know that that will be the motivator. i think making -- a great movie. movie critics around the world
seoul.it is a: 30 in that is a live look of the business district. we are watching the markets after the worst week for the asian markets since 2011. we are 30 minutes away from the opening of trading there. welcome to "first up." the top stories, plunging stocks, slumping currency, and minute inflation numbers could
signal lower stimulus and china. china could cut rates and lower reserve requirements for banks, but further falls could complicate matters. on the partners says the currency could decline 15% this year. oil fell to 12 year lows on concerns about the man from china. new york crude futures fell on friday, taking the total decline for the first week of the year to 10%. it closed at its lowest since june 2004. the volatility of stocks leads to concern over falling prices. the biggest ever ipo? hsbc, andy jpmorgan, deutsche are in position to go after the world's largest group is -- producer -- crude producer. it has been confirmed, they are selling for a stake in its subsidiaries.
let's check in on markets in asia. -- wehe had to australia had to australia. it is almost 1.5% down. that is a significant decline at us -- early morning for for the couple of hours it has been open. or rather, half an hour. at 69e the aussie dollar u.s. cents. new zealand markets have been open for a bit, right now it is lower. of 1% the robustness jobs report popping of the u.s. dollar. let's take a look at the upcoming event to keep an eye on in the u.s. here is sue. sue: the week ahead on wall street will have investors in
the u.s. focused on market stability, how low oil goes, and a fresh load of economic data and earnings reports. in terms of the latest reports, economists are forecasting that u.s. retail sales climbed in december for a third month. that indicates that consumer spending is giving the economy a shot in the arm. . production is forecast to decline for a fourth month several real reserve bank presidents are set to give speeches throughout the week. that is in various economic forms because of the recent market turbulence. it is expected these might generate more attention than usual. on tuesday, president barack obama delivers the state of the union address in washington. it is his last chance of the fourth his proposals as he enters his final year in the u.s. presidency. on wednesday, crude oil futures will be front and center as traders position for the latest u.s. government supplied at a. -- supply data. it fell to a 12 year low, in
part concern of china impacting demand. they predict oil may fall to $30 a barrel. it ended the week at $33 and change. earnings season is upon us with the following key companies set to report in the week ahead. j.p. morgan, and chase, citigroup, and wells fargo. in new york, su keenan come in bloomberg news. su keenan, bloomberg news. angie: a majority of comments submitted to the nations telecommunications regular back to its planned for free, but limited web access. yvonne man is taking a look. thate, it is incredible facebook has seen backlash against free internet. why? man: most people have said this is threateninget neutrality, at least the president of free access -- at
least the principles of free access to equal amount of websites. 1.3 5 million responses coming out over the weekend. it came into the telecom regulatory authorities. 63% of the comments were positive for the plan. another half-million coming in through facebook e-mail. zuckerberg made a personal appeal last month really and one of india's leading newspapers. there were these huge as pushing for this initiative. the broader initiative coming out of its internet.org. they say the program is a bridge out of poverty, to the unconnected billion that we have in india. that allows this initiative, customers to access face as well as the basic tools on the internet -- facebook, as well as the basic tools on the internet. industry groups say this threatens net jollity -- neutrality. all websites should be equally
accessible. gettingacebook just people to get access to facebook and lockout rivals such as youtube and google. is it just trying to make money? telco operators seem to think so. they say it could change the pricing in india. of them favor differential pricing plans, which allow users to pay a premium to get better plans. so far, we do see a little bit of backlash in recent months. today could be a bit of a break in terms of support of facebook. certainly, offering subbing for free impacts bottom line for these telcos. what are the chances that this would get passed? yvonne man: it seems like everyone in india is concerned except for the prime minister. we see those pictures were he is hugging mark zuckerberg. he would to the headquarters in december -- september. we have seen critics calling it the state of the internet
campaign. the regulator in india said over the weekend, that these comments either support or opposing differential pricing were basically template responses, meaning that they were not helpful at all. identical in nature, and he did not explain how these could be used in this review, coming up at the end of this month. the regulator now, appealing to the respondents of these comments, as well as facebook. saying they need more details opinions. -- detailed opinions. . angie: thank you. here is heidi with a look at what we are watching on the terminal. haidi: thank you. the latest plan to spin off its main internet business a be abandoned. isrces say yahoo! considering an outright sale of the business, although they have not contacted potential buyers. star board and other investors have been pushing yahoo! to separate the alibaba assets from
the main business, without incurring a big tax charge. yahoo! had previously proposed returning alibaba shares to shareholders. the microsoft boss have been given a seat to president obama's final state of the union address. he is one of 23 people invited to join in the house of representatives. the guest usually include those who have -- overcome tragedy, become national symbols, or who benefit from a policy initiative. theyresident's final year, can include those thought to represent the future. elon musk says fully self driving cars are just three years away. he says the cards will be able to drive themselves all the way from l.a. to new york by the -- before the end of the decade. he's focused has tesla released a software upgrade that allows its cars to park themselves. he calls it a baby step in the development of driverless cars. across lowering prices many north american cities to boost demand.
prices in los angeles and san francisco will fall by 10%. there is a toy percent discount in houston. main draw for test drivers will earn less come of it that will be offset by demand, uber says. they will eventually spread the reductions to 100 cities. inie: u.s. auto industry is help after enjoying. record sales last year. they are hoping to keep the momentum up the first major car show of 2016. matt miller is in detroit for bloomberg. matt: we are here in detroit on the eve of the north american international auto show. we are going to see dozens of debuts from companies like fiat chrysler, food dashboard, and gm, as well as his 80's, bmw, bull's wagon, and honda, we own it, mazda, nissan, and kia. can the cars that we see over the next couple of days convince
consumers, ss -- especially investors that 2016 will be the better year than the record that we saw for u.s. car sales in 2015 when we had low gas prices, low interest rates, and falling unemployment. the models that we see over the next couple of days will have to convince the markets that car stocks can continue to thrive. matt miller, bloomberg, detroit. 2016 is expected to be another challenging year, especially for energy and resource companies. four of the five companies with the absolute worst growth prospects in asia are either oil explorers or miners. take a look. ♪
angie: here is the first word on the stories making headlines around the world. mexico is moving towards extraditing drug pen, walking to the u.s. after his recapture. following an interview with actor, sean penn. amen known as el chapo humiliated authorities to escaping prison for a second time. the white house has criticized
sean penn for his interview with el chapo and a secret location for a rolling stone article. however, some reports say his actions helped police tracked down the head of the drug cartel. government is to draw up a new constitution to ease the ethnic tensions that led to the country's 26 year civil war. called forinister parliament to be converted into a constitutional assembly to drive the changes. rebelskan forces and the are both accused of committing war crimes and the conflict that ended in 20 -- 2009. the world's biggest lottery jackpot is still up for grabs after nobody matched all of the numbers in the we can draw. the total powerball prize is now $1.3 billion. it is only expected to grow ahead of the next to draw on wednesday. the odds on winning are more than 292 million to one.
netflix has thrown down the gauntlet to video streaming providers with its expansion across most of the asian pacific region. one of those taking up the challenge is pccw media group which today launches changes to its own services. joining us from singapore is it managing director, janice lee. you launched it three month ago in hong kong. now you are rolling it out to singapore and malaysia. why? janice lee: thank you. good morning. angie: good morning. janice lee -- angie: tell me why now -- especially in the shadow of southeastpansion into asia and much of asia, except for china, it feels a little bit like you are david against netflix's goliath. lee: first of all i think
the glowing -- growing online consumption of consumers in asia is certainly grabbing the attention of a lot of players, including global players. i think it does demonstrate the potential and demand we see in the region. more important, i think asia is really a collective of very diverse sets of market conditions in landscape. the online bandwidth availability, mobile data availability, the language in --.ons at required options required our focus is to build a service that is relevant and accessible to unit -- users in different bandwidth conditions across these different markets. angie: are you saying that will be enough to differentiate you against something like netflix which is also saying they will create unique local content for each market? is on aee: our focus
few things -- one is we recognize that amongst these markets there are the likes of hong kong and singapore, which does enjoy very high and with quality. you can go out with a very feature rich, slick service. if we put the same service and products across to markets like indonesia and india, it might not get into t hands a lot of mass consumers. therefore, being able to deliver a surface that is -- can cope with bandwidth conditions is important. we have a kind of technology that does adapt to all of these conditions. --ondly, the content itself we're focused on being asian content at the get-go. we have done agreements, deals with four major korean broadcasters. etc., to have all of their output of the korean japanese andg on
taiwanese content in the future. we believe we have a distinctive value proposition to deliver. angie: are you fighting with netflix and other online producers or distributors for the content? is that driving up prices for these local products of local content? lee: as with other media businesses we have, you are always competing for good content, whether it is acquired content, or whether you're producing the best content for the local audience in each market. by and large, i think the market is big enough. if you look around asia, there are a few emerging services, but there is no real established foothold so far. . we feel the market is open we do feel there is strong consumer demand, whether it is online or via connected devices. the mobilegiven that
penetration and smartphone penetration, even across market india and indonesia is growing so rapidly. we think the opportunities there, i believe it is a big enough market for multiple players. angie: all right, alibaba is one big player that is hoping to get in on things. how do you meet these challenges of netflix being one thing, and coming into an asian market, but with real north american sensibilities, but alibaba, they have china and asia since abilities. -- sensibilities. how do you compete with something like alibaba? lee: apart from rolling out service at a macro basis, we look at the details that helps consumers access the service. for example, one of the things we do, and have invested in, is a fast turnaround of subtitling. literally, at 10:00 in the
evening in korea, a popular drama is being broadcast, we turn around a subtitle within eight hours of viewers can enjoy it that in the morning. apart from of times, having a great service, it is about the usability that suits the local environment. i think this is going to be in our edge. angie: before i let you go, i am a customer in hong kong. tell me why i should have view on my mobile. all, it hasfirst of got all of the latest and greatest asian content, especially, right now, the one kind of content that transcends the region is korean content. when i say be markets are diverse, korean content seems to travel well. secondly, we have side -- subtitles very fast. totly, we have download stream options for those conscious of their bandwidth consumption.
this is a service you can download off-line and watch him ago. angie: -- watch on the go. angie: how much does it cost? janice lee: there is a free layer, where viewers can enjoy vast amounts of content. we are rolling out a paid service as well. angie: think you for joining us. that is pccw media group managing director. one asian airline has signed a deal with the country's military to mass produce con's of drones -- reconnaissance drones. ♪
we are at the ubs greater china conference held every january here in china. usually the conference sets the timetable and the agenda for what we will talk about in the business world for the year. 2016 got a jump on the conference. the market turmoil, with the chinese have done with yo youan. and what will the fed do? who better to talk about that then sergio armani -- sergio ahmadi. he will be live for this later. stiglitz will be here. and of course columbia economics professor, caroline and see --. coming up we will have caroline anstey.
we will talk about an upcoming climate change report. a busy morning, day one of the ubs greater china conference. angie: thank you so much. welcome to the stock exchange. we look ahead to the opens -- well, the open. japan is closed today. south korea is open. our reporters are here to tell us what stocks are on the cusp. >> it was hard on monday. let's talk about global investments and security. the stock has been down 28% for the past year. is said to be in talks to acquire shares in world kitchen. this is a company based in australia. the wholesaler of home furnishings and housewares. the deal is estimated to about $500 million. it may be reached by march. analysts say six buys, and one
cell. back in christmas, they said it might be poised to be korean summer one broker with this day will deal set to be -- daewoo deal. that would make it the biggest brokerage by essence. again -- itflight is a sky team member. korean air -- this is interesting. they have a contract, for $340 million to build unmanned aerial drones for the korean military. the airline, which carries passengers and cargo come will now be tilting reconnaissance drones for the korean military -- building reconnaissance drones for the korean military. very interesting to see that. probably the first airline in the world making an unmanned aerial vehicle.
haidi: that leads to my stock pick. tech -- last week we saw this nuclear surge in a number of the south korean defense and weapons related manufacturers. victex was the major gainer. we had two sessions last week with a saw a gain of 25% plus. year to date is up 36%. not a bad performance. i do suspect we will see a little bit of a correction today. these tensions between them are continuing. every time we see headlines being in the news, we see stocks like these see a rally. ,eb: three of them, victex first tech, -- -- unmanned: safe bets yvonne man: safe bets.
i am angie lau. coming to you from hong kong. let's get straight to the markets in the asia-pacific. this is the lowest level since july 2013. a weakening australian dollar. let's head over to korea. down more than 1% right off the bat. yuan.er want right now no training in japan today for coming-of-age day. investors bracing for another rocky ride after chinese issues
plunged on friday. we are all feeling a year older and we are only a weekend. juliet: the australian market is added a two and a half year low. on friday in the united states was this china route really starting to affect global markets. down 13% over the course of last week. underperformed see bloomberg china u.s. equity index. the first five days in china last week we had today's cut short by the circuit breakers. on thursday day scrapped that. that is where a lot of the weakness really came through. a lot of investors really fleeing out of chinese equities.
is the highest level since september. we also saw pessimism really about chinese internet companies. those big names like alibaba. falls. foreign investors are getting scared similar to what we are seeing here. energy: does this mean we will get stimulus from china? speculating we are is state-based intervention coming through into the market. the official word is actually not. beijing news is citing an interview with premier l saying that the circuit breaker was supposed to create, even though it actually created panic. there will be no more strong
stimulus. but they are going to do their best to develop new business models. the understatement of the year, saying they must take some more concrete measures to try to calm this equity and currency route. angie: what about the you want yuan?you juliet: we did see the currency drop 1.4% in eight days. will this spark a curacy war. i huge drop coming through this morning. although there was some calm on friday. probably on that speculation of a libido boosting coming through from authorities. marketcts the australian , at its lowest level since july 2013. following on from the weakness on wall street.
the offshore yuan was also down to a low level. unsurprisingly despite that calm, we are expecting a selloff to continue today in chinese markets. pointing to a drop of 6/10 of 1%. the hong kong market likely to get hit as well. angie: checking other headlines. sharp is said to be considering a government led bailout that includes the sale of its lcd operation. nikkei news says it's innovation fund may take a majority stake. said to be among the lenders involved in the talks. it is one of the number of companies said to be interested in sharp.
group is said to be interested in buying these beer labels. forecasters of the indian rupee expect the currency to rally after its recent decline. spending by the government and businesses in india is expected to expand growth in the economy. it is most definitely not a happy new year for a lot of people for oil. prices receding to 12 year lows on friday. it has been taking quite a hit. is here with a closer
look. haidi: we are not off to a great start. we're seeing another tip of about 2%. they still keep finding reasons to go further into that a russian us for oil. worst start to the week ever for oil prices. down another 12%. if you thought 2015 was a horror year, it looks like 2016, the pain is not over. this is a four-year chart. than 30e of more percent for both wti and brent. moretors are just finding and more reasons to bet against oil markets. the numbers for the latest recount fell by 20. down to 516.
that bump in the payrolls number. it was a blowout number. 292,000 jobs. that was an increase of about 40% on even the highest expectations. instead of taking the good from that, we had investors betting against oil which didn't again after the nonfarm roles number came out. largely on expectations that the dollar's strength is going to drive other currencies away from commodities such as oil. angie: the factor of supply. aresupply doesn't mean we going to see that stop in production. that has been very clear from saudi arabia. there is a real strategy here. what does this mean for u.s. shale? haidi: that, we are getting
more shipments in from iran. pricing warle between those two big middle east producers, saudi arabia and iran. the international energy agency is warning that if oil stays below $40 a barrel, that would shale boomndo the for america. it would eliminate most shale production coming down by about 60%. be a expect prices to not start rising until 2017. that feels like a long way away. angie: more now on the global energy markets. is considering an initial public offering. bloomberg has learned that there are new plans that they offer investors a lucrative alternative to a full-blown selloff.
sam: we are looking at the refining business. operation.g this is the most lucrative. 10 million barrels a day. world's largest oil company. when the coffee confirmed on friday that it is studying ipo, in investors got very excited. but what they're actually doing is bundling together their refining assets. putting him into one listing so they can keep the crown jewels, the oil fields, for saudi government. investors will be looking at that very closely. gasoline, lowity sulfur diesel, petrochemicals, that a lot of money and profit for the company. 3 million barrels a day. if this proceeds, as some of the markets are saying, it would be very lucrative not quite as
lucrative as a full ipo. angie: some banks are lining up to work on this deal. sam: the value of the company if it does a full ipo ranges from anything from $1 trillion to $10 trillion. it has assets all over the world. jpmorgan, hsbc are among the investment houses that are interested in working on this deal. presence in the kingdom. they have been there for years. secondly, they are very well poised to do ipo's because they are among the top ranked lenders in saudi arabia. to handle ipo's. one more point. they did a $10 billion loan for saudi aramco last year. that competence is there. you may see others involved. deutsche banc may also be involved. it is such a big ipo you would want many banks involved.
angie: first word on the stories make headlines around the world. kim jong-il and was seen celebrating the nuclear test. the test a self-defensive step and that it was the legitimate right of the sovereign state. the united states has called on other countries to support action against north korea. it said it had not been informed of the weapons test beforehand. the united states delivered a strong response to the weapons test. flying a b-52 bomber over the korean peninsula. followed souls decision to resume propaganda broadcasts in the demilitarized zone. the north korean workers party
told a rally in pyongyang that the broadcast was pushing the two countries closer to war. soul has also strengthened his forces of the border. thousands of people marched to china's liaison in hong kong. demanding answers to the mystery of the missing bookseller. they have published books critical of beijing. thought to of been moved to the mainland. wifeent a message to his saying to respect privacy. let's check in on markets trading in the asia-pacific. it looks like we are heading for another down to day in these markets. the south korean market is down almost 1%. the australian market down almost 2%. not seen since july 2013. japan is closed for coming-of-age day. shanghai is the place to be
today as ubs holds its flagship china conference. it could not be more timely than this. stephen: good morning. we are at the ubs trader china conference. interview, caroline in sleep. it is a job created by the investment bank. the former managing director of the world bank. what is the global head of ubs in society. carolyn: bringing together everything we do in the social and environmental space. the new climate change report is, don't ignore the impact of climate change on the middle
class. which has happened to date. we tend to look at the impact on the poor. and the poor will be significantly affected. the middle class is going to take a significant hit as well. the interesting point is that the middle class has little power, they have mobilizing power. they have financial power. we see pressure on government. this is a significant piece of work. the middle-class is affected in three or four ways. first is through urbanization. rapid urban growth. we know that cities are affected heavily by climate change. because of air pollution. we know that health, threats to human health. temperature goes above 30 veryes celsius, it is
difficult for the human body to manage overtime. high risk and insurance. why is one of the reasons people ignored this before. in developed countries, the middle class is heavily insured. take china and asia, 91% of weather-related disasters have no insurance. that hits the middle class. stephen: in the first half of last year financial disasters cost $32 billion in losses. only $12 billion was insured. if i take this further, we would be more expensive not to tackle climate change that to pay for the damage? caroline: the paris deal pledges $100 billion. those are pledges that were made by developed countries some time ago. i think a lot of work needs to happen to mobilize that money. the private sector has a key role to play. that wefact remains
think the pressure that you're going to see from domestic populations to take action on climate change is going to thatase because we know the new economic psychology says that loss of version is a prime driver of people's behavior. behavioral economics. you lose something you care about, it worries you. the middle class are going to lose and that is going to have an impact. what about the slowing pace of global growth especially here in china? caroline: it will have some impact. oil prices, for example. what you need to see is a lot of investment in renewable and clean energy, clean technology. we are already seeing that. some new coalitions coming out of the paris meeting. but it will take a major push.
you have to see some new instruments. we had green box. have to see other ways of mobilizing capital to go into this area going forward. you will a lot of work on that. stephen: some say $100 barrel of oil is better for climate change than $30 barrel. caroline: you might say that. stephen: china is pushing people , billions of people, into cities. deceptive that give china an opportunity to be more efficient? think what china is saying is that this massive urbanization will stabilize in 2030. 2030 is also the date by which we need to be stabilizing emissions. there is a correlation but at the moment rapid urbanization is going to drive up demand for air conditioners which will contribute to climate change.
the pressure on the grid. it is not an easy relationship. at the moment it is sustainable cities a key need across the world. my hope is that china is now theing green finance into finance track of the g-20. no he could thought of that happening 20 years ago. we are seeing china moves and that is very important. stephen: thank you so much. we have kicked it off. from shanghai. more coming up this hour. angie: thank you so much. ubs in shanghai. something to think about. the wand fell to a five-year low last week. could there be worse to come. we will discuss that when first up returns. ♪
the wand could fall another 15% this year according to omni. authorities can't fight economic financials. thy hundred $65 million firm says the yuan would have to drop further to meaningfully stop its appreciation. on the partners says that if china faces a credit crunch, we yuand see the yo you tumbling another 30%. risk aversion is completely alive and well. the yen is searching this morning to its highest level since august 4014.
a six the day for of gains. japanese markets are closed today. which should seek liquidity reduced. analysts say the main focus will be on the chinese currency. and how the shanghai composite reacts to the selloff on wall street. asianggest gain among currencies. it has prompted hedge funds and other large speculators to turn bullish on the safe haven currency for the first time since prime minister abbe came to power in 2012. analysts are also predicting a rally in the rupee. after three quarters of declines. spending by the government and businesslike owns is fueling economic growth in india. 65% by the ends of march. the currency has gained in the first quarter of every year
since 2010. let's check in on this yen this morning. really having another solid session. the six the day of gains. currently holding a little bit weaker than what we've heard about. still up by about 1/10 of 1%. the relationship to the dollar is still 117. checking in on the australian dollar, just trillion market is holding at its lowest levels since july 2013. the australian dollar falling cents. 73 american angie, those of the stories driving the markets this morning. angie: time now for a look at some of the stories we are watching for you in asia. on wednesday another indicator of the chinese economy with the trade balance for december being released. exports declined for a fifth straight month.
korea decides its monetary policy on thursday. it has held interest rates unchanged at one half percent for the past six months. while economists don't expect to change this month, it'll also update south korea's economic outlook for 2016. on saturday we have elections in taiwan. electing a new president. against signing wing. from the opposition democratic progressive party. she would be taiwan's first female leader if she wins. the current prime minister has been in office since 2008. is lowering prices in 80 different cities in america. prices in los angeles and san francisco will drop by 10% while there is a 20% reduction in houston. bey are hoping it will offset by greater demand.
china fueled risk aversion. with japan closed today, shares in sydney australia are leaving the losses. oil has extended its decline on concerns about demand from china. falling further after losing 10% during the first week of the year. brent closed at its lowest price since june 2004. it is compounded concerns that demand may be falling in the world's leading energy consumer. plunging stocks and the slumming currency could signal more stimulus from china. at 1.6%.ame in about half of the 3% target. lower reserve requirements for banks. yuanther fall for the could complicate matters. south korea's index is down more than 1%.
australian equities down even more, down almost 2%. we haven't seen these level since july 2013. concern about china resumes ahead of the china market open. can you imagine what happens in about one hour from now. ? japan is closed for coming-of-age day. all right. we'll like that. facebook's a battle to bring free internet to india has won a big like in support. majority of comments submitted to the nation's telecommunications regulator backed the controversial plan for free web access. facebook has faced a lot of backlash against this. but now it seems to be supported. yvonne: a bit of a breakthrough here.
you add another half a million the came in through facebook's e-mail. also in support of the initiative. zuckerberg last month amid huge push for this. a personal appeal. one of india's leading newspapers last month. he said this program is a bridge out of poverty to the unconnected billion in india. this broader initiative of customers toallows access facebook, health care, education, job listings. without a data plan. industry groups have been very outspoken about this. saying this threatens the principles of that neutrality. all websites should be equally accessible. who was facebook to decide what users can get access to for free? are they locking in people to just using facebook and not its rivals, such as google?
zuckerberg says he is not making money off this initiative. he says it is all about alleviating poverty. angie: and what the chances this will be approved. ? yvonne: we do see some pop from the public at least. many people in favor of this. the prime minister of india is in favor of it. and hewith zuckerberg went to the facebook headquarters. they're pictures of them hugging. the regulator said over the weekend that these comments they have received recently, whether it is opposing or favoring the templatee, basically responses. gave no meaningful input. identical in nature. not helpful at all. he did not explain how these views are going to affect his
decision at the end of this month on whether to approve the zuckerberg plan. he says now he is appealing to the respondents as well as facebook to get more detailed opinions. he is not approving these responses so far. angie: it is ironic that the arguments about facebook andding and net neutrality then we have one regulator deciding for the entire nation? has more the things we are watching today. yahoo!'s latest plan to spin off its internet business may be abandoned. is now considering an outright sale of the business. although it has not contacted potential buyers yet. pushing yahoo! to separate the alibaba assets from the main business. to avoid a tax charge.
the microsoft boss has been given a box seat for president obama's final state of the union address. is one of 23 people invited to join the first lady michelle obama in the house of representatives. guestsident's final year can represent those thought to represent the future. there is no disturbance in the force-out. star wars continues to lead the north american box office. and it had a record weekend in china. $46 million in the u.s. and canada over the weekend. , 812 millioncord since its release. 1.7 billion dollars globally. it is expected to top $2 billion before it is done. it opened in china over the weekend. disney says it took in a record $53 million in two days.
tesla boss elon musk says the fully self driving car is just three years away. he says cars will be able to drive themselves all the way from los angeles to new york before the end of the decade. tesla released a software upgrade that allows the cars to park themselves. in theed a baby step development of driverless cars. isie: the u.s. auto industry in rude health after enjoying record sales last year. they are hoping to keep up the momentum within the first major car show of 2016. we have matt miller in detroit. miller: we are here in detroit on the evil of the auto show. new models from companies like fiat and to gm and chrysler and mercedes and volkswagen and of course honda, .oyota, hyundai and kia
can the cars that we see over the next couple of days convince consumers and especially investors that 2016 will be a better year than the record that we saw for u.s. car sales in 2015? we had low gas prices falling unemployment and falling interest rates. the models that we see over the next couple of days will have to convince the markets that car stocks can continue to thrive. angie: welcome to the stock exchange. let's check in on what our reporters are watching. yvonne: not a good start for the week or the year. securities asset management down more than 3% right now. toy are said to be in talks be acquiring shares in world
kitchen. about estimated to be $500 million. may be reached by march 6. today is looking pretty red. angie: this is very anti-directional to the broader markets. i think this is a win. that magnitude lies but this is very interesting. haidi: they are the only ones making money. dronekorean air has a new deal. and this is a stock that has been down sharply in recent years. the news todayin because they are said to be producing or will produce an unmanned aerial vehicle. they are going for passenger vehicle drones.
they are in a $334 million contract with the korean military. to produce these reconnaissance aircraft. i've never heard of an airline making drones for the military. haidi: continuing on the war mongering attack. the contact is a weapons manufacturer that makes sonar systems, military communication systems. electronic warfare systems. it has corrected about 10% over the session. over two sessions last week where was up by 25%. the tech is up 53% year to date. this is my first win of the year. angie: our reporters picks are
angie: mexico is moving towards elraditing drug kingpin guzman following an interview with sean penn. the white house is criticized the actor for his interview with el chapo. but some reports say his actions helped police tracked down the head of the drug cartel. sri lanka is getting a new constitution.
to ease the ethnic tensions that led to the countries 26 year civil war. the prime minister called for intoament to be converted a constitutional assembly to drive the changes. sri lankan forces and the tamil tiger forces of both accused of considering atrocities in the conflict that ended in 2009. the world's biggest lottery jackpot is still up for grabs. nobody matched all six numbers over the weekend powerball drawing. the total prize is now $1.3 billion and it will only grow before the next drawing on wednesday. slow growth, volatile markets and a weakening currency are just some of the challenges facing china this year. let's get the thoughts of nobel laureate joseph stiglitz. he is at the ubs conference in
shanghai. stephen: good morning. this is day one of the ubs greater china conference. we do have the nobel laureate, professor joseph stiglitz of columbia university. economics professor. year. beginning to the just 11 days in. where are we heading economically? stiglitz: a lot of people are thinking that 2016 was going to be better than 2015. 2015 was the worst year since the global financial crisis that i shall he a longer. . 2015 was not good. people were saying 2016 was going to be better. fundamentals, the
i didn't see anything really changing. thatason really to believe 2016 was going to be better. these first 11 days have given us a little support to my particular perspective. the marketw much is turmoil reflection of what is happening in the real economy? do the two days in a row of 7% downturns directly reflect the weakness in china? joseph stiglitz: no it doesn't. there is always been a gap between what happens in the real economy and financial markets. the american economy was really in bad shape, the stock market was doing very well. china is apening in slowdown by all accounts. everybody is looking at the data and they seem to be convinced that the growth is slowing down. it is not a cataclysmic event. it is a slow process.
there's no real news. this does remind us that market rules matter. the way you structure those market rules can either diminish the volatility or increase the volatility. is awe are here in a sense consequence of some market rules that were not as well designed as they could've been. circuit breakers can be very important. we have circuit breakers that are too close, one gets triggered and they say we're going to see the other one gets triggered. so they rush to get out before the next trigger even happens. that exacerbates the volatility. they picked up one important idea, circuit breakers. they did think through as deeply as they could have the design of the circuit breaker. propositionneral you might say.
rules but design the rules is not easy. stephen: ubs is predicting a 5.8% gpd growth for china. joseph stiglitz: i think is very hard to be sure of where the growth is going. it is going down. it depends on the five-year plan that is not yet been announced. how will they formulated that. if you make a big difference. there's a big debate going on about the balance between supply side and to demand side measures. i am of the view that you have them both. push too much on just
the supply measures, not enough seehe demand, then you can a deeper downturn. all over the world there is a slowdown. in brazil, other emerging markets. the focus just on supply measures doesn't pick up what is happening in the global economy. capacitynot excess that is bringing down brazil. what is going on is a shortfall in global demand. china has immersed himself in this world economy. there are domestic things that are affecting it. exacerbating the crisis. if they are have enough to my --d side measures demand-side measures, there will be a downturn. stephen: does this give the janet yellen and her team at the
stephen: welcome back. the ubs greater china conference here in shanghai. nobel laureatee economist from columbia university, joseph stiglitz. stiglitz, thank you so much. let's talk about china. a lot of the jitters at least in the west about china has been what they claim lack of transparency toward policy. yuan.hey devalue the how important is it for the global economy to get clear agnals from china and would calendar event like the fomc
meeting be a good idea for china? joseph stiglitz: my own view is that the more transparency the better. there has been this very great volatility in policy. and 2009, when the west was facing the global financial crisis. there was a lot of variability and uncertainty and it did contribute to downturns in the markets because nobody knew which financial institution was in trouble. nobody knew who was going to be bailed out. just a say this is chinese problem. this is a global problem for the financial markets. the weakening of the yuan. it could go to seven to the dollar. this would help chinese exporters if they want to export their way out of this slowdown. how dangerous is it to the debt
deflation trap and that china is going into? stiglitz: by devaluation you actually put inflationary pressures in the economy. this is one of those cases where a debttions help prevent deflation. in china. overseas, it has a global ramification. little country. when a little country has a problem, it can lower its exchange rate and ignore the consequences on the rest of the world. because it is small. it's great achievement is that economically is now the largest country in the world. in terms of purchasing power parity. what it does has consequences all over the world and other countries react. controls its own exchange rate. the global markets, you lower your rate others may respond.
is a much more complicated situation for a large country like china. stephen: we've seen competitive devaluation. joseph stiglitz. when the united states began on quantitative easing, that was competitive devaluation. we can call it that. we were very thankful and united states that europe didn't understand this and they were still focusing on inflation. they raised their interest rates, we lowered ours. it was a competitive devaluation and it helped our economy recover more strongly than it did in europe. you cannot separate out interest-rate policy from exchange rate policy the notion that exchange rates are just market determined is foolish because a major issue is
interest rates that are determined by central banks. stephen: what should the central bank in the united states do given this turmoil? will this cause a pause in march? joseph stiglitz: they were going to pause anyway. the u.s. economy is not yet back to health. we did very well last year in job creation. but the reservoir of unemployed people, whether they are officially unemployed or not is very large. we saw that in the last few months. downnemployment rate went and we just pooled people out of the group of unemployment. does the political uncertainty in the united states throw wild card into it? does a hillary clinton presidency versus a donald trump presidency make a big impact? joseph stiglitz: yes it does.
we used the same eric and politics was boring. the two parties were so close together that it made no difference. we now have one of the most polarized politics in the world. say what is the economic uncertainty between a trump presidency and the clinton presidency, it is huge. no wonder people would be worried. faster joseph stiglitz, thank you so much for your time. we'll have much more from the ubs conference from china already this morning, all day tomorrow. angie: we are looking forward to it stephen. thank you so much. thank you for joining us on first up. as we wrap things up. trending business is coming up next. here's a look at what is coming up. rishaad: we will be back in the conference in shanghai. many people are hotly anticipating this opening in