tv Trending Business Bloomberg January 17, 2016 8:00pm-10:01pm EST
♪ rishaad: it's monday the 18th of january. you are watching "trending business." ♪ rishaad: we will be paying a visit to taipei and singapore for the course of the next 18 minutes. or watching markets beginning. nikki facing a bear market along with australia. heading toward the lowest close in more than three years. the oil affect to some extent. the robber there to reenter what
is a saturated market. sanctions could mean an extra half-million barrels a day. politics, the president. propel taiwan's new leader to an overwhelming victory. reaction on social media. today's top stories, follow me on twitter. market opening and shanghai. with the opening prices. we are seeing really steep losses as the rest of the region comes online. singapore down by 1.5%. by one and 7/10 of 1% despite a resounding victory over the weekend. not much of a celebratory rally there. nikki down by one and 9/10 of
1%. technically down more than 20% from its june peak. japan really close to join china. waiting for chinese markets to come online. china is one of two halves of the major drivers of this market selloff that we are seeing. quarters and full gdp numbers coming for tomorrow. a lot of volatility and jitters ahead of that, particularly regarding markets heavily exposed to chinese economy. asx 200 down by 1%. we are about 10 points away from falling into a bear market for sydney. new zealand stocks, qe stocks, one of the worst performers of the day down by one and 8/10 of 1%. take a look at some of the biggest movers when it comes to
sydney. it is in this oil space. whitehaven call, some of the other commodities and related names down by a person as well. pretty good gains across consumer stocks. worth nearly 5% gains. investors look for a safe haven like gold. it is the oil story. close to $20 a barrel for crude oil. a 12 year low. a run coming back online. -- iran. looks like they will be improving -- will not be improving a time soon. rishaad: have a look at china stock watchdogs. shows there were flaws in the system. chairman describing market and participants as immature. says institutions gave illegal activity.
cso says itrman of got it wrong. shall get admitted that there were loopholes and ineptitude with the system. some institutions not taking responsibility for stabilizing the market. he blamed incomplete trade rules and inadequate market systems and incomplete and inadequate -- an appropriate regulatory systems. comments coming a day after china was back into a bear market on friday. wiping out the gains from an unprecedented state rescue we saw at the end of last year. raising questions on the government's ability to manage its financial markets. the losses were further fueled by the controversial circuit breaker system which authorities scrapped in the first week of january. they say they will learn from the mistakes. and they ipo reforms will be gradual as they shift toward a more registration system, possibly loosening its
from the other which controlled the timing and pricing of offerings. sources say they are planning another move to stabilize. starting next week. said to impose reserved -- reserve requirements for offshore banks. rates are at 0% and changes require a ratio similar to the level we see from chinese banks. 17.5 for the major banks of the lane land and 15 and a half for the smaller banks. stable yen exchange rate after interbank arming costs surged to a record in hong kong. we will see how the markets do in half an hour. strategists are bracing for a deeper bear market coming out of china. rishaad: indeed. a look at that story throughout the course of the program. it has been about oil. briefly dipping below $20. sanctions against iran elected
are possibly responsible. speculation that there will be more oil. we know that this a becoming on board. >> that's what interesting. it has long been flagged. iranians almost every month a been telling the market that this is what they are adding to the market. reaction is a little bit interesting. oil has been caught up in the whole china story. the start of the year has been terrible. rishaad: this is half a million barrels a day we are talking about. they say they will do that within a week of this ancient spain lifted. how realistic is that? >> the first place it will come from is tankers. according to iea, 12 million barrels of crude oil and tankers. in terms of forecasting, 500,000 barrels, within the first week, then the same after. one million barrels within six months.
you have -- it seems optimistic. forecasters are thinking it will be less than that, maybe 100,000 barrels in the first month and 400,000 after. that is largely down to increase supply coming out of the middle east and the thought that the removal of the 40 year ban on liftts from the u.s. might the glut there. for the first time in a long time, if you think to a few years ago, it was $20. rishaad: thank you. we'll be revisiting this one as a big one for today. a look at some of the other stories that we are watching. we have a roundup of another horrid day. sharp plungeing a despite reports that lenders may be looking at new ways to help the struggling company. the nikkei news says that tokyo
and mitsubishi are considering a new round of debt for equity swaps. according to the report, lenders discussed option on friday and angry to set a direction by end of the month. there are also expected to screen proposals from this trip -- state backed fun. sources say that sharp is considering selling them a stake in their operation. thats reported last week they may raise their offer for $5.9 billion.o that sent them soaring the most in more than 10 years. today, falling more than 2%. heading to australia because well worth and loans are quitting their unprofitable home-improvement joint venture which operates a masters in home hardware brand. they said in a statement to the stock exchange that it will buy loads at 33% share and sell or close the business.
this comes after they said that it plans to exercise right to force woolworth's to buy the stake. the masters hardware superstore struggle to gain a foothold in a market dominated by --. going the other way around the rival and find the uk's home base for $485 million. operation has 265 stores across britain with revenue of more than $2 billion in the 12 months through august. last year. returning to a multibillion-dollar agreements in the works. general electric is selling its home appliance operation to china's higher in a deal worth $5.4 billion. that is a hefty premium. haierments,
can use the ge brand for several years. still needs approval but will be expected to be completed by the summer. haier has used international acquisitions to expand quickly and consolidate overseas resources. they block control of a new zealand firm in 2012 and took over an electric business to expand in southeast asia. ge, meanwhile, refocusing business and selling consumer business as well as unloading a balk of ge's lending arm. back to you. rishaad: a look at our website and how these big mac bargains are moving amnesties on the estrogen dollar. check the story out. coming up later, this sinking feeling, two of the world's biggest oil rig builders are falling by -- reserveimpose a offshore.
♪ china may impose new rules on offshore yuan accounts. banks willfshore require reserve ratio that is the same as chinese banks. something that should start of next week. a stable currency exchange rate into bank borrowing costs surged to a record in hong kong. jeremy out of london. what do you make of this story? i think markets were destabilized by the significant moves that we are seeing in the
early stages of the year and now we are seeing a degree of stability trying to be imposed by the authorities and trying to get back in charge of the story the firstnda because two days of the year were very much characterized by the triggering of a circuit breakers and also the depreciation of the currency. a degree ofeeing stability or at least an attempt to try bring stability back to the market and an effort to try and stabilize the global system which of course -- rishaad: that's my point. whether they want to depreciate it to around seven estimates suggesting, what kind of regressions good that -- repercussions could that have? jeremy: we are looking at a market currency and they will continue to depreciate if the chinese currency does cheapen. we after member that the currency was stable against the u.s. dollar for a prolonged time at the same time when the u.s. dollar was appreciating. there is a degree of catch up any to be required. fretful thatery
the catch-up is going to happen very quickly and also that it is systematic on the basic that domestic economy in china is weaker. that is the real fear factor. rishaad: that is, nobody knows. jeremy: in a sense, they don't. the other side, we have never known the absolute level of growth compared. rishaad: you can tell. jeremy: we know that it is decelerating, but that is part of the plan. it is the question of whether the deceleration is happening more aggressively than the authorities can with and -- withstand. of course, the global system is being concerned by other growth dynamics particularly in relation to the legacy of the u.s. move. rishaad: if we were talking three years ago, there were very few ripples around the global markets. this is quite different now. the world has changed. how much of that is down to the mapping those special drawing rights? jeremy: it is part of the process in the sense that it takes us back to last summer
only lisa market dislocation is the authorities were changing the fx regime in an effort to get into the --. they are on the cusp of that in terms of the official opposition of the currency. the question is, we have to mirror that the importance of the chinese economy to the global system continues to magnify because of the size of the chinese economy and that has a big balancing effect and variance of we assume that growth is a 5%. dollar which we have seen strengthen. but it is very sporadically. look at the australian dollar, 68. sterling, getting it, link. jeremy: indeed. commodity orientated currency or one which seems to have been previously leverage with china, something like yesterday and is getting hit down it is also the question about whether the are be can force consider rate cuts. in terms of sterling, number of reasons. markets pushing back the
expectation of a rate hike in 2016. reality probably tells us that if there's going to be a hike now it will be in q4 rather than q2 which was where we were originally assuming. sterling tendse, to underperform because of the --. other overarching issue, europe, regarding the thing in june. rishaad: you're making a recovery. angela merkel perhaps putting pressure on --. meeting on thursday. jeremy: interesting if you look at the most recent minutes from the december meeting, the dissent underlined in a way that seemed to be appropriate from the insider chat from ucb. clearly a disconnect between germanic view of europe and or the other school. marriott draghi is much more expansionary than the germans alike. i think the euro economy is
actually showing signs of reasonable growth. you have to put that in context. growth at 2% in europe is pretty much as good as are going to get. rishaad: it would be quite the wish. breaking news story. for the yuan,ht 6.5590. again, it is trying to engender a degree of stability. jeremy: we are not absolutely alone the currency to depreciate very quickly for fear of stimulating additional concerns because of what that implies about the growth cycle. rishaad: now that you are tired of being asked the question about when will the fed be hiking interest rates, now you are thinking, when do they move next? that was last year's question, when will they move? we have moved on to how far will they move in 2016 and of course, we've had the push and pull
between some of the language we have seen from the fed. saint three or four hikes this year. i think that still looks rather ambitious. i think if we get a hike in q1 that will probably be the much -- them as we get. rishaad: people are questioning whether that was the best thing to do. jeremy: and a sense he can the fed have actually been a little bit behind the curve. they should have been living much earlier in the year. they were clearly spooked from the hiking back in september because of the legacy of the events in the summer. and a sense, you can argue that the fed are literally behind the curve anyway. are they going to go much further than that? i don't think they are. if we get the hike in march, and it is looking far more uncertain now than it would have been two weeks ago, but if we do get that hike in march, i think that will be the pause point for the majority of the year to see how the legacy of this hiking cycle actually plays out in terms of the underlying economic metrics. rishaad: you are here in hong kong today.
i saw your itinerary, it is not. all over southeast asia. what is the message that you're trying to bring? what questions are you expecting to be asked what you are here? clearly there will be a lot of inference in terms of the impact of the slide in the oil price and the impact on the canadian economy and the dollar denominated currencies. i think that will be a theme. trying to engender an underlying fact that clearly canada, as well as the us trillion dollars are being understood of again pressure. i don't think we are talking about capitulation, we're talking about currencies moving well beyond the value levels. in a sense, almost in blowout phases. we need to underline the fact that the fundamentals are still comparatively strong, albeit far from -- certain circumstances. rishaad: things do have a tendency to overshoot. jeremy: that is the nature of markets. we've known each other for a
long time and we know how markets operate. they generally operate in terms of blowouts. that is where we are going now, in a sense. difficult to see anything other than negativity and pessimism in the current market perspective. i think we would also make the point that the glass is still essentially half-full. we are seeing a great deal of negativity now, but if we are still looking at global growth, probably north of 3%. global economy will still be performing a little better this year ends early next year than it did last year. i think that is the message that we want to maintain. from a bigger picture story, the global economy is still operating a reasonable clip of growth, but we are in a rotation phase and i think that is really causing a degree of uncertainty. obviously, of course, we are reliant on central banks, the question is, will they still be there to support the market? something, itis is stand if they do, down to figure out. thank you jeremy.
♪ rishaad: let's look at some of stories making headlines. taiwan beginning a new political era after the presidential election and overwhelming fashion. party set to control presidency and legislature for the first time. while to revive economy maintaining cordial ties with china. >> the results of today's election showcase the will of the taiwanese people. it is the shared resolve of taiwan's 23 million people that the republic of china is a democratic country. system, national identity, and international
space must be respected. any formed suppression will harm the stability of crosstrained relations. rishaad: three american to have been held in iran have arrived back in geneva on a swiss air force plane before being taken to a u.s. military hospital in germany for checks and a debriefing. their freedom coincides with the release of seven iranians held in the u.s. under a deal that took more than a year to negotiate. north korea's -- testing nuclear weapons as united states suspends wargames with south korean forces. foreign minister and pyongyang says that america must get used to north korea being a nuclear state. let's look at what is going on across asia-pacific. equity markets are now in a fair territory. here's heidi. have one falling after another. a bit of a domino effect here in asia. you can talk about the two major drivers of this selloff, one being china and the other being
oil, but there really seems to be a third element where fear is feeding into itself and we are seeing this vicious cycle of losses across the region and we are seeing a lot of these market that are very sensitive to china during -- dream particularly badly today. ozzie and qe stocks down. these are coming ahead of the second quarter are rather fourth quarter even gdp numbers coming out tomorrow as well as the four-year economic snapshot as well. ahead of that, the chinese premier has said, surprise, the number will come in at around 7%. we are not expecting any surprises, but certainly anything to the downside will be seen quite a reaction in addition to the selloff that we are already seeing across asia. weterms of chinese markets, did have the chairman over the weekend saying that quite a lot of negative things about the market that it is immature and inexperienced and that some of the regulatory overtures have been inappropriate. quickly, we did have them set the reference by 0.07% stronger
♪ rishaad: looking at our top stories, asia-pacific markets starting the week ripped by a new batch of nurse. japan on the cusp of the bear market. markets in hong kong and china are lower. the were start to the year on record for equities globally fueling a -- crude oil around $20 a barrel both in london and in new york. already ramping up while production in tehran following the lifting of sanctions.
an immediate increase of half the money and barrels a day with half a male coming on stream and months. expecting prices even lower. flaws and loopholes in china cuties and regulations stock market here at securities and claimingchairman immaturity. someng also criticizing for allowing illegal activity. markets open in shanghai and hong kong. haidi: bringing you the opening numbers. it is as we expected a lower opening. shanghai down by almost 2%. hung say index down by one and 4/10 of 1%. really tracking broader regional losses that we are seeing. remember, shanghai falling into their territory on friday session. seeing those losses extended
today. the comment from the chairman over the weekend saying that the market is immature and that participants are inexperienced and some of these regulatory moves to try and stop the losses that we have seen have been inappropriate. not exactly a vote of confidence when it comes to these chinese markets. seeing the selloff really continue. looking at the biggest louvers. everything the vector in the red. big losses. some of the smaller stocks have been brutally sold off. they have also been the ones that have been most overvalued and the peak of that rally last summer. we are seeing the pain continuing. getting the latest out of wells fargo, sec, another 4% -- 14% decline until it gets down to about 2500. some of these residential property developers because property prices came out of china and it looks like the
tier one has pretty good numbers. >> looking like more growth once again. further stabilization in the sector. december prices coming in, month on month risers, rising and 31 cities. , more than what we saw in november. we did see a whole year of stimulus, breaking a little more life back into the property sector. breaking it down, in terms of shanghai, december existing home prices, that is rising 11.7%. that is slightly lower than what we saw back in november when prices of existing homes was 13.1% year on year. month numbers rising 1.2% in december out of shanghai. november we did see 1.6%. growth is slightly coming down, but we continue to see some gains. when it comes to beijing's december existing home prices, rising 1.7% month on month.
see -- ieijing, we did think it was -- cannot get the data, but we will continue to look at other breakdowns. beijing rising 8.3%. on year figures. i do have those. back then, we did see a 7.7%. beijing doing a little bit better, but shanghai faring a little bit lower. here we continue to see december new home prices rise year on year in 21 cities. that is slack from what we saw back in november. we also sell 21. as a break this down, we see countries for the first year, remaining hot. the rest of the countries are lukewarm. the critical question here is whether this will pass through to that strong construction because we are still not seeing that go through into the economy. new construction continues to contract and stronger landfills providing some tentatively positive signs. again, some improvements in
those new home prices in december rising and 39 cities. compare back to 33 in november. back to you. [indiscernible] what do you make of it? >> destabilizing. dishonoring a little bit which we actually have been expecting because of the economy slowdown and also the shock and the asian market. rishaad: that is the thing. but does it that, surprise you that the likes of the big cities have been on fire with the property market? beijing and shanghai at 8% plus year on year. nicole: it has been somewhat of a surprise. we were looking at 12% price increase for last year and the tier one cities were ending up with something like close to 20% , so that is a very strong
growth. we think it is because all of this listening in terms of down payments and also race cards which push a lot of money out to and they are all finding the best -- foraad: people are looking property again when they see what has been going on with the equity market and thinking to themselves, what led to the original absolute growth in these property prices was also people reacting to equity. you see history repeating itself. nicole: repeating a different way. in the past, every type of property when up in prices, but right now you can see that the homebuyers are very differentiated in terms that they are only going after the first year cities and selective second-tier cities, but not all second-tier cities. searchers cities are actually been stayed away from. because the prices there are quite week. rishaad: ghost cities taking
hold. the event some stories on that. nicole: exactly because the oversupply. it is difficult to ignore it any longer. all of these price increases we think will be very concentrated in about 30% of all china's property markets with remaining 70% actually doing nothing or going down. rishaad: essentially, we have a country which has a lot of levers still in place should they want to use them in order to get more house price growth? nicole: accept that the price group is only going to be in very small segments of the theet which means that what government wants, which is a pick up in the economy is more difficult this time. rishaad: please dig around with us, because we are to get market reaction to what is going on now with all of this news coming through. when it comes to these property prices. it is interesting. we are seeing the broader shanghai coming off of those earlier losses.
we saw down by over 1% and is now down by 7/10 of 1%. 4/10 of 1%.down by steep losses across the property names. within the financial sector and real estate down by two and 6/10 of 1%. across that really -- investment companies suffering the most. take a look at the biggest movers and terms of the reaction to the stabilization of chinese home prices. while those numbers were not back, it's early does not show an uptick in recovery. jindal as one of the only ones trading in the green and shanghai at the moment, up high one and six tens of 1%. look at the other big players trading. china yankee, down by six tens of a percent. talent do is down by over 4%. rishaad: back to nicole. take a look at what is going on here in hong kong for instance. chairman says this is the
healthiest market that he has seen for 25 years. nicole: it depends on where you spend. the properties almost sold out all of the residential apartments. for them, it could be very healthy right now. when prices go down. they can look for new opportunities. rishaad: people are talking a 15-20% appreciation of comes to the housing market here in hong kong itself. nicole: absolutely going to happen. rishaad: why? one of at this point, the biggest problems is actually the economy is slowing and if you look at 2015, hong kong has been more than 8% of its gdp on buying new homes, so when the economy slows and when people spend, that is not the gdp on new homes, and went home supplies action going up, there is no other way for prices to correct. rishaad: so you are suggesting
that as you look at these falling house prices, it is not just of course here in hong kong, but beyond that, i guess looking at selected cities and again in china, you should be selective and see opportunities, do you see opportunities? nicole: no. [laughter] rishaad: that's the thing, isn't it? nicole: i think this is probably time to stay away a bit from asia. rishaad: what about the shares of these property companies? do is stay away from them? nicole: we think a lot of bad news has been pricing but the problem is we look at the charts, hong kong developers share pricing do not stabilize before residential prices stabilize. sometime later, maybe. rishaad: thank you, nicole. we have been discussing this market turmoil with our guest today. dave english spoke exclusively.
at the asf. he started by asking him what he thinks about the current volatility. >> we see a massive adjustment in the world and the u.s. is improving. the fed has changed their policy. china is adjusting. we understand why. emerging market countries may suffer, especially because the price of oil is low. so we see massive adjustments in world, i do not think growth is lower, but what we see is adjustments and adjustments may be bumpy or difficult. i think this is what we see today. >> but we have not met for a long time. these are very slow adjustments that are taking place. do you think that investors may have just overlooked it? >> yes. we understand where comes from. we understand quite well where we go to, even if they are -- there are some i know parameters. markets react when they make
decisions. each of us, we have to make decisions on the spot and sometimes there is an overreaction. see a big, massive change, we see simply the implementation of what we have fact is going to happen. >> a lot of the concern is surrounding china's reforms agenda. i guess a lot of people are doubting that beijing is in total control of the situation. do you believe that they are in control? >> i think they are. i'm very confident. i think we understand quite well where comes from, from an economy driven by exports. to a new paradigm. to a new normal. it takes time and it is difficult. but i welcome this. because we need it. if it is not put under control, we may have different questions. so, -- in the proper way.
>> they're coming out there gdp report tomorrow, question two, to believe the numbers? >> yes. all of us are the same. we may have a long debate. >> it is fair to everyone else. >> but i do believe that numbers are correct. the asian financial form. next, singapore stock companies expecting to take a hit from the collapse in oil prices. which ones are the? the details are on the way when "trendy business" returns. ♪
saturday taken a number of video -- victims 28 including four militants. the worst assault on the capital since 2009. police say attackers had things to islamic state and they have shut down more than a dozen websites that express of for the actions. one man has died and five other people remain in the hospital after being given an experiment with drug and a medical trial in france. the victim was declared brain dead last week after taking the drug developed by the portuguese company to treat mood and anxiety problems. french authorities are trained to get in contact with 84 other people who took the drug. european metta seen agencies say that in city -- incidents like this in first aid trouser extreme a rare. winter has arrived with a bank of japan. cancellation of dozens of domestic flights including 103 japan airlines and nearly 80 at ana. carriers say that at least 13,000 passengers are affected. japan has bullet trains between cities.
are released. struggling with an unusually warm winter so far. shares of oil rig builders in singapore are falling today. one of their clients in brazil may be filing for bankruptcy. let's go to our southeast asia correspondent in singapore. what is this all about? >> it is about oil. court getting hit by falling oil prices. bankrupt, low oil equipment drilling has not made any payment to the shipyard in more than a year. they areop of that, also getting probed over allegations of corruption. oil is really causing havoc, keppel and sembcorp make devices.
using alternatives. not great news for the companies. expect sluggish earnings this week from both companies. likely to pose smallest annual profit in seven years. syntel corp. may see a significant earnings drop as well. until, and unless, we see oil recover, rig builders will be slammed, shares of both falling today by more than 2%. can the company's ride this out? is a short-term storm? or longer-term applications? to write outhave the storm, but it will be challenging. the key customer accounts for about 40% of both order books. if see brazil goes bankrupt, they will need to revise their revenues and government charges. if you take a look at oil prices, that is another headache. it is likely to slip and slide
away. some now betting on the team dollar oil. few expect an outside. most that we track do not recommend buying either keppel or the other. i want to say what they've done this year. among the worst performers, down more than 20%. it has only been two weeks or three weeks of trading. keep a watch on oil. we will know how the companies will do later this year. rishaad: thank you. following qualcomm. joint venture in china. trying to break rival intel dominance. 45% stake in a new company being formed with the government. chipse used to develop for data centers. and so currently enjoys 99% market share.
one of the five missing man linked to a hong kong bookstore turned up in police custody in china. shown making a confession on china's state-controlled television. should manus says he turned himself into chinese police because he was wanted after being convicted of killing a college students while driving drunk in 2004. he disappeared in october in thailand and his colleague vanish in hong kong last month citing fears that the tactics used to stifle dissent on the mainland were being exported to the city. new star wars movie ended its run at the top of the north american box office, "the force awakens" and four weeks at number one. it has been toppled by "right long 2". the film taking a million dollars over the weekend. next, how a number of a korean girl band may have affected taiwan's election
♪ you are watching "trending business." streaming on bloomberg.com. as was your mobile device. taiwan is starting the first recall the new political era. -- they won athe saturday present election overwhelming fashion. party supports formal independence for taiwan and is now set to control both the presidency and the legislature for the first time. the challenger be to revise the -- revive the economy will also maintaining cordial ties with china.
warning that moves toward independence would be poisoned. and a victory speech, angry rhetoric from china would not go down well in taiwan. later on the program, talking to representative of the party. first, news in taipei. bdp was widely expected to win. this kind of landslide was quite a surprise. >> writes. this is really a landslide in the classic sense of the word. you have the democratic progressive party winning 56% of the vote to the 31%. that was the widest margin since taiwan's first of a credit presidential election in 1996. like you mentioned, at the beginning, this was dpp's first legislative majority in the history of taiwan. this really is an election full of historical significance. not even mentioning that taiwan -- this woman will be the first human president of taiwan. rishaad: why did they lose by so
much? was a just not seen as a credible -- do they have a credible candidate? to begin with, the electorate was really dissatisfied with the outgoing president's government. this really was an election that was fought on bread and butter issues, people were dissatisfied with rising on prices. the way china enters this equation is that people feel like they have been sold on this idea that economic integration should be good for taiwan's economy, most people sibley feel like they have not felt the benefits them selves. rishaad: thank you. let's have a look at how people have been reacting on social media to these results. >> a lot of taiwanese people are taking their celebrations over the victory to social media, calling the results a victory
for freedom of speech. one facebook user quoting her statements after her victory saying that taiwanese should not apologize for their recognition of taiwan is a country and a facebook user saying that he feels touched. another person saying: of course, this election comes at a time of high tensions with china. controversy over a korean girl group when the -- she is a taiwanese member of this korean group. that is the right there. she waved a taiwanese flag and a photo shoot and that led to controversy. trending to boycott her management firm. you can see her apologizing over her allegations that she might be pro-taiwan.
one facebook user when as far as to say: you have to go tomorrow because there is public anger in taiwan and that that would be reflected in the election results over the weekend. a lot of people going as far as to say that this led to many people going to vote. this is also got the attention of anonymous taiwan, posted on his facebook page: thank you. know, what was turned in on social media. reactions to that result. the taiwanese elections. taking place of the weekend. looking ahead to the next hour of the show. we will speak to the boss of a conglomerate. he'll be joining dating was coming up. also, the full market check with the stocks having the worst day
all-time high. blue chips in singapore, the world's leading the rainmaker expected to be hit by news from the other side of the world. do, heidi will a tell us what is going on with the equity position right now. much of the way to the brain of the region. the philippines, manila on track. 7/10 of 1%. a little bit of a bounce into the grains for shanghai. up and down by 1.27%. substantially less selloff on the chinese markets. we weree halved --
about 10 points away from a market.l bear confirming the story reported earlier, it would be implementing the rrr ratio requirement for offshore accounts. this is not expected to affect domestic liquidity. does not apply to central banks. using a monetary tools to maintain liquidity. going to get that liquidity squeeze anyway. look at how offshore is trading. giving back some gains. up about a half percent, -- see ny looking flat earlier. strengthening that for the morning range. december 21, 0.7 percent. out one to i go
quickly check oil prices. sitting close to $28 a barrel mark. no change in fundamentals. the iran supply coming back online is putting oil barrels back into the market. >> china stimulus beginning to pay dividends. spreading to more cities. stabilization is the word. >> that you are seeing the recovery in more cities, especially the smaller ones. that was a key highlight in the december figures. the one-year statement from government officials seems to be breathing more life into the sales. this is after we saw them targeting regions with a surplus of unsold homes. these new home of prices in december climbing and 39 cities
and compare that with the 33 in november. out of 70. back in june is when we saw the inflection. more pricing gains and then price losses in the cities in china. thedecember figure is biggest gain in three months. now 39.tober, back to the level we saw in september. for the year-on-year prices, house prices flat. stabilization is key. last month, we heard from china officials that they vowed to try to put more stimulus into the property sector. that was one of their key tasks in 2016, to reduce the helmet inventory. this prompted expectations of more easing measures. prices new property
climbing 20%. >> inflation is 12%. some people thought that was excessive. tracks 20.8% three times what we for new homes. shanghai prices rose slightly higher than november. the crucible question now is how it will translate to construction. we continue to see contraction when it comes to construction. but we did see stronger land sales. rishaad: the other big story. equities taking an absolute high. having a hard time of it. level.8 looks a barrel lifting sanctions against iran, speculation we will see more oil on the market than what is termed to a global glut.
we will now look at this. it is quite something. from a year ago, this is the position wherein. >> we are. iran was always the wildcard. the next step is to see how that will play out for the market. initially, the thinking is there are some stored. 12 million barrels will hit the market immediately, after that we will have to wait and see. the first half of 2016 was always going to be a hard year for oil. rishaad: iran is going to add half a million barrels a day, the first few days after the sanctions being lifted. >> within a week they were saying. 5000 barrels. six months after that, 500,000. essentially, a million barrels within six months. are a little mysterious on
that, they are saying 100,000 barrels by the end of the month. that largely comes down to see what is in decline after many years. they have been in the wilderness , but they have had time to talk to those oil companies, to sort themselves out for the day will quickly, why is it that we have this spread. being moreys favored expensive. >> it was not too long ago that it was $20 between the two contracts. it is two factors. supply from the middle east end around the is adding to that. and there is the lifting of the ban in the united states. the thinking is they will be able to export some barrels and even alleviate that glut.
rishaad: thank you. now, around making headlines. a rough time of it in tokyo. >> thank you. flat after falling as much as 4% this morning. the lenders may be looking at new ways to help the struggling company. mitsubishi considering a new round of debt for equity. according to the report, the lender's discuss the option on friday and agreed to set a direction by the end of the month. they are expected to screen .roposals sources say sharp is considering selling them a stake in its lcd operation. it was reported the offer may be raised for sharp by 40% to $5.9 billion. that sent sharp soaring for the
years. two currently today, losing 8/10 of a percent. some are quitting the unprofitable australian home-improvement joint venture. they said in a statement, woolworth will buy loews 33 percent share and then sell or close the business. it says it plans to exercise its right to force woolworth's to buy. the warehouse is going the other way around, buying the uk's home base for $485 million. the operation has 265 stores across britain. and, countries with currencies pegged to the dollar are coming under increasing attacks by
traders. some say this may be a false move. traders are betting it has become too expensive for policymakers to continue defending exchange rates while the commodities the source. already, kazakhstan and argentina have been forced to devalue. now derivatives tied to the hong kong dollar suggests traders expect it will not be long before the same happens to those currencies. begich a bank and others say traders may be underestimating the hefty reserves available to policymakers and their willingness to defend the public. saudi arabia and hong kong together hold $1 trillion in foreign reserves which would be enough to cover their imports and spending four years. looking at the altering dollar. the route is going to end, why are they predicting it?
the economy while maintaining cordial ties with china. a move toward independence would be poison. china's angry rhetoric will not go down well in taiwan. >> the results of today's election showcase the will of the taiwanese people. our democratic system, national identity, and international space must be respected. of suppression will harm the viability of cross trade relations. rishaad: three americans held in taiwan have been flown back to the united states. they are at a u.s. military hospital in germany for checks and a debriefing. seven iranians held in u.s. under a deal that took more than one year to negotiate. diplomatse of the
a strike for smart diplomacy. said,he foreign ministry america must get to use to north korea being a nuclear state. officials met in tokyo to continue tougher sanctions against the north for its latest weapons tests. form and hong kong, let's go to our own david english. david? david ingless. david: we are live. what is interesting now about what is happening is the markets have detached themselves from a
reality. a violent recalibration. not as robust is as a lot of people expect. joining me now is the ceo of one of the largest conglomerates in the philippines. they q4 joining us. for joining us. as you look and plan to this year and the year after, do you -- mr. ayala: the philippines has come a long way. the slowdown will affect exports. been -- we are far stronger there then we are on the export side. we're not in an oil-producing nation, so it has been beneficial to us that oil prices
have come down. spot? are we in a sweet >> we're still in a very good position from an i/o a point of view. ayala point of view. our remittances continue to drive consumer demand. that has been a strong point for the country at a time when there has been a slowdown on the export side and commodities in general. think it will be reflected in your plans for this year? are we looking at a higher budget for 2016? >> we have been as far more and philippinesg the far more. chances are this year we will hit about 100 million. over the last few years we have
an hitting numbers of this nature that are unprecedented in 's history. we continue to expand on the telecom side and the real estate front and the capital expenditures we need to keep our businesses competitive. david: are you looking on the outside? i think what we have seen is conglomerates. new zealand. spain. a casino and south korea. >> we have been overweighting sometimeppines for now. our economy has been good. we're the second robust economy in asia. we have some positions abroad, and electronics planted that has a global footprint. china, mexico.in continuing to grow.
we have taken some steps and utilities, moved our water business. we have become a fairly major player in ho chi minh city and vietnam. we continue to look at opportunities. i think, all in all, our portfolio has remained strong. david: i have to ask you about the potential entry into the anket, i have yet to see analyst come out and say there's no room for a third player. they may be able to take market share. are you well-prepared for this? >> i think it has been many years now the globe has continued to increase its market share. i think we hit 50 million customers recently. that is a far cry from the 13 million we used to. organization,
aggressive. ifwelcome open markets and you can get the right licenses and come in we encourage them to do so. frameworks, we have shown good strength, balance sheet, and a great marketing and sales team so i think we should be able to withstand this. david: macro on the philippines, you have elections coming up in the philippines. is that the single biggest risk factor? >> there always uncertainty that comes with elections. i have seen the platforms of most candidates and they are basically running predictable economic policies for now. there's no candidate showing an unusual trend out from the kind of economic policies the current government has shown and that gives me confidence so irrespective of who wins would like to think economic policies
of this at existing government will continue. so that gives us comfort. on the negative side, and is uncertain as to how the elections will go. that is always a question. praise aboutof the how things up and out in the thingpines, what is one you see that they may have overlooked? what is one thing that perhaps the new, incoming government can do? fax let me start with positives. our government has come a long way. it has been reflected in our credit rating, low inflation rates, low interest rates, a great time. on, there will be other factors that come to play and for now, we are forward to a much more stable villa pains. we need to adjust to the growth
taking place in the country and make sure they have the infrastructure. if we can get that correct and complement with the right infrastructure for growth to become sustainable, we have a winning combination. david: they queue so much for your time. >> thank you very much. david: there you go, rishaad. very complementary on the economies. i hope pans out. back to. rishaad: david, right. coming up, the impact of future oil. huge ramifications for the world's top rate-builders. we will head over to singapore next. ♪
>> that you are watching trending business. i am a rishaad salon. ae price of oil being hurt by failing client in brazil. talking about who is failing. >> well, rishaad, centre court moraine, in trouble. -- central brazil may go bankrupt. g boyle cutting into drilling equipment. running out of money. has not made any payment to the shipyard since november 2015. also, central roselle also getting probed for corruption. a big headache. oil tumbling, explores
preferred to use cheaper alternatives. numbers are released, expect sluggish. lowest annual profit and seven years. rpntre court moraine -- sembco marine hurt by plunging oil prices. be painful and tough. key customer goes into bankruptcy, there will be big trouble. it accounts for about 40% of both of their order books. they will have to look at revenue. a law upon how oil goes. to 25 now to 15. have to find a silver lining. buying shares,d
among the worst on the index. down more than 20%. not much demand for oil or oil rigs. not the business to be in right now. rishaad: thank you. let's have a look at some of the other stories. gyrating stocks. fluctuating currencies. mountain of debt. the one thing that looks like a haven of stability, china gdp. they have their numbers out for the final quarter of 2015. a are expecting to expand their economy by 6.9%, exactly the same as the previous three months. minister isine general,or secretary general secretary i should say. the national assembly will vote in june. also wednesday, a fourth-quarter
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rishaad: a look at our top stories. markets gripped by a fresh batch of risk aversion. stocks slipping with energy linked currencies as oil stocks go low. equities swinging between gains and losses. the regional benchmark heading for its lowest close since september 2012. oil down below $28 a barrel. it could fall to $25 today as i ran prepares to wrap up production.
sanctions are lifted under the nuclear deal with another half-million coming within months. this is expected to push prices even lower. china's home price recovery spread to more cities in december. new home prices climbed in 39 cities. chinese authorities have been rolling out easing measures, targeting regions with a surplus of unsold homes. we are just getting japan closing the morning down nearly 2%. let's look at what else is out there. haidi: not much else. japan closing out and of the morning session. the nikkei down by 2% as traders go on their lunch break. technically, we are seeing a bear market for tokyo. the topix is down by about the same since august. we are seeing a lot of
oscillation when i comes to the chinese market. shanghai down by about 0.3%. certainly off those earlier steeper declines that we saw. when it comes to the chinese market, there's two camps, one saying we are going to see another 14% decline when it comes to shanghai. on the other hand, you've got h-shares looking different now. now is the time to buy if you have the stomach for it. let's look at some of the biggest movers and losers. it is down to oil and gas. oil trading at about $28 a barrel. most sinceng the march 2009. we are looking at a seven-year low for that stock. down under, we are seeing steep losses for a lot of producers.
santos down by close to 8% today. turmoiljapan, all this and volatility, we are seeing the markets reacting. we are seeing japanese currency's reacting, sitting close to that 1.16 handle. toshiba, toyota down by 1%. toshiba staging a little bit of a comeback. we are also seeing some losses when it comes to chinese property names. property data came through this morning. rishaad: china's watchdog says it reviewed a rout. the securities chairman describing markets in the chore and saying that some institutions gave illegal activities a free pass.
of course there were flaws. >> this is the chairman admitting that. rishaad: under pressure chairman. >> there were loopholes in the system. regulators got it wrong. these are comments that came about after this internal policy meeting, where they were reviewing what had happened in the past six months or so. a day after china stocks went back into a bear market, wiping out the gains we saw after this unprecedented state intervention. talk about this cheerleading from state media. himself was criticized for talking up the stock market as that bubble developed. this is what he says, the slumping stock market, speedy deleveraging activities --
not to mention that some institutions allowed for illegal activity. rishaad: what are the reforms that he would put in place? yvonne: he says they are going to learn from their mistakes. rishaad: one would hope so. yvonne: they look at some of their overseas counterparts. they are not going to see a wholesale adoption of one nation's system. first, they said they are going to do ipo reforms. they are shifting towards this registration-based system. m&a are going to encourage among listed companies. with agin trading reasonable overall size. strictly regulate program trading and curb excess of speculation in futures. he did talk about the shanghai-hong kong stock link. the shenzhen hong kong link, he said that is still going to happen. capital partners talking about
these situations, saying the stock market developed too fast. the regulations didn't catch up. rishaad: thank you very much indeed. this other story, something which has really been brewing in the background, it is concerns about this chinese red hot corporate bond market. derivatives rising by a record 22 basis points. liang is with me now. what are their worried about when it comes to corporate china? credit are essentially an insurance policy against the bonds going under. >> good morning. credit default swaps on chinese government at spiked 22 basis points this year, the worst since the global financial crisis. that is a reflection of global investor concern. china's equity market continues
, contributing to a rise in the insurance prices on government debt. rishaad: local bond yields keep falling. what does that tell us? >> china's local bond market is still relatively isolated. that's why the global concerns are not reflected as yet in the local bond yields. local bond yields are declining because of continuing monetary easing and large-scale liquidity injections. also, the funds from the equity market into the bond market is supporting the bond rally. we are seeing the yield premium of top rated corporate bonds over government securities have plunged to a record low. rishaad: last year, we were worrying about defaults, and we were going to get an avalanche of defaults. ,e haven't seen an avalanche but are we expecting a lot of defaults this year? >> yes.
the defaults are going to rise. a lot of analysts have said that 2016 is a year when we will see systemic risks to emerging china's credit market. bloomberg analysts have all anticipated a rise in defaults this year. creditwhy i think default swaps are rising. insurance costs are rising. investors that have bought into bonds at the current level could be in for losses when the market turns later this year. rishaad: great talking as ever. china is the specter of further defaults. credit default swaps there. let's check on some of the other stories we are following today. it looks like the indian central bank governor isn't afraid to use his currency reserves. fell $2.8y's holdings billion in the two weeks up to
january 8. let's look at where they stand now. i think it is just over 325 billion. china's market turmoil sparking a global selloff. bank of america merrill lynch may spend up to $20 billion this year to keep the rupee around this 65 per dollar level. qualcomm trying to break rival intel -- dominance in the server chip market. it has taken a stake in a new company. qualcomm's design and technology going to be used to develop chips for data centers. intel enjoys a 99% market share in that sector. general electric selling its , ae appliance operations deal worth just shy of $5.5 billion. it is a heavy premium. haier canagreement, use the ge brand for 40 years
and the company will keep its existing headquarters. it is expected to be completed by the summer. taiwan is entering uncharted waters with the independence party set to control the presidency and the legislature for the first time. bloomberg news is in taipei. pp, why aree d they expected to win here? this level of victory was a surprise, was it not? >> yes, it was. we had the dpp not just win overwhelmingly in the race for resident, but also take their first majority in the taiwan legislative yuan. 35 for thempared to formerly or outgoing ruling party. that's quite a big margin. that will allow them to push through their agenda in the
coming months. is, was it ag situation that they lost this election over the dpp actually winning it? >> well, this election is widely seen as the repudiation of the policies of the knp under the president over the last eight years. that's a widespread sense his economic policies haven't worked, haven't allowed taiwan to enjoy the sort of growth it enjoyed a generation ago. and that is focused on the mainland had not trickled down to everyday workers, had not lifted stagnant wages, and that he hadn't done enough to help stem the tide of home prices. all that at the same time there's a sense that the island has become too dependent on the mainland economically and needs to find its own way to boost its
economy at home. rishaad: thanks, brendan. which has beenng making waves on social media. people are reacting to these results. >> the taiwanese are celebrating on social media. a victory over the ruling party. they are calling this a victory for freedom. sne facebook user quoting tsai' speech when she said the taiwanese should not apologize for the recognition of taiwan as a country. the user saying that his feelings were touched. another person saying, taiwan would like to keep freedom of speech and the fate of the island should be determined by its citizens and not any other outside influence. rishaad: you were talking earlier about this korean girl band. it's apparently had a huge influence in this election. shery: this happened just before
the elections took place. a korean girl band in the spotlight. rishaad: what are they called? shery: twice. one of their members, this is a wasanese member, she innocently waving a taiwanese flag in a photo shoot. that caused huge controversy, leading to -- rishaad: she carries a taiwanese flag with her? shery: it was for that specific photo shoot. all the members of these korean bands are actually foreigners. she was waiting the taiwanese flag, but there were allegations that she was pro-taiwan independence. she had to apologize at the end. this happening just before the election. people saying this is what led people to go to the polls. rishaad: thank you very much indeed for that. coming up, china's slowdown and the impact on property in hong kong. we are talking to a developer. "trending business" back in a
rishaad: let's have a look at some stories making headlines around the world. indonesian police have 12 people in custody over last thursday's attacks in jakarta. a man died in the hospital saturday, taking the number of victims to eight. it was the worst of assault in the capital since 2009. police say the attack had links to islamic state and they've shut down more than a dozen websites that express support for their actions. a man has died and five people remain in hospital after being given an experimental drug in a medical trial in france. the victim was declared brain-dead after taking the drug developed by a portuguese company. it is designed to treat mood and anxiety problems.
french authorities are trying to contact other people who took the drug. the european militants agency says trials like this are extremely rare. winter has arrived in japan. snow forcing the cancellation of dozens of domestic flights, including 103 japan airlines. the carriers say at least 13,000 passengers are affected. japan rail seeing bullet train services experiencing delays of around 40 minutes. ski resorts have been struggling with an unusually warm winter so far. it was about an hour and 15 minutes ago we saw how the recovery in china's property sector is spreading to more cities. what does that mean for the market in hong kong? one man is incredibly bullish. he's joined by our very own david ingles. that person of coarse
joining me right now is the chairman of hang lung properties , to talk about just that, the property prices, the outlook, the industry in hong kong, and up on the chinese mainland. we just got the latest housing data out of china. monthly data typically moves here and there. you have to look at trends. do you see this downtrend ending this year? >> i'm not sure if it should end. the prices have been so volatile , as in many developing economies, that for the first time, i see that china's residential prices have a chance to have a more healthy development. i'm very encouraged by how healthy the residential market is. david: but they do have to run through a fair amount of inventory before you get the pickup in inventories, correct? >> that is part of the problem, oversupply.
to work it off is something that is necessary. for the real estate market itself, i think it is getting healthier and healthier. for the overall economy, that's another story. real estate affects roughly 20% of the whole economy. when there no new construction, it hurts the overall economy. the industry itself is the healthiest i've seen in years. david: mainland market, hong kong? kong also is as healthy as i've seen in 20, 25 years. david: and this is despite a lot of analysts saying this could be the year that prices could fall 20%, 30%? >> for hong kong real estate prices to fall 10%, 15%, 20% is not a big deal. but if the analysts are right, they would be very wealthy by now. david: i want to talk about your business in china. residential aside, commercial
leasing. you have a few projects coming online. rent has been under pressure for various reasons. is it safe to assume you are still on track to open these projects? huge just soft opened a shopping center. we are actually moving forward. that said, you are correct that prices have been very weak. there is negative reversion pressure. that is the overall economy being weak and high-end retail in particular. we have a triple whammy. in the longer term, that market -- if anywhere in the economic world is sure, it is going to be consumerism in china. that is what our shopping center is about. in the long run, we are ok. of people are concerned over the short run. in your business, what are we
talking about, shanghai, shenzhen? >> beijing and shanghai will always be good overall. though it will have ups and downs, ups and downs may not be as much as in the second-tier cities. most of the second-tier cities are hit pretty hard. david: later on, you will be chairing a panel discussion on the opportunities, a very broad topic. you have to head to some of the biggest banks. you have the richest businessmen in china. what do you want the audience to take away from this? >> first of all, i'd like to hear how these leaders, whether from government, from banks, or from the private sector, how they see the overall economy in china. forget about investment opportunity. you first know about where the economy is going.
then we can talk about opportunities. there will always be opportunities. anybody who brags about that economies is not deserving of winning in the business world. when the market is bad, there are other things to do. hugger.ame is bear i love the bear. let the market go to hell. it hurts my competitor. it doesn't hurt me. there are plenty of opportunities in bear markets. never waste a bear market. david: you have to have a very good product to stand out in a bear market. do you think you have the best product in china? >> for me to say is a little bit self-serving. but i think most of the market would agree that the shopping centers that hang lung builds are the best in china. there are a few others that do good jobs, but we are always the
best in the location in the city that we choose. we will be resilient. hardware is more important than software in commercial real estate. david: gdp numbers are coming out tomorrow. numbers?lieve the 6.5%,t matter if it is 6.7%, or 7%? >> the assumption is that it is lemon, but if you are comparing lemon every year, you are ok as long as you don't change the lemon. to me, it doesn't matter whether the numbers are good or bad. as long as it is consistent from year to year. obviously, it is slowing down and that hurts everybody. david: thank you for your time. have a good conference. numbers coming out tomorrow, maybe to some businesses it really doesn't matter. we will just have to wait. back to you. rishaad: thanks, david.
rishaad: this is "trending business." i'm rishaad salamat. let's look at what is happening in india, with the prime minister boosting the startup scene. it is designed to ease a host of rules for new companies. let's get the details and joined sun on the. very good day to you. >> good morning. prime minister modi concluding perhaps the largest conference on entrepreneurs in india, with the action plan that included new policies that would make it
easier for investors and start up founders. the biggest announcements included a $1.5 billion fund that you were just talking about. this will be managed by a board with private professionals drawn from industry bodies as well as several startups. there will be a single point of registration for startups and the government will launch a mobile app which will enable startups to register their company. the body will also serve as a single point of contact for registration and for companies to apply for schemes under the startup action plan. this last point was hailed by the industry as doing away with the present system of licenses, some of which have been in existence for 60 years or so. haveargest industry, you the likes of uber as well as softbank which handles this
2012. brent crude dropping below $28 about to reenter what is a saturated market. angie: a new era for taiwan. the biggest margin of victory since 1996. the new president needs to balance china relations while trying to revive a dormant economy. forced teenage singer is an apology to beijing. reaction to that and a lot more in this monday edition of "asia edge." i am keeping an eye on the state of play when it comes to asian markets. of green. we are seeing stocks in southeast asia continuing to