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tv   Asia Edge  Bloomberg  January 24, 2016 10:00pm-11:01pm EST

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gold -- seeking safety. angie: coming up this hour, negative numbers. millions more recalls, and the akata share prices are near a seven-year low. our company meeting could decide the fate of the company. field inns a crowded autonomous vehicles. they're hoping to beat google and tesla. turn and burden. google is moving executives and shaking up the board. those stories and more on the monday edition of asia edge . yvonne: today, the global rally continues on monday morning.
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the shanghai composite is up close to 1% right now. see more ofnuing to a rally in hong kong here, despite very cold weather here in hong kong. we are getting trade numbers, early from this morning. the trade balance is back to black. don't be fold. fooledexports and just -- don't be fooled. we saw exports falling. what a loss. exports have really grown. helped in yen december. most are saying this trade balance has narrowed annually, compared to the record we have seen. it has fallen about 80%. again, people are saying commodity prices are slumping more than expected, which is why
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we are saying this narrow. in the past, year to date, if you continue to see it here, i have strength of 1%, a reversal to call for the weaker yen. doj to move. the we have heard from harry corona that that might actually happened. i want to end on gold. that is the new safe haven. it is going to stay up 3.7% today. we are going to break that 1100 mark. people are looking at this once again. oil is front and center. it is fluctuating under $30 per barrel. --$32 per barrel. record bearish bets.
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heidi is here with me now. is still down by, what, 12, 13%? heidi: more than 10%. this hasn't really changed, just in the last two days, and i eeing we are really s investors trying to work this outcome a lot of fundamentals haven't changed much. number of analysts are saying that when it fell under $30 per barrell, it wasn't expected. it was bigger than their wildest expectations. have, of course, on the opec side, ecuador and venezuela proposing out what quotas. rishaad: not for the first time. haidi: not much success. rishaad: but with all this movement in place, is it enough
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to really get around this record bearishness we've been seeing? haidi: you would imagine not. the fundamentals remain unchanged. oil rigs came down a bit in the u.s. last friday. the world is still producing 2 million more barrels of oil than it requires. we have the iran situation. 5000 more barrels are coming online. create downside pressure when it comes to oversupply. bank of montreal's studio says montreal's ceo says that this downward trend could continue.
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the market needs to remain cautious. the internal entergy agency says the world could "drown in oversupply." rishaad: may be overstating that. [laughter] shanghai index has doubled about 17% so far. ubs says the flight is not yet over. a ubs economic advisor says the index will drop to around 2500. that's another 14% percent from current levels. an eventual rebound will not be vigorous. japan's biggest bank is putting more focus on the trade finance business. there recently hired for bankers frommpetitors, including hsbc. wants to be one of the top five for international commerce by 2020. the chipmaking business is still up in the air after the nikkei report says it thinks about selling the memory chip business to raise capital.
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the company has no choice but to move forward with the spinoff. toshiba has announced it has yet to make a decision. fell takata has shares tumbling the most in three months, because of another death now linked to the faulty airbags. the recall will include millions more cars. we have bloomberg news auto goodell joining us now. it seems like the pain is only intensifying for takata. greg: this latest of element involves millions more vehicles being recalled, involving takata your back and fighters. this death that occurred in december in the 2006 ford ranger will continue contributing to this perception that every time there is an accident in the katacle in which ta
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airbags are installed, there is anrisk, and unacceptable-- unacceptable risk of serious injury or death. this is going to lead to millions more recalls. what you are seeing here is more drastic reaction to an all-too lopment involving a desk. enthnnessee death-- a t death in the u.s. alone. 5 million more airbags will be recalled from several manufacturers. rishaad: also, making headlines, in japan, takata's future. what can you tell us? greg: there were a couple of reports over the weekend, locally and in japan,
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involving another airbag inflator maker. takata is in talks about supplying airbag inflator's, together, going forward. and ave already seen trw couple of other airbag makers step in to make sure that airbag replacements are made to a satisfactory speed to get these recalls they can care of.-- taken care of. takata says nothing has been decided yet. daicel confirms that these investigations are going on. takata has been going to automakers, asking for assistance to weather the crisis. they again said no decision has been made there. this is a significant storage watch because they will not be able to shoulder this on their own. rishaad: how does this impact a
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car makers meeting later this weekend? -- week, then? greg: this is an exclusive story. the meeting that has been called with honda and nissan, they have been invited. the amount of detail we have around what will be discussed is limited to just the fact that it takata'solve tr future business plans. will see whether that plan does, in fact, involve going to the carmakers and asking for support. number of vehicles is so massive that takata need substantial help from the carmakers to get involved in the spirit we were talking about-- involved in this. we were talking about 19 million vehicles before this. number that takata
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cannot fund by itself. angie: survival is in question here. what else are we looking at? asiae: if you break down sector by sector, oil is the big winner. we are floating around the $32 per barrel mark right now. right now, the basic materials are up 2%. look at the leaders here on the regional benchmark, up about 2% right now. we continue to see this rally right now continue. petro china seen a crack there, rising 5% on both of those --
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there,hina sea right rising 5% on both of those. the china morning post says they might be scaling back on expansion plans, citing labor disputes. sources-- china resources is the biggest loser here. cuts tok, it was the underperform for macquarie. after the sales data came out last week, it was mixing estimates. fall at 5.8%.e to japan tobacco, this one is a gain on the nikkei. they will be raising prices of certain brands of cigarettes. pack, potential rates
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on april 1. they're rising 5.6%. biadud: coming up later, is in the race-- baidu is in the race to make a self driving car. and, the new decision from the federal reserve and the bank of japan. "asia edge" back in two minutes.
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>> these of the headlines from around the world. 20 people have died in the blizzards that have paralyzed the eastern united states. many saw three feet of snow, and central park in new york at its biggest 44 hour snowfall on record. canceledway shows were for the first time since superstorm sandy in 2012. east coast airports resume
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normal service today after more than 12,000 flights were canceled over the weekend d. a large chunk of metal that washed up on a beach in thailand could be from a plane. isre is speculation that it linked to the missing malaysia whiches plane, disappeared over a year ago while flying from kuala lumpur to beijing. it is suspected to a crash in the southern indian ocean. the piece of the plane has been identified as coming from the plane. economyttled japanese minister has apologized for what he calls "causing trouble." amati says an investigation is underway -- a mari says an investigation is underway and apologize for causing trouble. he took more than $100,000 from a construction company over a.
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of three years -- over a period of three years. 150 bureaus around the world, from the bloomberg used for -- bloomberg news room, i am shery an. rishaad: we are nearing a trough in market prices. angie: the u.s. dollar is nearing its peak, then. the 300 $40 billion overseas would be good for the u.s., right? >> if the dollar peaked? yes. it has been up a lot of the last 18 months. we think the dollars probably in the process of making its peak. commodities are in the process of making a drop. rishaad: they play off each other. bob: exactly. tell us about what is -- rishaad: tell us about what is
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going on market wise, how the sky is falling in. --isn't falling income is it falling in, is it? wil -- takee chair the story of the chicken who felt a rock fall on its head and thought the sky was falling. they are worried about the collapse of oil prices. the junk bond markets. we think, at least in china, a huge devaluation is not ahead. i know the markets worry about at least a voluntary -- rishaad: so we have been told off for using that, haven't we? bob: that is what people think. there are some sort of large depreciation ahead, either voluntary, because china is trying to support its beleaguered industrial sector, or involuntary, because they
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lost control of currency in the financial market. we don't think that is right. china announced in december it was going to peg to a currency basket rather than the dollar. the dollar will rise against the yuan. but, the yuan has been stable against the basket for months. areaadangie: a lot of people questioning how much more we can see that intervention. will we eventually see a much lower level for the yuan? yuan versus the dollar will weaken. 6-7 over the next two months. -- few months. if the market expects it, there
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will be a lot more currency, a capital flight to get out of china. i think they will keep their controls restrict. -- controls r strict. rishaad: everybody wants stability. what is the method to iron a o iron it out?on it bob: we will probably see another relapse, maybe sometime in february.- if you look back at inflation, ingested oil prices,-- adjusted prices, there have been three times since 1861 that oil prices have dropped as much, and that's it. angie: we are wondering whether
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consumer gason prices has increased spending. bob: we are seeing it in some ways, but overall, not the boost we would've expected. we would've thought we would've seen 3.5% growth in consumer spending. i think consumers are cautious. the financial crisis was so severe. neighbors lost their jobs, their homes. i think that has made everybody really cautious. lending is going up. gonsumers are keeping spendin within the increase and income. angie: hang out with us. coming up, twitter. twitter is looking to spread its wings with the help of new management. angie: flying the coop.
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edgeird, when asia returns. ♪
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angie: we are hearing there will be a new shakeup in the senior ranks of twitter. got juliet with all the details. we are tweeting away here. what are the details? juliet: yesterday, for key executives the head of , fine,ng, engineering and jim webb has been interviewing for a number of jobs for weeks. they have been selling off stock, knowing they are on the way out.
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first major exit we have seen since jack dorsey resume to the reins of twitter last year in october. also topic there is going to be too newborn levers. if it dide shocking not reflect the diversity of the board. it should be at least one woman and a person of color. executives really need to have paid for their stock. as we know, twitter share prices have been absolutely hammered over the last 12 months. speculationt of that the executives have not been doing their part to turn their fortunes around. the twitter share price is down 55.5%. stanton is also leaving in the face of other executives. angie: any word on its own social media platform? uliet: we've been watching for
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tweets from @jack. nothing so far. if you look at rich greenfield, he had quite an interesting tweet. he is saying, "look, more than six to percent of the executives 60% of the executives are gone." there are rumors that stash could be joining the board. he is not. at this point, "change can only be good." a youtube commenters saying, "twitter has lost three the stock is down as growth, is in freefall -- it is in freefall." another executive is suggesting we should not worry too much about who is at the helm of twitter. it can run itself.
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"don't over monetize it and let users do what they want." that is or is giving jack dorsey a little advice about how to run the company. i'm sure we will hear more. there was a little bit of a spike in the twitter share price on friday, but at least for executives are on the way out and some board members, including maybe a high file media personality -- profile media personality. angie: i will take to twitter and let you know. think you so much. rishaad: green everywhere right now, looking like a 1.5% gain. there is in sydney, kicking it out itself, just taking a look here, and yes, green. about 1.5%. we are extending these gains that we have had out there in the last few days. we have had bets that the central bankers in europe and in
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japan are increasing stimulus packages. it is a very cold one here in hong kong. 1.9% up on the hang seng. the japanese will reopen right after this very short break. ♪
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angie: you're watching "asia edge." engine stocks extending a global rally. chinese fuel and coal producers are gaining after beijing pledges cuts to overcapacity. more stimulus may be in the pipeline. oil has been fluctuating today but still trading above $32 a barrel. crude still down with an 13%
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this year on concern over brimming u.s. stockpiles in the return to exporting. the long-term downtrend remains in place. a cut a has fallen to seven-year lows after u.s. regulators said millions more vehicles would have to be recalled after a 10th debt linked to faulty air backs. there already called 19 million vehicles. honda has been invited to a meeting friday in which to caught a will address its future business plan. takata will address the future business plan. vonne: all across, green. shanghai up. continuing to see gains of 1.9%.
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still a leading most of the gains in the regional benchmark. we continue to see a lot of hedge went in the china market. the slump in chinese stocks is said to be not over. the rebound after that slump they say is to be mutated. -- muted. we haven't reached a bottom yet. it was closed at one point. now we are seeing a bit of a loss as we head into that meeting later on this week and balanceee that trade back to back but after we saw exports and imports fall much more than expected. take a look at the movers in japan -- asia, in particular. product in hong kong rising 2.5%.
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there have been concerns over the european luxury market in terms of the long-term aspects as we continue to see china's economy slow down. thea note out saying outlook is not as pessimistic as some might expect. the chinese are surprisingly positive after the big stockmarket drop last summer. this reassuring the recent volatility we have seen and it shouldn't be a big impediment on shopping. we may see chinese chapters heading to europe to buy those product that. this is a five-day day game, the longest winning streak we've seen. in terms of the shopping stocks, looks like people are shopping today. you.: thank while the market rebound has been the main topic of
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discussion, after a second day of gains in asia, we asked michelle if equity investors can breathe a sigh of relief. volatility -- will we see volatility peak. we see the markets coming back i gohere we see the hsc back to 9000 and the next couple weeks or months. onre staying focused long-term tailwinds we think are strong. angie: but not everyone agrees. says they will remain bearish for the rest of the year. -- marketscoach could see a rebound. you had the doj coming out to say they couldn't do any policy adjustments as necessary. mario draghi came out last week. later this week, you have the
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fomc coming through. in the short-term, we could see some rebound but longer term, we are quite bearish on equities. capital dynamics ceo says china is not what investors should be worried about. earlier, he said the real danger lurks in the u.s. >> i am more concerned with the shanghai stock market in terms on the global economy. the shanghai composite could drop back to 2002 and i think the world economy would still be where it is. what worries me the most is the and there's nothing the federal reserve can do. dropsu imagine if the ny
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20%, what is the federal reserve going to do? rishaad: what can they do? >> they can't do anything. angie: that was the word from asia. rishaad: call minors and steelmakers are rising. large-scale cuts. it's all about overcapacity. withhave to get to grips it. the question is how they do it. >> misses some of the expected supply-side reforms that will be painful in the short term but good for these industries. coal and steel production facing overcapacity. council meeting friday. the government website published the results of their findings and orders. steel production will be further cut by 150 million tons.
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no timeframe for that but they are saying they will strictly control still capacity increases and halt new coal mine approvals. this is having a positive reaction to the stocks. without 8.2%.y, capacity reduction targets are not aggressive but still helps rebalance the steel market basically because of the overcapacity, the utilization rate has fallen. china coalt guard, and energy have been battered down. tickets he large-scale reduction in output.
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good things for the short-term but there will be some pain here. >> it doesn't sit well with the preferred goal and aim of job creation. >> also showing some sign of momentum slowed down. there are some headwinds given the slowing pace of the economy and these old industries as they cut the overcapacity and jobs. there's a statistic saying the gdp to grow 6.7% to create those 10 million jobs a year. it's expected to grow 6.5% so there will be some problems. if they cut some jobs in the older industries, which they probably need to do, if they cut the industriesn
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that have overcapacity, severe overcapacity like steelmaking and coal, that would cut about 3 million jobs so they need to find these jobs elsewhere. much.d: thank you very let's take a look at stories making headlines. with china emerging as a big winner driven by down falling demand. the falling price of oil and other commodities helping that heating cost come pushing down -- cost, pushing down prices. saudi arabia says it is considering all options when it comes to potential ipo.
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saudi arabia has chosen to keep production high, abandoning output limits to defend market share ahead of price. angie: singapore's offices are increasingly sitting empty. foreign banks continue to cut staff. with new supply sucked to come in the market. i guess it's good if you're looking for lower rent but how bad is this problem for singapore? >> it's getting worse. it's still too early. havegn banks in singapore 550 thousand square feet of excess capacity. despite that, we can expect more capacity to be added this year. a 38 story building will open later. you have to ask who will fill it up. >> in singapore in the office
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market at the moment, we have supply hitting the market for the second half of this year. at the moment, we see demand moderate. we do expect the brands to weaken further in the market into the early part of next year before things start to stabilize again. shrinking.s are barclays expecting to cut at least 1000 jobs. asia will not escape either. when you look at things with office rental index, it's not surprising to see the biggest annual drop in six years. this will stay for some time. angie: is this reflected in singapore? >> you bet. if you had invested capital and you would have lost
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money. lawsuits are between 20% and 30%. i want to point out something here. six point 5%.s pretty attractive yet fewer people are interested. they say it's like catching a falling knife. not looking good. angie: and nobody is in the pipeline to pick up those leases. thank you. rishaad: coming up, the world needs a new driver of growth. where would it come from? we're putting that question to him.
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angie: welcome back. the vietnamese coming this party has decided to give it general secretary a new five-year term and what would be a setback for the outgoing prime minister. he is seen as a conservative and his reappointment signals a possible move away from the reforms instituted. he leans more towards the west and is prepared to stand up to china. the life of a missing hong kong bookseller said she saw him saturday at a guesthouse and mainland china. them hery she told husband is healthy and assisting an investigation as a witness. -- them hisive him exact whereabouts. he is the fifth missing person went to a bookshop that sells
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literature critical of china's leaders. thousands of people rallying, calling on malaysia to reject the transpacific partnership. lawmakers are too old is special sitting of parliament in this a free-tradee agreement. the protesters fear the bill could damage local companies and drive prices higher. the government says it will increase competitiveness and open up markets for malaysian exports. global news 24 hours a day powered by 2400 journalists around the world. angie: welcome back. chief global economist at principal global investors. now, there isight a disconnect when it comes to american equity investors and what's actually happening in china?
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think there's a lot of lori about what's going on in china. u.s. investors are long way from china and there's really a lot of lori. china has slowed dramatically to 7% growth. is a real concern about growth slowing. >> how far do you think this could spread globally? could we be entering a global recession at some point? it seems as though the mood music has it changed. >> there's a lot of lori about a global recession but we think in some sense, it's global redistribution. china and re-emerging markets fast for a really long time but now i think it's being more balanced now to developed countries. europe is doing pretty well and japan is coming back even though it's just barely out ever session.
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juliet: is that when you say you are looking for a new engine of global growth? should we look to japan now? >> add-on will about an engine of global growth. for a long time, it was an increase in debt. consumption from the future to today. growth is faster than it would have been. there has been a sizable buildup of debt in china. once you get that to a certain level, it will not grow as fast so i think we are in a situation where global growth will not be as fast as it was. that just means slower. if the economy were a color, i'd collate beige -- i'd call it beige. it's just not wildly exciting. i think the engine is there, it's just not going to be the 5% growth we had in the u.s..
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it's not going to be the kind of global growth we've been used to. >> how concerned are you about the systemic risk when it comes to the debt overhang in china? >> i think there is a problem with that in china. in the u.s. and europe, we've been through our financial crisis with businesses laying off people, raising cash. but we've recapitalize the banks and now the chaos of that recession has come on expansion. a similar thing has happened in europe. in china, a tremendous boon for 15 years. those built up imbalances and in terms of too much debt, colossal overcapacity. those issues need to be faced at some point.
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say thate we able to still when the federal reserve is the owner of the biggest debt, the buyer of u.s. bonds. all this action we have seen over the past couple years, how is debt not going to be an issue for the central banks? >> the debt you are referring to is government debt, 100 percent of gdp. held by the public, it's about 80% of gdp. ,f you look at private debt it's come down dramatically about 50%. household debt has come down. business debt has come down. the private sector is not nearly as in dead it as it was in 2005. rishaad: are you saying
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americans are learning to live within their means? >> they are. angie: but that's the problem? >> long-term, it's a good thing. short-term, it's a problem. you are growing more slowly but you are setting a better basis for future growth. these big games coming through in chinese equity markets. retail investors have been panicked when they see the markets start to tank. in australia, no recession since 1992. that's an entire generation that has not experienced a crash. sure -- the i'm not chinese stock market is different than other countries. it is driven more by public sentiment and momentum rather than a direct connection to the economy. in australia, clearly, i would think investors there would be interested in our potential in other parts of the world.
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australia it is a commodity-driven country and has been for sometime but it's doing remarkably well. the job growth has been pretty good but i would think there is more opportunity and equity markets in the u.s. and probably thanrope and japan rather the emerging markets in countries dependent on exports to emerging markets. angie: by 2016, are we going to see a recovery in oil? what are we going to see? >> i think we will see a recovery in equity markets. improve.or earnings to we think we will see a 5% earnings growth this year. the fourth quarter earnings as we go through the season may surprise people on the upside. growth, aearnings single digit growth from the end of last year, 20% up from the that's we think
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reasonable. the u.s. economy is resilient. consumer spending is robust. the job growth is fantastic. it's hard to see a recession in the u.s. this year. angie: we might see some rate increases on the heels of that. you are from where it all kicks off. >> iowa. rishaad: looking forward to going back and seeing what's going on? >> i will miss the caucus but i will certainly be reading about it. angie: thank you so much for that. stay bundled up. coming up -- rishaad: move aside, google. the driverless car race. is thelocal knowledge key. details coming up. ♪
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rishaad: china coming back its support of new energy cars. angie: it is lowering subsidies by 20% in may switch to a california-style point based system. some say automakers are too dependent on aid. rishaad: they're hoping their advances in artificial intelligence will give them an edge in developing wireless cars. angie: china is a newcomer to an already crowded field. google has been on the case since 2009.
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>> and thinking i won't need to learn to drive a car anymore because we will have driverless cars soon. bydu plans to have these cars within chinese cities within three years. they are working on this auto bring system and they're putting that in these electric cars. this software package is for him deserving the environment and decision-making -- observing the environment and decision-making. they are going -- they are actually pretty confident they are going to excel in this field.
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got makingcarmakers cars 100 years after others and with electric cars, intelligent cars, the technology shifts from the engine to artificial intelligence. not an area where china is very close to the u.s. and gives china a chance to catch up and take leadership. >> the auto bring system at the core of the technology. angie: significant is a software package. >> we have so many people in this field. google having already tested these self driving vehicles for more than 2 million miles. tesla, gm. by consulting group saying 2025, we could see fully economist vehicles after some more developments seen like urban autopilots and self parking.
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baidu does have a lead in that it knows china's roads better. angie:
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>> cold plasma sub d is the first of its kind treatment to the area on your body that can age you most. posted by courtney thorne smith and featuring some of the most dramatic before and after photos you've ever seen. >> hello,


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