tv Trending Business Bloomberg February 9, 2016 9:00pm-10:01pm EST
claiming the bank laundered billions for the cartels and should be considered responsible for u.s. citizens they murdered. this is my handle -- @rishaadtv. we have, of course, the lunar new year. shockedhong kong both -- both shut. markets -- >> we are now seeing the nikkei 225 down by nearly 2%. closes at these levels, or even if it closes down by 1%, we are going to see the asx 200 down more than 20% from april 27 of last year.
jakarta is coming online and joining in the selloff that we have seen. malaysia continuing to be sold off. it had a positive start but it has been continuing to pull lower. singapore not doing as badly, but still off by 2%. the philippines also weaker. we have a look into the asx 200. mining and tech stocks are driving those losses. computer shares also off by 8%. the big losers in japan as we head into the last half hour of the morning session. we are seeing quite a bit of weakness coming through from a lot of stocks, down by almost 18%. the selloff really broad-based across a number of industries. the yen continuing to strengthen against the dollar, pushing past
116 to the dollar. it actually did that overnight. is the first time in years, holding at the 114 spot. of course, a continued flight to that safe haven gold price. in 2016, hisp 12% best start to a calendar year since 1980. 1193.88.at $ the flight to safety haven and the bell out of equities. rishaad: the antiestablishment candidates donald trump in bernie sanders making the headlines for the first primary of the presidential race. sanders winning the democratic battle and trumps seemingly on course to do the same thing for the republicans. let's go to manchester, new hampshire with craig gordon. craig: a remarkable night here.
on the republican side, a billionaire businessman. on the democratic side, a democratic socialist in bernie sanders. both winning, actually by tapping in to some of the same voter anger. there was a feeling of any citizens here that the system is stacked against them. two. night for those rishaad: talked to me about bernie sanders. he was expected to win but it is just the margin of victory. do we know anything more about that? >> i think we're looking at 10, 12, 14, something like that. a pretty embarrassing finish for hillary clinton. she won the state eight years ago. a secretary of state, a senator, one of the most famous people in america, almost in the world. and yet, she is having a pretty embarrassing night, so much so that her campaign had to put out a memo to supporters to say call
down, is a long race. fiesta get some -- she has to get some w's on the board and quick. rishaad: donald trump was projected to win. i think people will be looking to see who comes in second here given what happened in the first debate. certainly, marco rubio was declared a loser. craig: we came here from iowa, where marco rubio had a strong third-place finish. we thought we might be seeing the makings of a donald trump first marco rubio race. he got roughed up by some of the questions and right now, we're looking at a third, fourth, possibly fifth-place finish. a guy named john kasich, who is the governor of the state of ohio, looking to have a very big night. looks like tonight is going to pay off for him. rishaad: thanks a lot for that.
to tell you about what is going on when it comes to the trading day. the commonwealth bankshares on the way out. slightly better than the expected profits, at least on a cash basis. let's get over to sydney. >> cash profit for the first time of 4% for commonwealth bank, $4.8 billion australian. it did exceed analyst expectations. the dividend will remain at 98. this was old was driven largely by growth. a couple of dark patches. the net interest remained flat. some analysts expected a little bit on that front. of course, the regulatory
framework has changed. banks are being retired -- being required to hold more capital to protect against future shocks. commonwealth bank has increased their capital by 100 basis points. commonwealth currently up three quarters of 1% but it has cooled back a lot. contextt into a broader , commonwealth bank is huge. it makes of wearables 9%. you can imagine just how much worse it would be for this frog -- for this very strong commonwealth bank result. rishaad: thanks for that. a look for what is going on at sharp. they still need to make up their minds as to which they -- to which way they would go. click a proposal to buy out
sharp could see the creation of a new smartphones will point his company. about $2.5 billion into sharp, which would be used to buy other domestic appliance businesses. displayliquid crystal installations would be combined with incj displays. worth $8.5t is billion. sharp says negotiations with both parties are continuing and a decision will be made at the end of the month. it is just six weeks into 2016, and goldman sachs telestrates with volatility. of bank has a bed at five six recommended so-called top trays for the year.
three of its topics within the first month. one trade still remains. of 50 emerging-market bank stocks. "the force awakens" helped lift studio earnings by 86%. revenue was up 14%. however, it seems shareholders focused on the espn sports network. rise while costs subscriber numbers fell. investors are watching to see if can write this. rishaad: still ahead, how a mining company is planning on taking themselves out of a commodities slumped. yen is the strongest
>> these of the stories making headlines around the world. a 17 story apartment complex brought down due to the taiwan earthquake. are expected with criminal -- are suspected of criminal misconduct. about 100 people are still .issing 530 people were injured in the quake, which measured 6.4. at least 10 people were killed and 80 more injured when two trains crashed head-on in southern germany.
the two trains were scheduled to pass each other at a nearby station where the attractive i. -- where the track divides. the failsafe system was supposedly supposed to stop the trains. officials in the u.s. say the satellite launched by north korea has stabilized in orbit. it is nothey say thought to be transmitting any data back to earth. washington also says that the andh has expanded uranium richmond and restarting its plutonium reactor. the director of national intelligence says that its facility could produce weapons grade materials within months. powered by over 2400 journalists and 150 bureaus around the world, for bloomberg news, i am david inglis. it would seem extreme risk aversion to the market while 10 year japanese bond yields fell.
of asia rates at bank of america. it has moved so quickly. these things come back just as quickly, do they not? >> they do, but again, we have to look at what is driving this move. as we pointed out earlier in the year, and our yen strategist pointed out, we believe there is a risk at 115 that will be tested. the market is saying we had a contradiction here in terms of quantitative and qualitative easing in japan and the negative interest rates. the risk is that a negative interest rate will mean that banks may be reluctant to sell boj. jgb's to the and we won't get an expansion of
money supply. yes, the negative interest rates are meant to help drive money and the yen weaker, but at the same time, it may have a contradictory impact if the japanese banks say, why would i sell in exchange for a negative interest rate? that kind of limitation has really troubled the yen. we think the downside risk is to 110 now. 65 right we are 114. now. does this mean that we have got a lot of the resistance points taken out? i would say so. i think the risk here is that that certainly has an impact. it doesn't help, of course.
the concern, and we have heard it from the european central banks calling from the g 20 meeting in shanghai to kind of reinforce progrowth policies and prevent any kind of suspicion of beggar thy neighbor currency devaluations, talks to a wider concern that policy is a .esponse to the yen weakening and subsequent to the boj negative interest rate, what we are seeing is that the renminbi, in the currency basket in the foreign exchange division of the central bank, is actually a fresh low, it has broken below 100. the wider concern is this is leading to potential devaluation , and that is kind of amplifying this risk of sentiment. rishaad: it is not actually individual currencies that are trying to get themselves weaker.
what is fundamentally behind all this is the weakening dollar. perhaps it weakens further. that may be the chief takeaway still from that jobs report on friday. >> i think the only thing that seems to have been effectively working for the past couple of years is the depreciation of currencies. we saw how the yen helped to lift inflation expectations and how that was in the united states as well. yes, you could say that it is not necessarily quantitative in the extent that it .s driven by fundamentals so, we are getting this concert on the u.s. side that it is not just weakness in manufacturing, but it is also weakness in the services sector. still, fundamentals of what
drives policy is to try and ease monetary policy significantly and indirectly depreciate the currency. they are all interlinked. rishaad: i want to move to another country, and no country spent more. the chinesele that are stopping it from falling too far, and rifling through their currency reserves at an astonishing rate. of 99.5w a drop down billion in january. that is on an annual pace of over $1 trillion. you may think you're looking ok at that 3.2 trillion, but it again describes a point in the market where it was was described as bulletproof and is actually proving to be week.
it could be around 2.7, 2.8 trillion. plus, we are not so sure where will be holding in terms of short positions in the pboc's forward book. onare facing more pressure the renminbi even though the numbers had come in better than expected. it is the pace which is more important. this pace, it seems that it is toder and harder for china try and target a stable currency. to depreciate further as we get into late february and march. rishaad: have a great lunar new year as well. hsbc is being sued again, and this time it involves drug gangs and murder. ♪
rishaad: you are watching "trending business." hsbc is being sued by families of u.s. citizens murdered by mexican drug game. our legal teams that does this from new york. a new legal -- theory here, which has been applied elsewhere to terrorism in the middle east. the lawyers are basically arguing that, under the antiterrorism law, the drug cartels are terrorist organizations, and therefore, the banks that helped finance their operations can be held liable. a novel legal argument. are they seeking in terms of the
value? >> the have not put any dollar value on this. however, based of the other legal claims i have read for actions involving iran and middle eastern countries, i would expect it would ask for at least $100 million or several hundred million dollars. >> can you tell us why this is being filed in texas or parts of new york? texas is right on the border with mexico. i presume that the reason it was filed their -- first of all, one of the victims was from that town. second, the judges from that circuit would be intimately aware of how brutal, how violent, and how terrible the damages that has because by the mexican drug cartels. as opposed to new york where there isn't any direct knowledge
, judges would be very much aware of how dangerous these organizations are. let's have a look at some of the other stories making headlines. a weeklong shutdown. introduction -- the explosion last month at a factory leading to a shortage of steel at this assembly plant. daimler is recalling about 840,000 vehicles to fix potentially defective to cut the airbags. daimler saying that the recall will cost about $384 million and would cut into its profit they announced last week. widened airbag recalls following the latest fatality linked to products. down 3.5%.
concernsbank facing about its risky is death. contingent convertible bonds. >> it is going to be hard. i think they can if they're willing to pay 300, 350 basis points. i think they're going to try and navigate that. >> the degrees of freedom that they have, they have a lot less here with the stocks coming down yesterday. do you have your head a price point where deutsche bank has to go to ecb? >> etiquette is important that we will have a real test of the capital structure. in the old days, it was equities, bonds, and deposits.
the threat was always that you get up there too quickly. it is to have a cushion and make sure the loss doesn't migrate up that quickly. is thing that encouraged me we are seeing differentiation in europe. trading, but ubs is only at 86 basis points. >> when you think about deutsche bank and these cocos, we are going to be ok for 2016, but then we have 2017. we have long-term issues. think that is a really good point. ubs are ahead of the rest of them in this journey. it will take deutsche longer to get there.
they have to get their risk-weighted assets down. their privateld client services business in the u.s. while every other bank is making a push, saying private wealth is where we will see cushion and growth. what is your growth strategy? >> i think georgia felt it was difficult to be in wealth management in the u.s. and probably thought it was better that raymond james was in it. think deutsche is pretty sound, actually. at the end of the day, as you quite rightly say, it is a german national icon. up next, retail therapy. china's growing middle class. plus, of course, a market check.
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♪ a look at our top stories. the antiestablishment candidates, donald trump and bernie sanders, looking set for sweeping victories in the new hampshire primary. trump is the projected winner in a crowded field with the republican john kasich in second place. sanders with a clear victory over hillary clinton, meeting at the democrats could be headed for a long nomination fight. of a new the creation
smart home appliances company. a cash injection of about $2.5 billion. #'s a decision will be made at the end of the month. shares down by more than 6%. into 2016,eks trades sachs's top falling in the market. abandoning five of six of their top trades of the year. fourth out of three of its topics within the first month. juliet is not in a look at how badly they were off. it hasn't been a great morning for japanese indexes or any of the markets in our region that are open. we still do have a lot of the markets closed. the japanese market closing down.
2.4%.kkei 225 down we have seen a lot of the selling coming through from the mobile stocks, and also coming through from a lot of the banking stocks. the worst performers along with mitsubishi. in australia, we're seeing weakness. they are holding on to 2.5 year lows. if we see the market continued it willat these levels, enter bear market territory. the selling continuing in new zealand in late trades. jakarta, pretty flat in its early session. certainly has been quite a lot of risk this morning. .ook at the bond yields the 10 year in japan, the yields below 0%.
we are also seeing the longer-term government bonds down to basis points to a fresh all-time low. certainly a lot of money going into those treasuries. it is the world's best performing commodity this year. magic?bout to lose its -- is it about to lose its magic? it has had a pretty good run. 12 hundred dollars at the moment. >> the best start of the year for gold since 1980. a seven-month high just on monday. about $1200 an ounce. this is traditionally the strong time of year for gold. monkey,the year of the so that is why we are seeing monkey shining with the price of gold.
index of australian listed gold producer surging to its highest level since may of 2013 before heading a little bit lower today. basically, the seasonal chinese buying trends create a about a quarter of the gold jewelry. if we look over the past decade, and look at the chart of just 2015 alone, that is pretty emblematic of the previous years. a sharp spike in january and then a dip in march. that is what seven out of seven , sayingts redacting that the gold price will likely take down -- will likely dip down. rishaad: do we have any lessons from the past? they should be an indication of what happens in the future. n: this year is different than last year.
we're going into an interest rate hike environment in the united states so it could expand those the clients. goldman sachs reiterating its december forecast. the prices will fall again, dipping to $1000 by the end of the year. the average estimate from seven economists is $1100 later this month. a little bit off from where it is now. fred -- if the fed decides to pause, the dollar weakens. that's are off again. it has tumbled the most in almost a year. 7.3% down. the japanese government-backed fund that is bidding for a rescue plan. they are said to be bidding on a smart home appliances giant. peter ahlstrom is in tokyo.
think this would perhaps be giving investors a little bit of clarity and light at the end of this tunnel, which is a really -- which is really a saga. peter: it is a long tunnel. bidders in the hunt for sharp. on one hand, the innovation corp., and on the other side we have foxconn, the taiwanese company who has made a very aggressive push. they offered to put about ¥300 billion into the company. as part of that, they want to build up the lcd business, which makes panels for smartphones, including apple. secondly, they want to start this smart home appliance business. sharpould be by combining 's 2 -- sharp's home appliance
business with several other japanese companies. the idea is that they would give this business an scale to compete globally. they would make investments to be able to move up the value chain to some of the more profitable products in the business. rishaad: what is the difference between the two bids on the table? as i mentioned, the first is offering to put about ¥300 billion into the company. foxconn is offering mormoney, about ¥660 billion. part of that will go into sharp itself and part of that will be used to pay our preferred debt that the company has. not all of that capital would actually go into sharp. they have been arguing to the sharp board that they offer other incentives. it is going to be able to get loans from banks and do combinations with other japanese companies. it thinks it will have an easier time collaborating with domestic companies. rishaad: we find out at the end
of the month, don't we? peter: that is the target. this has been dragging on for literally years. we thought we were at an endpoint point last week when the sharp board that. the idea now is that sharp will make a decision by the end of this month between the two bids. that is the goal. thanks --rishaad: thanks very much. let's take a look at some of the stories. recentadvantage of its slump with a buyback. now i do lowest in three years and tumbling some 22% this month. s chief executive declined to comment but says it makes sense to act when shares are cheap.
asahi looking to expand its verizon. it is just behind estimates. income at 4.7%. it may bid for sab miller brands. president quit after the company released a report saying falsified data were not covered up. they initially lost more than 5% on the news. a bit of a clawback taking place. salty, sweet. many items like the chocolate potato fries part of the mcdonald's japan turnaround story. the first four-year profit in
four years -- the first full-year profit in four years. it had to cut jobs after a series of safety scandals, including foreign objects found in food. >> we believe we have made good progress rebuilding our foundation. our customers are noticing and responding. 2016, is now, in build on this foundation, accelerate our recovery, and complete our business turnaround. lunar new year provides a chance for millions of chinese and others in the region to travel abroad and spend. has made a trip abroad more affordable. how long will this last? should be a very interesting time to talk about this. we have the surge in recent days. have a look at this.
it is a longer-term view of this explosion of tourists into japan. as you can see here, it tracks the number of tourists coming to japan every month. this is based on government data. mall operators, real estate developers, family-owned shopkeepers, largely set aside or ignore this static growth in domestic consumption. in fact, the previous outlet malls at a record year in 2015. to do top japan are your bloomberg, you get that story. we have gone from about 400,000. , overtest piece of data 1.6 million tourists every single month. that is largely down to the week japanese yen.
let me shift this around very quickly. have a look at how the yen has weekend. has gained in recent da, but it is much weaker against the currencies. you're looking at asia over the course of four years. have a look at this. hong kong dollar, that is the u.s. dollar. here is the chinese renminbi, up 45% against the japanese yen. south korea, the philippines, singapore. it is very important to talk about this, because not only is it cheaper to go to japan, when you get there, you are also exempt from paying that sales tax would actually pushed japan into a recession. that is that. why are we talking about this? i think what is ironic is this lunar new year had already been booked before the yen actually strengthened.
what you have seen since the start of the year just -- just give me a few seconds to tweak this. say, just from the start of this month, it has actually reverse course. the yen has gained against every currency in the world. so the cost of travel to japan is actually more expensive now. a little bit more expensive, but that would've likely pushed tourists to look elsewhere. it is obviously timely to talk about this because the yen has started to reverse course. have a look at this. the appreciation of the yen. let me just switch this. bear with me very quickly as i tried to type while looking. yen" on your bloomberg first story. have a look at this chart. appreciation has basically put the yen on the verge of breaching this lower and.
officers tried to stop unauthorized hawkers. the commissioner has defended police actions, promising what he calls resolute enforcement against any illegal acts. the u.s. supreme court has blocked a federal regulation to regulate emissions from power plants. backs calls from power companies and at least two dozen states to suspend the rule before legal challenges go ahead. the delay is likely to last until the second half of this year and cast doubt on the long-term prospects of the president's plan. in denver, celebrating the broncos victory in super bowl 50. was labeledre truck number 18 in honor of peyton manning. he wrote alongside m.v.p. von miller and the lombardi trophy itself. school officials allowed
students to skip classes for the parade as long as they are parents gave permission. news.s bloomberg on aus minerals in sydney. the company is undeterred. they are saying that 2016 offered a strong start, even if the gold rally drains away. they've also lifted their production targets. let's start out with his lift in the production targets for this year. the commodities complexly 20 comes to gold and copper has seen the worst of it? >> a very good question. i probably need to step backwards a step. the performance in 2015 has been
a record year of performance. to $480creased up million, which is an increase, making our margin well over 50%. costso brought our c1 down, making us one of the lowest-cost producers in the world. we saw the gold price and the foreign-exchange decrease. price had almost no impact in our business performance through 2015. the performance improvements have all come from consolidating the business and focusing on the fundamentals. i think we are very well placed in 2016. of copper and gold, very hard to say. we are very much focused on getting our fundamentals right so that we thrive during the downturn and the upturn. rishaad: i think goldman sachs
has a target of $4000. do you actually see the whole supply and demand equation working out so there is actually a deficit in the future -- a copper deficit in the future? >> a good question. the supply-demand fundamentals ir copper, my personal view, think the demand is not only driven by single countries or industries, it is driven by multiple industries, right from housing starts in china all the way through to housing industries and wind turbines and new trains. i love the diversification on the demand side. side, most copper mines across the wilderness and deeper, harder, lower grade. i think finding a good copper resources hard to do.
occur,hen that will tough to say. i think it is going to be tough for a while. rishaad: lots of cash on your balance sheet. what do use it for? do you require further assets or have they reached the floor? wires we seeing a surge in an &a activity?m andrew: i think the most important point of that question is that we do have cash on our balance sheet. in addition to that, we have zero debt. i think that is one thing that differentiates us from many countries. i suspect we're not seeing a lot of m&a activity is because those countries -- most companies can do it. they are overleveraged in struggling to put -- to make interest payments.
cash, a good strong balance , and no debt, in a market with many companies are expected to sell assets. i'm very much looking forward to taking the regulations of our board in february. i was going to bring up the mine you just mentioned. the market with this project at the end of the month. and you had discussions will you be selling a stake in that project, even if it is a majority one? andrew: one of the nice things about the higher grade options
that we are exploring at the moment is that we could fund the construction and operation of those scoping study options entirely from our cash balance and the cash flow it will generate over the coming years. we are in this position where we don't need a partner. having said that, we are always open and interested to see what people might want to do. but we would never sell any part or less than fair value. i think having a position we can develop ourselves gives us a lot of options going forward. rishaad: thank you very much for joining us. the chief executive for oz minerals. coming up, driving into a new market. luxury carmakers are looking to capitalize on india's growth. coming up on "trending business ." ♪
others, ared many guaranteed to turn heads when most cars are priced in four figures a set of six. carmakers are banking on a new market of consumers in india who are eager to show off their new wealth. >> basically, we have people who will want a luxury product. paul: according to credit squeeze, the number of millionaires in india is expected to surge 65% by 2020, to more than 300,000. with the growing pool of potential customers, automakers are also working on bringing down the price. volkswagen, mercedes, and audi have all worked to become more competitive. competition, a very competitive price.
you would see the price were july high, and now, not so much. paul: there was, perhaps, one other piece missing. -- thes the potion promotion from the auto show, and this was in mumbai. taking a luxury vehicle out to a span on india's notorious roads is a stern test of nerves, one which might also require a goldplated insurance policy. rishaad: that is it for "trending business." stay tuned, heidi joins me as we recap the big stories of the day. this is bloomberg. ♪