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tv   Asia Edge  Bloomberg  February 21, 2016 10:00pm-11:01pm EST

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a five bedroom house in hong kong sells for more than $100 million. it is deemed a "disappointment." we will look into that in this monday edition of "asia edge." >> things are looking pretty good. we are extending the gains that we saw last week. we are seeing the shanghai stocks really leave those gains up 1.65%. the hang seng is up 7/10 of 1%. i do want to mention that south korea exports have another disappointing month. customs office posted figures for the first 20 days, saying shipments fell 17% on the year.
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if the trend continues for the rest of the month, there is more likelihood of vacancy some moves see somehood we could moves. we are holding the decline that we saw on friday and a drop of the before -- drop of three or 4%. we are seeing brent as well searching at about 1.3%. $33 per barrel. not much given that output free stock. remainsnd demand still unclear. ?ngie
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angie: debt levels could get into dangerous territory in a lot of people's opinions. sure joins us. what do analysts expect in china ? y: china's debt will not speak for another four years. they see the ratio increasing to 2019. to peak at expected 283% of gdp. this is a delicate balancing act. they are keeping credit slowing to help the economy, boost the economy, to around the 6.5% expansion. it is not too fast to trigger a credit blowout. at this graph, the state of -- -- look at this graph, this data is showing new
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loans just surging starting up in the last year. goldman sachs says it is impossible to identify a specific debt-gdp level that would tip the crisis. the fact is that china's debt is soaring. it is the highest in recent history. an economic slowdown for a. period of for a time. >> have good have chinese companies been at reducing debt? shery: the problem lies with state-owned enterprises. their debt jumped to 62% from 55% in 2007.
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they're saying this is not surprising, given that about 40% of those bank loans that we saw go to state owned enterprises. so, when we see the national people's congress, people are going to be hearing more calls for president teaching p to do more. oil prices are rising in russia and new york. nigeria is back in saudi arabia and russia's to freeze oil production. minister mayrgy need to saudi arabian counterpart today. yahoo! will begin approaching private equity buyers as soon as today.
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the company is seeking bidders for its core business. verizon, comcast, and at&t are among the interested parties. mayer is under pressure after struggling to separate yahoo! from a $26 billion stake in alibaba. there may be competing rescue plans according to a gigi press report that says directors met to discuss their options. will respect sharp's final decision when it comes. get mourners at bloomberg.com. bloomberg.com. hsbc is due to announce full-year results. 2016 has been a busy year for the bank. rod, what are we expecting
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today? are hoping will be better. the tax is expected to come in dollars.illion if that was the case, it would be an increase of 50%. 15%. that would be an increase from the previous year were came in at 7.3%. -- there still quite a bit of work to do on that. china,the slowdown in investors will be looking to see what the outlook will be for
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2016, in particular, for example, revenue slows. there will be cost-cutting, costing about $5 billion by the end of 2017. also, how exposed it is the oil markets -- is to oil markets. most of the revenue has come in from asia in the last two years. angie? angie: when it comes the news headlines, it has already been a very busy 2016 for hsbc. rosalind: indeed, the bank has already announced double tips on its pay. it has also decided not to find a buyer for its business.
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it has also announced that it is trying to keep its headquarters in london. it will not be moving elsewhere in the region, hong kong being one of the other main areas where it could've been headquartered. this will soon raise questions, which investors might want answered about the pivot to asia. strongly pivoting to asia, asia is a very -- is where it gets the bulk of its profit from. the southern part of china will be looking at whether it will pivot to the asian leaders with china weighing on investor's minds. short the japanese yen, by japanese stocks. are is what some advisors
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saying to their client. -- clients. the yen is at its strongest level since 2014. david: there's a short-term and a longer term. it depends, obviously, on risk. get worse, obviously, what people say is that we could be testing the 110-99 level. 110.99. level this is a simple chart. this will take us back to 2013 levels. back to english. goldman is saying that, don't pay attention to what is happening now, look at the outflows. negative rates will determine where the dollar yen does. -- goes. a lot of money is going out of japan, $24 billion in fact, just
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out of equities, year-to-date. we are barely into the year. they are saying that we're headed to 130 by the end of the year for dollar-you. -- dollar-yen. there's a function on the bloomberg, and most of you know this. i will do this right now to give you a sense of where we are. these of forecast -- these are the forecast. there's the physical distribution. 2016.for -- quarter 4, this is where the yen will be. 129, 130. you go through these names, a lot of them are there. i will do each one at the moment. a lot of people are bearish.
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back to you. we will cut more after the break, with the yen weighing on stocks. we go live to tokyo to discuss what is driving volatility, when asia edge returns. ♪
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>> the stories making headlines around the world. suicide bombings and syria have killed at least 140 people. the u.s. and russia had agreed to the terms of a limited cease-fire. u.s. secretary of state john kerry says he discussed the truce puzzle with russian foreign minister city lavrov but did not give further details. hasing back the violence become more urgent as concerns
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now the turkey and saudi arabia will become more heavily engaged in the war. more than half of the water supply to india's capital has been disrupted after deadly unrest in a neighboring state. protesters from the community shut off a canal during water to delhi's 89 people. they have reportedly eased their blockade, but schools remain close on monday to conserve water. hired outside lawyer says a u.s. court order to unlock a dead terrorist the privacy imperil of millions around the world. ted olson says the order would open a pandora's box of privacy issues. the order,ghting beginning a long battle between tech industries and the government. this is bluebird news.
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--bloomberg news. angie: japanese stocks have been the most volatile in the world this year. how long will it last? we have stephen engle standing by in tokyo. he could have the answers. steve? i don't think i have the answer. i believe my guest might. he is alex sato. of -- how long is the volatility going to last in japanese markets? what is your investment strategy as we come to a ball to. -- a volatile period and have an upper house election? sec. sato: japanese equity will definitely struggle, little bit,
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coming to probably another few months. given the fact that around the world, the equity market has been volatile, it just does not see micah stopping at the stopping yet -- does not seem to be stopping yet. it is going to be a tough shinzo abe. steve: i saw 5000 people protesting against the national security lobby. abenomics is taking a punch to the face. there is a lot of negativity. confidence is weak, would you agree?
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sec. sato: people feel it coming back. compared to a go, people are people's confidence is a bit weak. it is not just because of abenomics. steve: let's talk about the household. they're not getting anything in their deposits. japan has been suffering for 15 years. people are aware of this low interest rate. if you ask me, are they going to invest in real estate, i just found it. is so high, and i think even if you got the negative interest rate, i do not
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believe they are just going to start buying real estate. they don't want to get burned? sec. sato: exactly. they're willing to go even further to get the economy going, get the consumer going. what happens as well with institutional investors, mopping up that liquidity, that supposedly is going to come from lower interest rates. gb's.ave to sell more j if you see negative, the prices will be coming down, and they are not going to buy when prices go down. sec. sato: this will definitely check out more investments to go out of japan.
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you definitely need to go somewhere else. where is that going? i think that is going to be the u.s. market. although you can see europe is maybe cheaper, i think there will be some floss their cash flows there. -- i think there will be some flows there. that doesn't do much for the domestic situation here and the future of abenomics. sec. sato: people are buying time. but the rates are low. people have to invest, especially for the institutional investors, they had that much more time. the best way to go is to go u.s.. steve: the end been strengthened
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as a safe haven. it is certainly a truce, that the yen has to go weaker. you get into a vicious cycle of you make the yen weaker. it is a comfortable level. steve: cannot spare corporate profitability? dash cam that spare corporate profitability -- can that spare corporate profitability? sec. sato: i think you can. this 2016 going to be worse or better than 2015? sec. sato: hard to say. it is going to be a tough. , because there is so much -- tough year, because there is so much unseen factors.
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the u.s. election, but an election, europe and chaos in the ukraine. this is all about sentiment. compared to 2015 and 2016, it will be tougher. year. maybe it is a brave angie, i send it back to you. o.ex sat that does it for us in tokyo. angie: no doubt, a brave new world. still to come, this hour, the changing of the guard. we look at who is taking the top job there on the later. -- top job there a little later. edge is back after this short break, stay with us. ♪
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angie: samsung has unveiled its latest smartphone. the s7 season return of a popular feature -- sees the return of a popular feature. e: samsung took a bit of a gamble. three months after the launch of cut thehey had to price. this has cut features, the pack.ound battery this is the difference, they've features.ck key
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they are waterproof. if you're going diving or swimming, picking some major photos, they are introducing ai. he can do 360 degree views of photos. views can do 360 degrees of photos. they're hoping this will be their new hit product. >> market for the smartphone is obviously slowing down. -- obviously isn't slowing down. it is going. when you use one of these new devices, this is more than a phone. this is your camera. this is your mp3 player. this is your tv, your recorder. this is everything and more and more is coming. angie: this is critical for
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samsung. they have been challenged by rivals, is this supposed to be his jewel? say they arey going back to their game and what they know. they have labeled these their "hero" products. withully, zero to hero these products. this one will actually be released a month later than last year. hopefully this will turn fortunes around for samsung. all right, well it has been a little bit of a hero morning as we take a look ahead. let's take a look right now.
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we are seeing asian stocks rally as we need to rally extend into crude as well. we will look at the latest on japan's reopening after a short break.
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you are watching "asia edge." hsbc announces fourth-quarter results shortly ,fter a tumultuous month decided not to move its headquarters to hong kong and scraps plans to sell its turkish business. had of china's security regulators faces a challenge in restoring confidence in the country's market.
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policy missteps by his predecessor rattled investors and helped deepen last year's $5 a report by coalition development says the world's biggest 12 banks cuts currency staff by 12%. that extended a trend. get the latest on the markets right now. yvonne: oil rebound boosting sentiment across the sectors. shanghai really leading the gains. ha is after this new regulation hedge.
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1% andg seng up about the asx 200 of 8/10 of 1%. japan equities coming back after the lunch break. they have the most volatile market we have seen across the globe this year. they have been very much waited weighed.n -- g-20 and shanghai this week, people are expecting global growth. china turbulence will be the center of discussion. i want to mention about the malaysian stocks. the top fund, they say they have been buying this be down energy stocks, those companies for the past two months.
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the ceo sees daylight soon, that oil will hit a bottom. he did not specify which companies in general. i do want to mention one stock, bank east asia rising 7%. the chairman agreeing to buy 110,000 shares. open -- property developers in china, those are searching today because china is set to cut some taxes on home purchases. i want to end on japanese banks resuming declines today. this in the wake of the boj adoption of negative rates. angie: there is a new man in the top job at china's national
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securities regulator. the fallout from last year. zeb eckert is here with more on the policy missteps. it was a weekend blockbuster. zeb: something investors are welcoming today. csrc ischairman of the the former chairman of agricultural bank of china and anda very competent resume he replaces the outgoing chief who was criticized for a number of missteps, the circuit breaker issue, backtracking on that, policy changes that were not communicated clearly for international investors who are used to getting leeway, announcements in advance. this is the world's ,econd-biggest stock market
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$5.6 trillion. a lot riding on this. the fortunes of individual chinese, 80% of individual investors are invested there. not only the international elements at work, but domestic elements as well. making to the market is safe and sound. for the foreign investors, confidence in the market is what needs to be repaired first. the big picture reforms that seem to have been pushed to the side in recent months. imposed a lot of knee-jerk responses to stabilize the market and that rattled a lot of investors. for this new man on top, what else is on his agenda? zeb: continuing this push for market liberalization, that is something they have been working on for some time. making it more accessible to international investors. making a market they can be
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confident investing in, the regulatory system is sound, the ipo system will be overhauled, he will need to work on the exchange link with hong kong. something china has been working very hard on over the past few months and they will continue that effort to allow the chinese market, to push the chinese market to be more integrated in the global financial system. watching ever be so intensely. in other news, alibaba health is slumping in hong kong, not looking so good after china fda stopped the using the system as it considers other ways to help identify counterfeit medicines. it has been a big influence on alibaba health shares. in january, the coding system
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stock plunged. china's refiners are selling more diesel at home rather than exporting it. shipments fell to a five-month low in january while china has been flooding the region would diesel come exports in january fell 26%. imports jumped the most in 10 months. manufacturer has reversed losses. a year ago.down 9% the company suffered a contamination scandal in 2014. hepatitis outbreak was linked to frozen berries. singapore's largest lender saw its interest margin jumped to a five-year high. lively go to our southeast asia reporter. kind of surprised -- kind of a
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surprise for the market. >> it is not surprising that shares are rising, maintaining their 1.5% upside. the benchmark up by less than half a percent. 20%.ofit up about 700 million u.s. dollars, that includes a one-time gain of about 100 million u.s. --sold a property investment the ceo says the company's finances are strong, the latest numbers cap a strong year, he said. the financial markets have created short-term uncertainty, fundamentalsn's are sound. loans, rivals have been setting aside more money to cushion rising loans. 20%.g at least
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the story right now, it is not too bad. economic weak environment in singapore and the rest of asia, something -- it is something to watch out for. angie: it is often rated one of the world's safest banks. analysts are pretty upbeat. oversold wherere they are right now. 30% cheaper than the average price generally. get pretty good dividends at about 4%. not a bad stock to have. much for, thank you so that. shares in blue scope steel, let's check it out. it is 1.6% higher.
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some gains after australia's biggest steelmaker announced doubling profits. let's go to paul allen. how did blue scope do it? paul: it has been a very busy six months. it was only back in august they were talking about closing the giant steelworks south of here. they got the union on board, cut 500 jobs, saved a lot of money and a cost cutting is a big part of the story. the company is still pretty proud of its products. boosted sales of a couple of assets. combines to give us the first time interim result of $200 million beating the upgrade and more than double for the same. last year. -- for the same period last
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year. stronger sales into china. from: strong results bluescope today, but is it sustainable? bluescope ceo says they have no control over the price of iron ore. he expects to see the closure of another of chinese steel m ills. >> there will continue to be significant exports out of china. over the next 12 months, it will start to reduce somewhat. it has a big effect on price around the world. paul: a good day for the bluescope stock. it has settled to about 1.82%. what a wild ride it has been.
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back in june, the stock was trading below three dollars. angie: paul allen out of sydney. asian shares level off after rally.ost lunar new year we will take a look at whether central banks can give the markets a sustained boost. ♪
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>> these other the stories making headlines around the world. authorities in beijing say 18 people are known to of been killed during a ferocious cyclone. more than 6000 are in emergency shelters after their homes were damaged. electricity supplies across the
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island remain patchy with clean water supplies a challenge. the mayor of london says he will campaign for britain to leave the european union. the decision caused him a huge amount of hard rate -- heart ache. his choice put them in direct opposition to david cameron. the prospect of a so-called brexit is weighing on u.k. assets. lawyer -- ted olson says the order would open a pandora's box of privacy issues. apple is fighting, it night in a long simmering battle between the tech industry and the government over civil liberties.
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powered by over 2400 journalists euros around the world -- bureaus around the world. talked, lastst we , that wasyear holiday before the lunar new year. that is when things looked dire. it?it sustain let's the jury is out there on this. there on jury is out this. the volatility has been damaging for the market. there has been some internal damage. it is a concern. specific, with regards to the outlook on the fundamentals, my sense is that it is about the central banks. about the fed, which is looking
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backwards, talking about the employment situation in the u.s. we have global growth concerns. >> what do you make of yellen saying negative rates were not off the table? >> it was a step in the right direction. it signaled a potential turnaround or a reversal of policy in the direction of using rather than tightening. they were never off the table in the u.s. anyway, so she just stated the obvious. it was interesting to see that the markets responded so positively. that is a powerful signal. arbitrarilyd not volunteer that. it was in response to a
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question. ,> but she could have also said we are not really hot about the idea. [laughter] -- the fed has a history of being relatively flexible. willuestion is how quickly they show us the flexibility? >> how big is the likelihood that they will reverse course this year and bring it down to negative? we have a few steps to take. >> you do not need to do negative interest rates to ease policy. that is just a tool, one of many. as we see in japan, it ends up confusing a lot of people. signal point is to easing. you are not looking backward at employment statistics. that is the important message.
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ideally, they will do it in a different way. which is what the bank of japan did and that did not work out well. >> we talk about patient money, the long-term investors. you noted in the beginning the internal damage. why was the patient money spooked out of this in the scenario? what will it take to get them back in a leadership role? >> everybody has a slightly different definition of patient money. , the largestuity part of our business, is very patient money. i think if you look at china,
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which has a lot of issues, we do not see a lot of issues, the sectors are growing. in the public markets, i will return to my said argument. fedaid argument -- argument. >> foreign investors seem pretty concerned about japan. the market seems to be lacking clear direction right now. japan, it is of not the only market lacking direction. the currency has a clear direction. >> we are hearing from goldman sachs -- >> our view is clearly in favor viewe yen, but that is a
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not associated with the risk off trade. it has been strengthening sinks october 2014, which is when the bank of japan -- strengthening since october 2014, which is when the bank of japan -- it is a sign that qe is working because that is the same you saw in the u.s. dollar a few years ago when qe began to have a positive impact on the economy. picture inroader favor of the yen. the economy is doing better. it is going in that direction. the yen is not an issue. the problem is global and growth and the global bank is the fed.
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by far, it is the most important single giver. >> let's see what picture they paint for us. up, what does $107 million by you in hong kong? we will take a look at the mansion which sold in three hours over the weekend. ♪
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angie: the health of asian economies has been one of the -- at theomies in summit in japan. me, they will continue to grow at 7.5% or 8% going forward.
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demographics very interesting. that is the next engine for growth. if you can have monetary policy and fiscal policy stimulating the growth, that will add one or 2% more. organization believes japan must use all necessary measures if it wants to reinvigorate growth. them thed to give confidence to establish the confidence among private sector. we have to achieve fiscal conservation and a solid way. we have to raise the potential growth in the japanese economy.
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0.5.en zero and mobilizingmake -- all policy measures to raise potential growth. angie: the philippines has cut its growth target this year. the finance secretary believes the economy is in a strong position. at thetility will be cost of what is happening outside the philippines. fiscal situation is well-managed. macro has been a source of stability. our external position has been strong. we are a net creditor country. the growth we have had the past 6.2%, is theaching highest we have had in over 40
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years. back here in hong kong, many observers are talking about a slowed down in the property market. the weekend sale of a luxury home for $107 million might have been seen as a positive result. it was well below estimates, as much as 25% below. -- $107s this price million? and they got it for a steal? >> if it is an overseas buyer, that is a next her $25 million on top -- extra $25 million on top. market expectations were much higher because similar properties, there is one called the opus and sold for about 10% more per square foot.
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they decided only to sell one. angie: they are flooding the property to debate tell in the oe in theto dip a t water. it is a market unto itself. these are the top 1% of the 1% so it is hard to extrapolate. >> what kind of features? toa person who is too lazy walk up three flights of stairs because it has an elevator. angie: when is the housewarming party? >> i haven't gotten my invitation yet. angie: i haven't gotten mine either. that.you so much for
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