tv Trending Business Bloomberg February 28, 2016 8:00pm-10:01pm EST
rishaad: it is monday, the 29th of february. this is "trending business" with me, rishaad salamat. ♪ live in tokyo, sydney, and mumbai. stocks rising across asia. leading economist pledge to do more to strengthen jobs, rising fears about japan. toking through the weekend salvage the deal, foxconn and allp, won't proceed until
is resolved. of president xi jinping shut down. let us know what you think about our top stories. follow us on twitter at @rishaadtv. the session about to get of her underway in hong kong. we're starting things off green across the board with the exception of malaysia. wrapping up g-20, overall a success. finance ministers talking about a way to boost global growth, refraining from competitive devaluations of currency with which. which.
new language. up.nikkei 225 industrial production saw a rising on the month, the first output rise out of japan in three months. we did see retail sales falling 1.1%, economist expecting a rise of 1/10 of 1%. exporters falling today, adding to worries about the economy. stocks have slumped, the yen has , so we could see a seesawing affect when it comes to modest growth. let's look at the yen. we did see some strength leading , 113.62.
one stock, and operator of drug chain stores, the merger of two companies. they raised their forecast to 19%. yosan will pay a special dividend of ¥50 a share for the 40th anniversary of its listing in addition to a dividend of ¥45 a share. pporo cut to neutral by j.p. morgan, down almost 5%. this as we count down to india budget day. the finance ministers speaking later today.
how things go, as well as china opening in half an hour. rishaad: g-20 finance ministers say governments must do more to boost global growth, central banks must step back, and countries must avoid a currency board. other than that, critical details lacking on the more immediate challenges. i think they managed to work on or bring down expectations. we are looking at a longer list of risks, but were not in a crisis. while there is a pledge to watch capital outflows, they also played down financial markets. it did not reflect underlying
fundamentals of the economy. there was agreement that more support should come from the fiscal side, governments, rather than the central bank. we may have reached the limits of what monetary policy can achieve, and that utility curve declines from here on. net brings us to the broader issue of currency wars. this comment from the eurogroup president sums up pretty well what the agreement was when it should we devalue currency and steal each other's growth. >> i think we strengthen our commitment to refrain from competitive devaluation. it is a bad policy that does not improve our economy or competitiveness. we have agreed that if a country needs to take monetary policy measures for domestic reasons, the mystic macroeconomic
reasons, that they will inform domestic macro- economic reasons, they will inform g-20 partners. at theit was looking fire and sing -- at devaluing its currency as one of its options. boj had to turn on the them, clearing -- decrying program was simply to get inflation back up. rishaad: we will have more on this later on the show. tweet us your thoughts at @rishaadtv. sharp making headlines, said to be reviewing the terms of its deal with foxconn, but insisting no time limit is finalized for the deal.
i believe they were talking all through the weekend, possible. vel: the lawyers and the bankers have been at it through the weekend. they plan to meet in person to clinch the deal, but our sources are telling us it is potentially bad for the drawing board. question is contingent liabilities, latent costs that would be triggered by restructuring or layoffs at sharp. it could be an excess of ¥300 billion, but it could also be less. it is not clear how much of a sticking point this is and whether it could lead foxconn to lower its offer. originales to the terms would have to go back to sharp's board for approval, potentially delaying the resolution for this drama.
rishaad: thank you very much indeed for that. joining us from tokyo with this ongoing story regarding sharp and foxconn. one carmaker making the headlines. let's find out about that. surging after's at announced plans to buy back 3.5 billion dollars in stock. the automaker giving shareholders a boost after shares fell 20% this year. nissan is buying back as many as 300 million shares or 3.7% of the issued stock. japan second-biggest carmaker doesn't have pressing investment cash too that frees up buy back shares. nissan has forecast net income to rise 2.4 -- to rise to $4.7 billion.
story for nintendo, falling in tokyo after having its annual profit outlook -- cutting its annual profit outlook by 50%. million in the year ending march, and threat it does cut its three ds sales 13%. the company planning to release its device for mobile devices, sitting the stage for the biggest shaper -- shakeup. , but on its hardware struggled on sales, now hoping to capture players who have shifted to mobile gaming. german machine builder has announced plans to sell at least a 29.9% stake to shanghai electric with the possibility of a full takeover. supplier is
restructuring its operations in seeking to raise funds. as close as stock possible to the market, up to a maximum 40 year old such are -- -- euros a share. produces equipment for solar industry and equipment for manufacturing smart phones and tablets. 10outlined plans to cut percent of the workforce to save millions of dollars in costs. rishaad: were looking at how a vietnamese budget airline hopes to become the emirates of asia. come, 37 million web folders lost after criticizing president xi jinping. stock con edge's
rishaad: investors have at least one reason not to be too downbeat about the route in japanese fox. they plan to spend a record amount on buybacks. the reasoning for on the buyback. is it about them being cheap? obviously that is one big reason. we have seen the market plunge this year. violations are very cheap. the near the lowest since when the president came into power,
but also this is part of the abenomics plan to get companies andive some returns back bring a sense of wealth and to japan. the president and acted the corporate governance code, trying to improve corporate governance and make executive think more about returning to shareholders. we have cash holdings at a record high. there is a lot of room to rise. for years, japan's was half the global average, and dividend payouts are still low. all of this has been building up for quite a few years. rishaad: the question is where is japan place when it comes to shareholder returns? record ¥5.9at a trillion, the year ending in march.
also, dividend payouts at a record ¥9.9 trillion, but compared to the u.s. it is quite low. buybacks and dividends as a ratio earnings is about 40%, where's in the u.s. it is well over 100%. in europe it is 60%. there has been some criticism and the u.s. about how buybacks are propping up the market and company should be spending that money on investing in their growth, but japan has not reach those levels at all, so analysts and investors's are optimistic and happy about the fact that we have had these huge buybacks. a good example is nissan, shares surging after that ¥400 billion buyback plan, and softbank as well doing well. analysts are very optimistic about what's going on at the moment. joining us there from tokyo. let's have a look at china's
annual national people's congress beginning this friday. it is the next big test of beijing's reform plans. great to see you. we want some clarity out of this meeting, don't we? we don't won a series of vague promises. are we going to get that? as early as last week we saw with the change in the pboc governance that there will be more communication and transparency. that was affirmed over the weekend by the g-20. , clearat investors want direction from chinese authorities regarding policy and more on the national people's congress in terms of the long term thinking. they are looking to see what is the growth target for gdp, which we think will be 6.5% for 2016. rishaad: it is probably the only country in the world that hits its target and knows about it in
march. tell me something, what would you particularly like to see out of this. people have talked about as so we reforms -- state owned enterprise reforms. a the market will want to see definite approach to macroeconomic reform. state ownedpoor companies that are performed badly, fiscal stimulus, a trend emerging globally, although that has to be balanced against the rising debt levels. overall, i want to see microeconomic reform, cleared to many asian on what they're doing on the fiscal and monetary side. have where you are at the moment an interest-rate decision out of the reserve bank, nothing expected. glennway do you think
stevens is looking at this through. ? >> i think the reserve bank of to do anythinged unless pushed. they want to stick around that 2% mark. our bank thinks this is the low for the cycle, although economist will look for 25 or 50 basis points throughout the year. i think they want to see how the rest of the world emerges, so i guess he is on the fence and hoping the stabilization is driven by the currency and will do the job for him. the currency has done pretty well, up 3% on the year. there may be some cause for them to think about lower rates coming up in the next couple of months. rishaad: when you talk to clients and others in the industry, what is the major concern they are expressing. what are they asking you? they are all looking for
clear direction. which is seen in the first two months of the year has been incredibly volatile. 50%, oil down 10%, massive swings. investors are looking for certainty. what we have seen in the last couple weeks is at best stabilization of volatility, but no change and direction. where do we go in the next year, where is the growth going to come from? won'ts not the u.s., it be china and europe and probably not japan, so who will lead us out of this malaise, and that is what we are worrying. where do we put our money and get a return? rishaad: no clear answers, so what you tell them? >> i think you have to take a long-term view. there is a lot of cash on the sidelines. the return parameters aren't necessarily so high. it is about certainty.
you have to give them confidence from all of the elements of the economy and wanting to put risk on. right now there isn't any, so hold cash seems to be high relative to what you would normally do. we are saying holding cash is probably not a bad idea. rishaad: let's look at one event today. the indian budget. we have a special show coming up at 1:00 on bloomberg hong kong time. has to deliver something when it comes to rural reforms. economy helde an to ransom by a monsoon. >> that's true. of the size ofty the economy based on agricultural and india. modi ispresident looking to not deliver on his
three point 5% gdp and the fiscal deficit. i think that might be missed. outside of india, people are confident in president modi and the administration. and less there is something dramatic in regards to the budget announced today, i think foreign investors feel reasonably comfortable about the direction the president modi is taking the economy. rishaad: have a good week. kong is 9:20 a.m. in hong and these are the stories making headlines. the u.s. security council discussing new sanctions on north korea after china indicated it would support them. beijing's korean envoy said china would back any plans to promote stability. the security council is debating a u.s. resolution over pyongyang's recent rocket launch a nuclear test. new sanctions could be inspections of all ships sailing to and from north korea, a ban on mineral exports, anna a ban travelels -- and
restrictions on senior leaders. on center you need -- aung san revolt,is facing a protesting amending part of the constitution barring her from the presidents. the article bars anyone with foreign family from the post. british, asband was are her two sons. she is negotiating with the army to repeal or suspend the clause. -- ireland facing the prospect of a grand alliance with no majority. they will have to negotiate a coalition with potentially to other parties. ,aced with a traditional rival the outgoing government suffered a huge loss of support with voters angry at spending cuts and tax rises. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news.
of billiont forward dollars a year ago. since then there were questions over and accountancy practices and cash flow. the regulatory environment changed as well, but it all culminated in a six and a $24 million write-down, more than three times the market capitalization of slater and gordon itself. over the year, it lost more than 90% of its value. ceos saying that today's result is "very disappointing." perhaps the understatement of the year. he offered to quit, but the board rejected the offer. something of a delicious irony, is ar and gordon class-action firm and may now face a class-action themselves from shareholders who felt they were misled over profit expectations. rishaad: thank you for that in
had fallen. executive of nissan says the return to shareholders is the key objective. the indian finance minister arun jaitley presenting his budget. they estimate growth up to seven and -- 7.25%. a pay rise of government workers as well as moves to shore up infrastructure. shanghai and hong kong about to get underway. possibly a negative start to the day. it looks like index futures are pointed in the right direction. shanghai down 6/10 of 1%. we thought the china panic after the g-20 seems to have faded after we saw that reassurance from policymakers as well as finance ministers over the weekend.
sayinghristine lagarde there is no intention to devalue the yen. flat, downng slightly. malaysia stocks down. they'll strain stocks up. the nikkei 225 up 6/10 of 1%. we are paring back some gains after we saw mixed data early this morning. singapore also 1/10 of 1%. we will take a look at the australian dollar. we have seen the fall of about , but we have seen it strengthening since mid-january. a little bit of strength today. vets for ahat the .ate cut could be piling up
job growth has evaporated. saying they do plan to cut investment, and you add a stronger currency, that has a lot of people betting that we could be seeing a rate cut around the corner. i want to check on that 0.7129, some data early this morning, business confidence slumped as well as building permits, fell 8.2%. check out the movers closer to home in hong kong. hsbc up after bernstein cut the , price nowderperform at 38.
kai rising, setting higher home sales. d, the chinese carmaker up. rishaad: getting back to the top story, g-20 finance ministers say governments must do more to boost global growth. you, whatt off with stood out? everybody was surprised when the pboc governor started speaking in english. representative of how he wanted to reach out to a broad international audience. they managed to win a few successes, and we will be talking more about that. how people about were coming in with high
what theons for finance ministers should agree on. rishaad: that was naïve, wasn't it? see thes ironic to central bankers pointing and the direction of the finance ministers. the other thing was how wide the s were on how to address just in case we enter a recession. it doesn't seem that we have any agreement. rishaad: what was actually agreed? what specifics were actually agreed? maybe that is a leap too far. >> there are probably more disagreements than agreements. ,ertainly no shanghai accord but there was one thematic -- thatad: you're saying because of the plaza accord, everyone drawing a parallel. this was not supposed to be in
the same league as that. >> they put a line in the communiqué saying the market volatility is not reflecting underlying fundamentals. be we have gotay to do more on the non-central-bank side of things. the governments have to spend more money. rishaad: and also structural reforms? >> exactly. structural reforms are domestic political issues. people workaking longer, be more productive, and nest the kind of thing that can only happen in national parliament. not be a circuit breaker for the world economy. david: one of the other things, i was just looking through this communiqué, vaguely worded. structural reform was mentioned a few times. also, the framework on how they will measure each other up,
whether or not they implement this, which was very vague. another thing going into the meeting, a lot of the expectations before talks were held was china. what really came out was that it was a fiscal push coming out. he was actually more present than the central bank. i think it was 4% of the gdp, spenddget target, may be their way. the overall agreement is the world is not in crisis. a success?s it for china, not necessary the g-20 as a whole? was due morematic on fiscal and structural, then china deliver the message that they are ready. we will push through structural reforms in that kind of thing. rishaad: they've been saying that for a long time, have they not? >> they have, but they're
probably delivering a bit more. germany's financial minister was adamant, so maybe that's where china wins the smaller argument. had a number of ministers speaking throughout those few days and shanghai, and they thatered a central message they are not for outright competitive due violation rishaad:. rishaad:what was the atmosphere like? >> it wasn't combative. a lot of the agreement was done back door. china did win a lot of points. not a lot of finger-pointing directed to china. i'm not sure if that was because they were the hosts. about asthma,ed the devaluation of the yuan. it wasn't talked about much, the devaluation of the yuan.
on the currency devaluations, people were expecting the focus to be on china. -- andy the focus was on the agreement was that it is ok policy, butve a just in case you're planning to surprise the markets, let's not surprise each other. rishaad: you would've thought that the move to negative rates would have been appreciated. >> it was not. there were certainly some significant debates around spillover effects from negative interest rates. subdued,ll mood was but no real sense of crisis just markets areough the pushing policymakers more.
policymakers are pointing out that were nowhere near crisis levels. rishaad: thank you for that. from shanghai and that the 20 meeting. embroiledhas become in the world football corruption --uiries, suspended subpoenaed by the u.s. attorney. is under investigation and the awarding of the 2018 and 2022 world cups. claims are that bribe money pass through big banks, including citibank and j.p. morgan. one of the world's biggest food a loss of $160 million. lam marked its investment in a malaysian sugar producer as that loss and has made it available for sale. the man who controls godzilla is going after mickey mouse.
planning to spend more than $3 billion in a leisure park outside of paris called europa city. there will be a theme park, hotel, conference and shopping centers. bill --his second major deal this year alone. he agreed to by legendary entertainment for $3.5 billion. american box office may have seen the first big flop, gods of egypt. million,les of $14 lions gate facing a tough time recouping its $140 million outlay. pool,led to beat dead which led the box office. kung fu panda three came in third. china may have succeeded in calming the market down, but faces a test on its reforms.
>> it is 9:42 a.m. in hong kong. the stories making headlines. moderate candidates have won all seeds enter ron, a victory for megan: --president hassan rouhani, a referendum on powers. space x aborted the latest launch of its falcon nine rocket. the mission plan to place a satellite into orbit and attempt to land the booster on a floating barge.
it failed on three previous attempts. the company was playing down expectations of success. it's not clear when they may try to launch again. security tight outside the adobe wherer in los angeles, the academy awards are getting underway. extra security measures for joe biden, due to introduce lady gaga. this year the oscars have been hit by controversy over the lack otherersity, leaving stars to boycott the show. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. rishaad: india in the spotlight later today. the budget being presented. the finance minister arun said india must review its targets in coming years. from arune expect
jaitley. ? >> all eyes are indeed on arun jaitley. expectations are high that president modi will bring back the promises of creating jobs and enhancing growth. the benchmark indices are down 53 percent since modi swept to , and the key is that investors have lost the belief, the euphoria after the election, investors want to see more. particularly on the goods and services tax, causing a logjam in parliament. investors want to see the government walk the talk. what are mr. modi's key
priorities for this budget in particular? >> there are two interesting developments. away,nes have shifted violent protests across the country, particularly for communities asking for job reservations in an affirmative action infrastructure. power on modi came to the promise that he would create more jobs, and that has not happened. india is growing at 7.5%, but that has not translated into large sections of youth in this country. what they're trying to do is shift this back to job creation, investments. investors are on the side of president modi. isthe economic side, india
caught in a vicious cycle of bad sheets, andalance the cycle has to be broken. the government has to intervene by the capitalizing banks. these will be key priorities for the government. let's wait and watch if arun will be addressing them with tax proposals and recapitalization of the banking's etc.. you can catch the indian budget right here. that's at 1:00 hong kong-singapore time. i had start with the economic data moving the markets this week. david, let's start off with this budget. what are you looking at? we think the trade-off is
right there on how prudent can fiscal policy be given those challenges that you have been talking about. there is a need to boost jobs, with pay the fact that rises coming through in india that there will be more of a challenge on how much investment from the public sector will be achieved while still keeping a relatively tight lid on how far the fiscal deficit goes. we think there is some risk of slippage, but i think it is something that gives the markets a bit more confidence, trying to do it they can to get the private sector back on track, and this was just mentioned, the nonperforming assets problem is one of the big ones to watch for. how quickly they can resolve it, and there resolving to do it
fast, the net could encourage a bit more investment from the private sector, which has been lacking. indeed, there has to be help on the monetary side as well. they have been pressing the fiscal side to do more saying monetary policy has limits. what can be done to engender private investment? >> the monetary policy side is limited. far in thely so central bank and go, and india is more constrained and others given structural inflation challenges they have. on the nonperforming asset side, it is about supporting growth while they go through that process. some incentives for the private sector to invest and take advantage of some of the red tape that has been removed, that could be something that boosts confidence, but i'm not so sure it is something that can be solved in this fiscal
year. it is something that will be a challenge over the next couple of years. as soon as you have written off that debt, it takes a while before the banks start to get more aggressive again and start lending and being more willing to take risks's with these investment plans. that,d: picking up on this is something reflected in that g-20 statement, was in it, that monetary policy can do all the heavy lifting? >> that is exactly it. that keeps coming up. it is a critical point. r.b.i. isthing the fully in agreement with. other central banks in asia have been taking a similar line, but reforms need to happen, more progress, more of an aggressive line that there will be more progress on reforms, -- something that will make or break whether or not there is more confidence that can come back from investors around the world, but india's growth is on a good
path, but will go into a healthierne and even one as well if it does come from more private sector investment rather than just more consumer spending because there were big pay rises given in the public sector. week culminating in the big one, u.s. jobs? one whereis is the there is such a limited amount of rate hikes priced in, there is a bigger risk of that if you get a better number then people might rethink it. we know the fed is like an oil tanker, a long time before it turns its way around towards clearly signaling that there is no more rate hikes. it could be that the market has gone a bit too quick and expecting the fed will signal that, and i think the jobs are the swing factor. i think the fact is that the market sentiment has been hit so
data, and itu.s. may have gone a bit too far for now. reserve bank of australia no change, 2%? >> that's right. we are not expecting any changes from there. people overestimate the impact on the economy from what is going on in the rest of the world and they may be pointing or sounding relatively optimistic the growth will be ok. it won't be above trend. no reason for them to make any move this time. talking to you. we have to take a break. oning up, someone silenced bloggere chinese learning the cost. ♪
are back with "trending business" "trending business". we are looking at this training story, who is this? had more than 30 million followers, and over the weekend china's internet regulators shut down his accounts. they said he was "spreading a legal information and had a negative impact." this is after he criticized president xi jinping's orders to preserve the communist party. we have seen state media attack ren zhiqiang, referring to him as anti-communist party. this has become big on social media inside china. people are talking about it. some of the comments seem to
have been a raise good one person saying that "beside the comments we can see, no news media can comment today." when we were searching the name, a number of replies or comments, but when we went into it, we saw fewer comments. -- beingbeing a raised erased? rishaad: maybe. has there been reaction from twitter? htag had been trending. he had followers. some people comparing him to donald trump. rishaad: all right. thank you very much.
executive saying the move is one of the companies key objectives. , the best strategy is to ask your financial advisor to what to buy and sell and do the opposite. more on that. andow me on @rishaadtv don't forget to include #trendingbusiness. taiwan, public holiday there. shanghai in the red, but elsewhere a warm glow from that shanghai g-20 meeting. we continue to see stocks extend losses, 4% down, the lows close since 2014 coming out of shanghai, hang seng following it down 1%. the austrian socks up. nikkei 225 the paring gains.
here are some of the things we take a look at when you break down the sector. the broad-based selloff in shanghai, but what is leading downndex down is tacked, 7.5%, health care, consumer services, basic material 6%, as well as industrials down 6%. we are seeing the metals, growth drivers, falling, financials down 2%. bute was a lot of panic, the g-20 seemed to calm fears. some pressure because of what was going on in the reference rate, lowered for a fifth straight day. turnedference rate now as black box as ever. it has led to this a negative once again, everyone focused on that parity.
they broke that parity at 9:30 a.m., but we are seeing the 6.5480. at surprise has intensified. one interpretation is we are reverting back to this plan they announced late last year about putting the currency against a basket of currencies and make referenceof a main versus the dollar, but the pboc governor did not reaffirm during the g-20 that that is not the case. the greenback still plays the biggest role in the basket, but again it weaken once again. overall the broad-based regional benchmark, slightly up as we start monday morning, but the shanghai stocks paring some losses, three points down. g 20 finance ministers
say governments must do more to booze global growth, central banks must step back, and currencies must avoid currency wars. apart from that, leaders will argue on how to tackle the global economy's immediate challenges. david was there for us. david: it is easy to come up with a must to do list, where the you get there is another thing altogether. back to where we are, no groundbreaking agreement, and in knowledge meant -- and it knowledge meant that the recovery has hit a snag, but were not in crisis. that was one of the key messages. , they playvolatility down in effect and say it did not reflect the underlying fundamentals of the global economy. in fact, they also singled out growth in key emerging market economies. i would imagine that's partly
directed a china, remaining strong. more should come from the girl from -- the governments if the fundamentals worsen. let's move things along. next up was the issue of currency wars. publicly the message was a reassurance not to engage in stealing each other's growth, but the problem is should there be a need to become more aggressive, let the other person know ahead of time. listen in. >> the language on exchange rates is very important. t commitmentportant mea in turkey to refrain from devaluation. there is an additional commitment to consult, and that means that it's a commitment that will keep each other othered and avoid each being surprise. >> just in case we do get a currency the violation, that
will jack up the u.s. dollar. the discussions were about the boj, the announce to bring some rates below zero the latest announcement. was for the message support as long as it did not explicitly target a weaker currency. will have a more detailed look at that story later in the show. do tweet us your thoughts. my handle is @rishaadtv, include #trendingbusiness as well. nissan shares up the most and biggest evern the share buyback worth $3.5 billion. we are in tokyo now. up does this buyback stack peers?ose of nissan's asaside from toyota, this is
the egg of a buyback as you have seen among japanese automakers. it is also for nissan a departure from what it has been up to the last few years. this is the first time that the company has bought back shares since 2011, so you are seeing this big pop in the stock, also something to do with the $3.5 billion being more than the company's substantially has used in the past to repurchase its own shares, so you're seeing a follows and really this through friday, you saw the company stock down 24%, that was a steeper decline until yoda. -- decline than toyota. nissan stock has been beat up with other shares in japan. bet by theents a board that these fears of the
company hitting a peak in terms of profitability, global sales, are may be overdone, so you are seeing a big response today from shareholders bidding up the shares that had been battered up to this point this year. rishaad: thank you very much indeed. joining us from tokyo. let's have a look at what else is going on out there. mortgagort surprising -- merger they got derailed back on? deal couldp-foxconn closure.g sources say they spent the weekend going through a list of sharp liabilities that could top $2.6 billion. goconn said it would not through with the deal and all issues are resolved. that announcement came hours after sharp's board approved the
offer. sources say it is too early to tell whether foxconn will lower the value of its offer for sharper changes bid in some other way. any material change to the offer would require sharks board to vote again on the foxconn proposal. fought --rman has chairman has for for months to take over. afterdo falling in tokyo having its annual profit outlook. weak sales and a stronger yen have hit the company. nintendo slashed its net income target 51% to $150 million in the year ending march and cut 3ds sales outlook 13%. games foro release mobile devices next month, setting the stage for the biggest shakeup since the 1970's. nintendo's traditional business of games on its own hardware
have struggled and is hoping to capture plays you have shifted to mobile gaming. sydney, the first publicly listed law firm is plunging after resuming trade. a $683and gordon posted million first-half loss after it wrote down the value of a u.k. business it bought last year. they huge write-down comes less than a year after it paid $1.3 billion to acquire the professional services division and has prompted crisis talks with its lenders. the embattled law firm says is priority this year was to cut debt, which has ballooned to $741 million. the company has scrapped its interim dividend and said it was unlikely to pay a final one. at why: were looking gold becomes the biggest winner this year. check out the story on bloomberg.com/asia. from a darling to pariah, find out way some popular companies
in the spotlight later today with the latest national budget, the union budget. must review said it fiscal targets in the coming year. what can we really look for here from arun jaitley? therun jaitley will present third budget of the modi government. expectations running high as people expecting president modi to present a new deal that will create drops, enhance growth,
and restore investor confidence. the benchmark indices are down 23% since may. sete then, you for you in. -- euphoria set in. they want to see president modi at walk the talk on economic reforms. thatkey milestone investors are watching for is for the government to walk the talk and push through reforms that can bring back foreign investment that has walked away from this country, $2.5 billion sold last year. what is the pressure on the finance minister here? a lot of that comes from the prime minister's office? what are president modi's key objectives for this budget?
have moveds in india away from the economy. eruptedprotests have across the country, people asking for job reservations as part of the affirmative action infrastructure in this country. the problem is that while india is growing, there hasn't been a translation into job opportunities for the large population of youth. therefore, president modi's backity will be the shift to job creation, investment, economy, and progress, and try to reclaim some of that lost political ground. the second important point is about the investment cycle. india is caught in a vicious cycle of bad loans and chasing corporate's that have bad balance sheets. this cycle can only be broken if .he government intervenes
these will be priorities for this gusman. arun jaitley will have to address the bad loan mess and clean up the balance sheets. rishaad: thank you for that. let's get more on this. welcome the investment director for fidelity international. it is an important political event. when you look at investors, expectations have been high. from where we sit in asia, i think it will be important to see whether the government stimulus,iscal balance, fiscal reform. they revivehow did the economy, focus on the agricultural sector after two had monsoons. rishaad: it is a huge sector of
the economy, and arcane to be relying on the monsoon. how can you get away from that? moreey have to provide infrastructure spend in terms of irrigation and roads, some not just urban infrastructure, but also rural infrastructure. crop insurance schemes, for example. think will be in focus. at the same time, when you look at investor portfolios, it is about improving sentiment. recapitalization of the public sector banks will have an impact on sentiment. what fiscal measures can you actually take? is railing against it because he wants to see more from the government. >> it is about capital expenditures spend,
infrastructure spend, and also the revival of the rural sector can spur more demand for the auto sector. we like some of the companies out there and have been overweight the auto names. rishaad: in anticipation for this to come through. there are a lot of vested interests here, are there not? >> that's why i said it is a delicate act, and fiscal stimulus versus reform. sykes --and pensions s and pension hikes, consumption, infrastructure, and the banking sector, that is important for us, but we are overweight for 18 months or so. rishaad: you have had a bad time of it so far? disparitys a lot of in violations, see do find some
opportunities. reasonable in india, and we are looking at companies with good balance sheets, not stressed balance sheet. and also those that have scalable business models. rishaad: cheaper than the ones you mentioned. this brings us to the next one when it comes to india. fastest-growing major economy in the world at the moment, how sustainable is that? ,> the current growth rates even without too much being done, this can go on. there are a lot of headwinds at work here, young population, prime minister modi schemes, he has made it easier for people to .o business at the same time, the oil and commodity prices coming down are helping the government. inflation is stable and the
central bank is looking to reduce interest rates. when the current sentiment settles down, we think india will still outperform. rishaad: i want to pick up on what you talk about with interest rates going down. interest rates in india do not affect the average man on the street. it is all about corporates? >> yes, it is. fy 2016-2017 will be the top of the earnings cycle. definitely there would be another sentiment impact, so lower interest rates positive for corporates, but still need to come down. rishaad: perhaps he realizes this unlike others. interest rates in a country like india are only useful at the margins when it comes to controlling inflation. inflation is determined upon
food prices, distribution importantut equally the oil price. rishaad: the single most important thing in bringing down that inflation rate. >> that gives the central bank enough bullets to play with. at the same time, given global uncertainty, india needs to keep some dry powder. any fiscal slippage in the budget may not be taken kindly. rishaad: people abroad will be looking closely at this. you said fdi, record amounts coming through, that has to be sustainable. in order to do that, you have to create the atmosphere within india that people who invest will have security. and i think that's what prime minister modi has been focusing on, the ease of business, removing red tape, suspending bureaucracy. investors have been frustrated
by the pace of reforms, so we need to see some of these bills go through, like a good's and services tax. rishaad: how long has that been in the pipeline? most of us are expecting it in the next 10-12 months. that will definitely be a positive. rishaad: thank you for joining us. fidelity international. catch that indian budget right here on bloomberg, arun jaitley speech, 1:00 p.m. hong kong time. >> it is 10:21 a.m. in hong kong. these are the stories making headlines around the world today. councilecurity discussing new sanctions on north korea after china indicated it would support them. the security council is debating
a u.s. resolution over p on yang's recent rocket launch a nuclear test. new sanctions could include inspections of all ships, a ban on mineral exports, and travel restrictions on senior officials. democracy leader aung san suu kyi is facing a result against possible moves to let her become head of state. buddhistay hundreds of nationalists protested against amending part of the constitution that bars are from the presidency. article 59 outlaws anyone with foreign family from the post. her late husband was british, as are her two sons. she has been negotiating with the army to repeal or suspend the clause. ireland facing the prospects of a grand alliance as the general election left no party with the majority. is expectednister to finish ahead of the pack. he will have to negotiate a coalition with two other parties.
the outgoing government suffered a huge loss of support with voters angry at spending cuts and tax rises. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. rishaad: coming up, one of china's most influential social media figures loses his voice. "trending business" returns to fiche of million followers in a single day. -- why he shed 30 million followers in a single day. ♪
million followers, his accounts shut down because he criticized orders toxi jinping's chinese media outlets to preserve the authority of the chinese communist party. this. discussing one person saying that besides comments already, no one can reply to comments when searching the name ren zhiqiang. the ones we could see were far fewer than that. suspicions out there that may be comments are being erased. twitter, 38ng on million foreigners, but now this user no longer exists. some people comparing him to donald trump, saying who should be offended here.
rishaad: a look at our top stories. shares plunging to 15 month lows following the finance meeting. tech companies leading declines. price swings climbing to the highest level since november. nissan's after announcing a record $3.5 billion share buyback. sales in theing u.s. and china, but shares have fallen 24% this year.
the chief executive says the return to shareholders is a key objective. minister arun jaitley presenting his budget. they estimate growth this year with inflation at 4.5% to 5%. a pay rise expected, as moved to shore up infrastructure. yvonne: 51 is shut for a holiday. a mixed picture on monday morning on the regional benchmark. still in gain so far, but off the highs. shanghai now 3.5% down, the lowest level since november 2014, falling as much as 4% at the start of the session. we did wrap of g-20 on a good note, but now the focus shifted nationalhe china's
people's congress bear the volatility has returned to chinese socks. -- chinese stocks. the hang seng also down 1%. pmi data coming out tomorrow, manufacturing stilling contraction. overall, relatively contained when it comes to how china is affecting the markets. 4/10 of 1% up, slightly off the highs we saw at the start of the session. up singapore strait times with manila stocks also half a percent up. errors on thes chinese stocks. we did get a note coming from svg saying that they expect a climb to 3400 on these improved violations and policy measures.
let's talk about some movers in , missed estimates pccw. mtr down about 1.5%. lawmakers on saturday failed to vote on a bill to provide more provide for the railway project. they could possibly halt this project, pressure on the stock. f rising today afterook up look out grated for jewelers, shouldthe gold price support demand for gold jewelry. that will help turn around more than one year of sluggish sales
for the jewelers in hong kong. let's get back to our top story, g-20 financers say governments must do more to boost growth and central bank should take a step back. were there any specifics agreed upon? >> easier said than done. nothing too specific. this is the g-20 after all. view that we have got to move away from central and the authority as be on the fiscal side. the german finance minister was voicing opposing views on that.
we will see if there is consensus and they can make progress, but that is a slow burner. rishaad: if governments start structural reforms, each one of them is country specific. >> that's right. in a luxuryeed hotel far away from domestic markets, far away from getting a vote through a parliament on something that is unnecessarily unpopular with people, like making them work longer. would take the g-20 push on structural reforms with a penchant of salt. away see if they do shift from the monetary side and do more on the fiscal side. rishaad: what about the success? was it a success for the hosts? consider the narrative going into this, volatility and china and policy makers
asserting control, i think they would be happy today because the narrative has been one of china sending a central message about exchange rates and economy that seems to have sue the global fears. some of the criticisms were towards japan, not explicitly, but in the way these things work behind the scenes, concern race about japan moving to negative interest rates on the rest of the world. special that he might point to shanghai. that is a reality check. rishaad: thank you indeed. we will stay with the g-20. , that phraseforms seems to be everywhere, and probably somewhat overused. not a lot of people understand what structural reforms mean. i get to these meetings, and will talk about this chart i have behind me. we blameo about, do
something abstract, more than the problem itself? when you get policymakers gathered around the table and they talk about something , giving a solution to a problem bigger than what they are actually faced with, then how do we actually solve it? the term structural reform does tend to spike went ever these policymakers meet. exert to show you this from the actual communiqué. phrase for or five times. should it be discussed in forums like this? we were able to gather some comments from policymakers we spoke to.
listen in. >> we come out of here saying we need to boost growth. we need to have appropriate fiscal and monetary policies. again, different countries at different stages. and we need to focus on structural reform. people,ave so many exporting economies, emerging economies, and each one of them needs to do another step of reform in order to create economic growth. >> there is profound agreement on structural reform. it's going to be the real instrument. me is this chart behind let's yous, and it
look at what is making the news. you put in a keyword, and a keyword is "structural reform" and how many times it comes up in the news articles tracked by bloomberg. it is a one-year chart. every time you see a spike is ,hen we have these big meetings , the lead up to the g-20, and this is where we are at the moment, close to 120 mentions. do we actually get structural reforms? if you look back at what policymakers did, it is something to consider when we do enter these expensive conferences. do reaction get anything out of them? ishaad: that g-20 meeting done and dusted, but that focus remains with china.
leaders face a crucial test of policy reforms. , you are preview apart from today, gains. a lot of hard work still to be done. seet is interesting that we domestic investors not having .hat honeymoon of fact expectations, but the reality is that this comes at an unprecedented time of china, growth slowing the most in 25 years, every indicator slowing, manufacturing, industrial capacity, industrial production, inflationary numbers as well.
, consumption,s environment, innovation, they are not expanding fast enough to make up for the slowdown in the old economy. policymakers have a lot to do. david was talking about structural reform. that is the one everyone will to dealingn it comes with sectors facing overcapacity, zombie companies. interestingly, saying that if they take 10 percentage points suffering from overcapacity, 2 million jobs wiped out. tough positiona to be in for these policymakers. >> that's right. bank of america and merrill lynch saying this is not a policy platform for surprises. we will probably get a reiteration of what we are at he 7%, inflation at 3%.
but we will be looking out for some policy tweaks, some hint that we will get fiscal support. in terms of the debt overhang, the downward pressures on the yuan, they can't do much more. they have a slight easing bias, but policy will remain still -- rishaad: and they have tons of bullets in the chamber should they need them because there is scope to do all sorts of things, cut interest rates, etc. >> if you do those holes so measures, you will see greater pressure on the yuan, capital outflows increase, and certainly those record outflows last year have policymakers fairly concerned.
issue, how tont , and somehese workers of them already sitting around and not doing anything because of these zombie companies and factories actually producing anything. it is a question of what the government can do with them to relocate them without impacting that unemployment level, which we know beijing closely correlates with stability. rishaad: thank you very much. we have a check on some other stories making headlines out there for you. loss of almost $160 million in the fourth ofrter, compared to a profit $84 million the same timeframe a year ago. olam's investment in a sugar substitute at a loss, now available for sale. subpoenaed over possible role in bribes.
fifa under investigation for alleged bribery. the u.s. claims bribe money passed through a number of big banks, including citibank and j.p. morgan. the indictment does not accuse him of wrongdoing. chinese billionaires planning to spend more than $3 billion on a retail and leisure project outside paris called europa city , i theme park, hotel, shopping, conference centers. wanda has set his sights on beating disney, his second major deal. in january, he bought legendary entertainment for $3.5 billion. coming up, months and months of political turmoil. now strengthening his crypt on malaysia. we have more on that after this short break.
>> it is 10:46 a.m. and hong kong. these are the stories making headlines. moderate candidates have won all seeds into tehran in a sweeping victory for president hassan rouhani, following a high a referendum on iran's nuclear deal with world powers. reformist coalition has an early lead in a separate vote for the assembly of experts, a senior clerical body that selects iran's supreme leader. abort latest to launch of falcon nine rocket at the very last moment. the mission plan to place a satellite in orbit an attempt to land the booster on a floating barge. it failed on three previous attempts. was playingcompany
down expectations of success. it is not clear when they may try to launch again. security tight outside the dolby theater in los angeles where the 88th academy awards are getting underway. extra measures in place for the arrival of vice president joe aden, due to introduce performance by lady gaga. this year's oscars hit by a controversy over lack of diversity in hollywood, all top companies white, leaving other stores to boycott the show. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. the second in command of malaysia's ruling party suspended for undermining the organization, the latest sign the prime minister najib razak strengthening his grip on power. correspondent has -- what has happened? what has changed? after two hours of
deliberation on friday, the ruling united malaysian national organization suspended deputy president muhyiddin yassin. until then, he had remained the parties number two even after being dumped in july. the party says he has undermined the party. he has been calling for the prime minister najib razak to step down. najib razak is embroiled in months of political scandal. there are questions about political donations, how 680 million u.s. dollars from the saudi royal family made it through his personal bank account. members whoed party have criticized him. najib razak has repeatedly denied wrongdoing, and the attorney general appointed by
the government found no criminal offense and close all investigations. recent: given these developments, how secure is najib razak? i guess it's also a matter of how secure he feels. >> that's right. he feels secure. his position is song. he has silenced critics, further strengthened his position within the ruling party. he still has the support of divisional chiefs, who are powerful and influential. since coming to power seven years ago, najib razak has moved to shore up the parties key base , increased handouts, back preferential access to things like education. yes, it looks pretty secure at this time. rishaad: how has najib razak
responded to the criticism that malaysia looks like a dictatorship? >> #trendingbusiness -- 's malaysia is still a country that upholds democratic practices. also pointed to the credit ratings as proof that the country was well run. he noted that it was important for malaysia to remain politically stable, hence the actions he had to take. the prime minister has come under eamon's criticism from the likes of the former prime minister because he has clamped down on dissenting views. on friday, the editor of an online news organization was said to have been questioned by police. its website was blocked by the government.
on top of that, the government is now proposing amendments to the law to allow it to crack down on journalists found to have received leaked documents. these are the latest of elements. rishaad: thank you very much. if you want a successful avoid what has been happening with equities, ask an analyst what to buy and sell and do the opposite. details when "trending business" returns. ♪
rishaad: this is "trending business". this might seem a bit crazy, but the successful strategy may have been to do the opposite of what the experts have been recommending. the least favored stocks beating the most loved ones. tell us about this. >> the most loved stocks by analysts underperforming and doing the opposite because of a lot of fund redemptions with the instability we are seeing in the stock market. as investors move money out, they cash out the ones that are
highly held. at the same time, they are going into passive index tracking funds, going to stocks not mr. loved by analyst. let's have a look at what kind of stocks of the most favored, and the least favored as well, by the analyst. >> the high earnings growth stocks tend to be the ones most favored, but they have performed quite well over the past few years, making them more expensive. that's another reason why do have been underperforming the least. the least favored stocks with lower earnings growth, energy, finance. rishaad: what are these people saying about what will happen from here on in? or should we listen to them? this as a temporary phenomenon. they believe that fundamentals will be the supporting factor, and the trend will reverses people and those most loved
analyst stocks to cheaper and people focus on growth. again, it is a battle of growth versus value. that is what we are talking about here. >> right. obviously fund managers hope that to be the case as well. rishaad: thank you very much. film's, the on north american box office may have seen the first take flop of the year, "gods of egypt." we are looking at ticket sales of $14 million. facing a tough time, because in order to break even they have to recuperate $140 million outlay. what is the movie about? it is about egypt, a mythological tale. a superheroainst
movie "deadpool". panda three coming in third. we have the all ceremony going on as we speak. that is it for the monday edition of "trending business". .tay tuned for "asia edge" show, ats on today special one-hour-long show looking at the indian budget. that is 1:00 p.m. hong kong-singapore time. "asia edge" is next. ♪
growth. also coming up this hour, digging out of the deficit. india presents a budget of a couple of hours, promising to reduce asia's biggest fiscal shortfall. and the asiamalaysian ruling party leader tightens his power. policy makers in china try to restore faith in economic management. though stories and more on "asia edge." a quick check on the markets. as volatility returns to china, shanghai stocks are down 3%. we are carrying some the losses that we saw when the gates opened.