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tv   Trending Business  Bloomberg  March 17, 2016 9:00pm-10:01pm EDT

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♪ it is friday the 18th of february. i am rishaad salamat. this is "trending business". ♪ rishaad: here is a look at what we're watching asian equities heading for again. less optimism in tokyo. the yen jumping once again. coming under more pressure because of that, reluctant to raise pay. japan says another blow to the stalling revival plan.
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property in china is reasonable despite official stimulus spending, tier one surging higher. some advice, don't speculate. let us know what you think. follow me @rishaadtv, include #trendingbusiness. some gains here hot on the heels of what we saw on wall street and in parts of europe. happy friday -- a happy friday for the markets after central bank action and economic data around the region. where seeing this dovish fed effect playing out, without japan, of course. strength coming out of markets heavily dominated by mining stocks. a surging commodity prices benefiting from the u.s. to
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dollar dropping. up, driven by iron ore miners. asia, online, southeast dominated by commodity stocks. the straight times up by half a percent, malaysia up by 3/10 of 1%. extending losses. affect, a day of resurgent yen strength yesterday , another 3/10 of 1% today. that 110 handle briefly against the u.s. dollar, the strongest for the japanese currency since 2014. trading still at that 111 handle. dollar strength hitting other asian currencies, the aussie
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yuan.r, the korean wo it is a bit of a tug-of-war, one that bears are winning. gains ands driven by these commodities, materials, energy stocks, but the bearishness coming through from that yen in effect. , other carmakers down over 4% when it comes to mazda, one of the leading losers when it comes to the nikkei 225 index. the yen bad for repatriated profits. we are seeing strong gains for materials, industrials, up by close to 2%. the china open, commodities rally good for china stocks and futures telling that. we will see an upside open. rishaad: government stimulus in china sent property prices soaring in the biggest cities, but a billionaire says they are "reasonable."
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after he spun off his real estate assets, we have the story. >> announced an underlying profit of $2 billion, but says the real estate market in hong kong and china remained challenging. thinks that when it comes to property prices, they are at a reasonable range. take a listen. i don't think housing prices are searching too much and mainland china. people might have seen prices drop in one or two projects, but in other chinese cities only by less than 10%. uncertainty over the economy and a glut of homes. we have seen prices rebound sharply as the government expand stimulus. we'll get the latest prices in china and about half an hour and see if the recent gains and prices hold steady in february. new home prices rose in january and more than half the city's
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the government follows. meanwhile, some chinese developers are caring on with business as usual. the third largest developer, even as investors price and a higher risk of default. greenland announced more than $300 million in chinese acquisitions and will list trust in singapore. notes overpread 2024 treasuries as wide and 48 basis points this year. 48 percent of greenland is owned by the shanghai government. says that analyst despite the high debt leverage, greenland's liquidity should be fine because of its state-owned enterprise background. are worriedpeople that such leveraged strategies are just beginning to look out of place with the new government policies of deleveraging and reforming state-owned
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enterprises. rishaad: we will have a detailed look at that story later. we do want your opinion. tweet is your lots @rishaadtv, include #trendingbusiness. price of be getting a tencent when the market opens in about 25 minutes. sales jumped by more than anticipated 45% in the last quarter. let's get to the numbers and break them down. talk us through the highlights here. >> profits missed, but revenue better than expected. that is due to online advertising sales and also mobile games. tencent is following facebook's footsteps and driving more to online platforms, which have a combined user base of one billion. the company is treading a h, but preserve user experience.
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it's working with hundreds of local homegrown studios trying to cultivate a war chest of content and convert them into mobile games. surgems of costs, they due to acquisitions from titles including nba games and hollywood studio movies and also tv series. the company is engaged in a alibaba, a baidu and game of whoever has the bigger war chest. the company is now charging as 0.1% fee for transactions that ,o above a certain threshold with aims of trying to keep more users on its platform, while also trying to curb surging growth and content costs. right, let's have a look at some other stories. abenomics.w to
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>> that's right. a blow to workers at japan post, not getting any pay rise this year. japan post says the reason is because of the central banks negative interest rate policy. negative rates could have a large impact on its banking and insurance industries, divisions interest on yields. the move is a blow to the aim of defeating deflation and reviving the economy. negative policy rate was supposed to spur the economy. japan post will pay a one-time bonus this summer. it went public last november in a $12 billion ipo, the biggest privatize a deal the century. the giant is one of the nation's biggest employers. soaring food cost and south korea could make kimchi more expensive. expectations low around 1%, but
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a closer look shows the fresh food index rose 9.7 percent last month, the most since 2013. the average cost of onions doubled from a year earlier. cabbage used in kimchi jumped to 66%. snow may have and contributed to the surgeon fresh food prices, and also a drought which hit the agricultural sector. cheap oil is the biggest factor behind the weaker inflation number. google is selling its boston dynamics robotics unit. e division drew millions of people to youtube. executives at google parents alphabet don't believe the unit will produce a marketable product in the next two years. google bot boston dynamics in 2013 as part of its push into robotics. buyers include amazon.
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rishaad: on a website, where we have a one b in dollar startup. tapping the pulse of the chinese property market, the latest date in 20 minutes. chiefgoldman sachs executive to discuss what is going on when it comes to volatile global equity markets. ♪
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rishaad: emerging markets have rallied after the feds surprisingly dovish statement. many of them erased 2016 losses. should investors returned to those emerging markets and look at yellen's plan of gradual
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tightening? joining me chief executive of goldman sachs global asset management. how you looking at this? ofthis has been a year emotional extremes. first excessive pessimism, now we risk excessive optimism, but in our view the markets have not changed. there are regional risks and specific country risks, but also some are worth looking at. 2% of exports only go to china, minimal, but where the damage could come is through this other mechanism, china hurting developing countries. >> absolutely. looking a lot of time at the impact of what is going on in china. there are positives and negatives.
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the ship to a consumer led economy will not be easy. rishaad: it is a stuttering shift. tourism, japan expensing tourism unheard of, same in australia, look at korea , difficulties related to the slowdown in china, but also opportunities with exports and things very does cosmetics. rishaad: a lot of people have got into that cosmetic space. one fund manager has been talking about korean cosmetics for a while. it is a great play. >> it is a very interesting play. importantly, what you have to do is look for the bright spots. it is an active moment investing . as you look at emerging markets, look at big currents and india, the macro, the budgets, which we look at as constructive, but also the micro.
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business, online retail, 14% in korea, 12% in china, only one person in india. rishaad: everybody is looking at india to follow the same trajectory as china. if it does have that, it is an amazing thing. >> absolutely. it will follow a different path. it is a different country. we had 40 international investors from around the world and india, they were pleasantly surprised. the infrastructure work, the airlines ran on time, the meetings were constructive and interesting, and there was an upside surprise in the exporting going on from india, including to the u.s.. rishaad: that is something that india is not renowned for. are the currents you are feeling when it comes to the global economy? when we look at export data from emerging markets, it's looking slack. >> it is looking slack. when we look at the macro, we can avoid looking at what the
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fed and other central banks are doing. you have seen the fed turned dovish. that does give people hope that they are looking at the global economy to be constructive. you saw with the ecb did, and we see that is as the first step in recognition that currency is not the only level. there has to be cognizance of the challenges banks are facing. situation, have a impetigo europe and japan, with negative rates. central bank saying to the banks, land lynn, lynn, and then regulators saying get your tier one capital ratios in order, and that ties one hand behind their backs. >> absolutely. the moves the ecb made related to credit and their moves on corporate bonds, certainly acknowledge there are other ways to stimulate and to try to untie that hand. even as they don't back off from the new requirements. the remains to be seen at japan
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will try to be more creative in their application of the same principles. sishaad: the question i haven't global equities endured the worst? yes, butd like to say despite the declines in volatility, we are still in for more volatility in spots. it's hard to imagine we don't get more volatility out of china. again, i think it would be wrong to be excessively positive, just as it was wrong to be excessively negative a month or two ago. overall we are constructive on the year, and they're good returns to be made for actively engaging stock pickers. rishaad: what about the price of oil here? is it benefiting the consumer yet? surely that is like in interest-rate cut. >> it if asked consumers in
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different ways. when you look at the u.s., you've seen that money put in people's pockets rather than spend. i think that is wrong to assume that the major decline in oil prices immediately means people run out and buy a new washing machine or car. it takes some time. i think you're starting to see that transmission come through. when you look at other places where the transmission vehicle is different, such as india, the impact is in a different place. rishaad: they should be taking opportunity to remove those. >> exactly. you see those moves, the push for the state power copies from the central government to get rid of subsidies. you see the impact in the budget, whether using that ose lower oil prices, to enable those changes. one final question, what's your take on japan? so many people are saying that
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abenomics, just give it time. it will work, but a lot of people have lost their patients. >> it is a tough boat to turn. we will deftly be watching the boj for more creative enterprise in terms of how they address the economy, and i think there is still room for great investments in companies with good governance, because that is going on. that changes happening, and influential people in japan a pushing it, so it's about picking the right stocks. rishaad: great to talk to you. news,t had this breaking the biggest gain we've had, up half of percent, that reference rate now standing at 6.46% against the u.s. dollar. >> these other stories making headlines. south korea says the north has fired a ballistic missile into the sea. the military says the weapon flew about 800 kilometers, but didn't say what type it was.
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earlier this week, kim jong-un ordered new tests. south korea and the u.s. stage the biggest ever joint military drills. the united nations in washington have hit the north with their toughest sanctions yet after nuclear test in missile launches. the economist intelligence unit says donald trump as a presidency could be damaging to the global economy as terrorism. billionaire's exception right wing stands are potential dangers. the london-based group warned that trumps militaristic tendencies would become a recruiting batter -- banner for jihadist. scans of king test burial chamber may answer and history as old as the pyramid's. the image reveals hidden rooms off the main tomb, with the
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possibility of organic and metal objects. nefertiti was the principal wife of tutankhamen's father. the tomb was in the pharaohs capital. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. just ahead, toshiba shares recovering after that tumble on thursday. what caused that dramatic plunge? ♪
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rishaad: you are watching "trending business". i am rishaad salamat. recovering, the latest controversy for a company that has admitted accounting errors. what more can you tell us about
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this. is the trauma that will not in for toshiba. a year ago, they first disclose potential accounting problems. that dragged on last year. ande was an internal probe japanese authorities investigated toshiba. record fined in a for toshiba and japan, and now bloomberg reporters have reported that u.s. authorities are also investigating toshiba for its accounting practices. this is the u.s. department of justice and the sec, looking at potential losses in the nuclear power operations at toshiba. when toshiba did the internal report, it disclose there were some issues with the unit that includes westinghouse. they talked about some of the
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accounting for losses at that unit. ithaad: how significant is that toshiba is being investigated in the u.s.? investors have taken it quite seriously. when this news was first reported yesterday, shares dropped fairly substantially. investors had been hoping the probe was nearing an end. toshiba has gone through the investigations and sold off assets. yesterday they announced they were selling their metalico unit -- medical unit. investors were hoping this was near and inend. there are concerns that this could lead to more serious implications for them down the line. rishaad: what is the word from the company? >> toshiba said today they are cooperating with u.s. of 40's, the department of justice, and sec. they said according to their
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internal report that they had found some issues, but are cooperating and will work with the authorities on this. rishaad: thank you so much for that. the latest on toshiba. let's have a look at some other stories making headlines. j.p. morgan received the fed's rishaad: were getting the latest
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figures for february on the other side of this break. we have the market open in hong kong and shanghai. ♪
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rishaad: a look at our top stories. japan atities outside highest levels as crude oil extends gains and dovish fed. elsewhere, material and energy shares leading gains with chinese markets looking set to open to the upside. says it's working with u.s. authorities after units were asked by the justice department to provide information. sources told bloomberg that to
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shiva is under investigation that it had ♪ id losses at its nuclear power operations. rejected its workers request for a pay rise, blaming ,egative interest rate policies undermining the goal of defeating inflation and reviving the economy through wage and price growth. japan post is one of the biggest employers with 224,000 staff. , property prices out of china for february, latest numbers. they: take a look at government's efforts to boost the property sector filtering in. we are seeing china's new home prices in february rose and 32 cities year on year. is that few are less than january, when there were declines and 38 cities.
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that is among the 70 cities tracked by the government. china's new home prices also , 40 seven on month cities, compared to 38 in january, so that is a beat, more than we saw them rise in january. also for shanghai, which is the financial, home prices rose 2.4% month on month. 12.9%,ing, prices rose year on year basis there. also, existing home prices in the capital rising 3.2% month on month. in february, new home prices rose month on month in 47 cities. many more than we saw them rise in january, just 38 cities. seeing new home
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prices, excluding affordable housing, up in 32 cities year on year. down in 15 cities when it comes to month on month, down and 37 cities year on year. we have seen the chinese government trying to boost, cutting down on some taxes, also cutting down payments, mortgage rate removal of controls. new home prices rose month on month and 47 cities, compared to 38 cities only in january. we are seeing them down though month on month and more than 30 cities as well. see, what we can get on china'slines here, february new home prices rising and 47 cities compared to 38 in january. rishaad: you think that is good
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news for property developers good let's see how the market is reacting. haidi: where in the first few minutes of trading in hong kong and mainland china, already seeing markets coming off that opening high, up by half of percent, down to tens of one person in positive territory in shanghai. up the rational levels of prices in chinese real estate. we are seeing quite some swings for the chinese market, up by a quarter of 1% at the moment. let's check in on property stocks. we've got a bit of a mixed bag. are the hong kong share listings.
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country garden seeing an upside, one of the developers of toperties heavily exposed third and fourth tier cities where the oversupply glut is exacerbated. the housing minister himself in china saying it has been a divergent recovery, where you see overheated markets like -- like beijing, almost 13% gain in property prices. shanghai, up 50% of loan. not of the smaller cities doing very well. rest, you through the china's largest property developer up by half a percent. wanda seeing some downside, focused on the commercial sector. thanks.
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china telecom will report today. a mixed set of numbers. analyst is with me now having a look at this industry. what is the growth potential here and what's going on here? both china mobile and unicom have ms. the market on revenue. an easy year for the chinese telecom industry given mobile penetration has reached 95% since the end of of 2014. rishaad: what about 4g? >> 4g is very promising, but all the users are from the migration of two g and 3g. they're allt's what after, average revenue per user,
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trying to drag out as much money as they can. government has reduced tariffs on 4g dramatically, maybe 30% or 40% on unit price. year the this government will not issue any more cuts. rishaad: what are the challenges and opportunities? >> the challenges will still be andinued migration to 4g the price reduction, and also the competition. china telecom and unicom have ramped up their 4g networks and start to cooperate on network sharing, so they will improve their 4g network quality. the government is instrumental in this industry, aren't they? how are they looking at it? they reduced the price dramatically to satisfy consumers. this year, they need to strike a balance between growth and affordability.
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they are targeting telecom industry growth by 2% or 3%, so they will be more careful on the price reduction this year. rishaad: thank you so much. having a look at some other stories making headlines. from worry and beijing automotive building a theme park -- ferrari and beijing automotive building a theme park. it's not clear where the facility will be built. the agreement specifying in one of china's main cities. retail supplier tumbling the most in three month's shares down by 4% after saying it expected 2016 to be a challenging year with little sign of a turnaround in the near term. ung beat estimates despite a drop in sales and profit, but says margins are being hit from
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competition, coming at a time when retailers are offering discounts. two senior executives of the bc may have been involved in the $100 million bangladesh bank heist, implicated by the philippine senator investigating the case. managerthe branch appears to have acted "in error." the political crisis in brazil has taken a dramatic new twist as a judge suspended the appointment of the former .resident , hee was appointed minister would've had immunity from prosecution. towhich is what really led the pictures we have seen out of brazil across major cities.
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it was probably the shortest tenure in history. >> a judge issued an injunction blocking got appointment on grounds that his nomination to that function would lead to interference when it comes to political and judicial activities. the government said it was perfectly legal. they are appealing that injection. he remains minister, but can't perform all of the functions until legal questions are resolved. it happened at the same time when the impeachment or seedings --inst the current president impeachment proceedings against the current president were revived. to really5 sessions go through the process of determining whether they will recommend the impeachment of the current president. it is a developing story. here.d: a long way to go
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it's no secret the large bali large body politic is against what is going on here. >> it is very polarized. thee's a reason why protests are happening. take a look at some of these pictures we've managed to gather across the country. supporters are set to stage their own protests later on, including in places paolo.n paolo -- san look at this tweet from the president of the eurasia group. it looks like he's quoting what a's back in theul 1980's. events,c twist of
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really getting a lot of traction. of eurasia's country analysis came out this morning and said it looks like the vice president might just become the president. rishaad: as you say, it has legs. thank you very much. china be about to ditch its one-size-fits-all approach to property markets around the country? we have a closer look. that is coming up, next. ♪
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rishaad: let's get to that breaking news, china posting a leap in property values, prices rising and 47 cities. what to do make of it all? >> the property market is in a rebound. it has had a week year last year
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, but at some point the monetary easing happening would have fed through, so which are seeing is prices starting to rebound, but especially strong in certain tier one cities. 56% in a year, which is absolutely insane. >> some of it is probably speculative, but some of these provinces are growing faster. china is not a homogenous economy. are doing better than agricultural and heavy industry and the northeast. you have to look at where the pockets of growth are. especially as you mention the northeast of the country. >> it's always going to be difficult when you have industries that specialize and you try to transition into something else, so i think what will happen is the government will provide some further
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support, fiscal policy stepping up and eat some of the pain of the transition. rishaad: that's just it, isn't it. it's not one unitary market. up intoomy is divided provinces and sub profit since -- sub provinces. why does one-size-fits-all program still in place. >> it's not quite one-size-fits-all. fiscalan transfer reserves and fiscal policy across places, c can spend more and places that are suffering from a more prolonged slowdown. , interesttary policy he rates are blunt tools, but you have some easing are tightening restrictions on house purchases, and they have been quite willing to use that
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according to whether the market looks better or worse. was there anything on this in the national people's congress? >> they are earmarking a certain amount of money to help workers who will be laid off by the layoffs you will see whenever you get structural reforms and also the reduction of overcapacity, exquisitely mentioned, so it's important to note that although they are prioritizing growth, it does not represent avoidance of hard choices. they are still going to close having people laid off, but any government in that situation would quite reasonably provide some help for those people. not justovercapacity, in the state owned enterprises, but overcapacity in terms of housing in tier three and tear for cities. on aggregate, i would have to say there are a lot to people who want to move into the cities.
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a lot of people in china still work in agricultural and live in rural areas. they would do better and want to move to cities, it's just that now some of these regions, especially the ones were talking about which are going to a difficult transition, clearly as getting growth, and it is cyclical as anything else, people are not going to move if they do not think they will get growth, so it is up to the government and policy to get growth back. rishaad: 6.5% minimum growth. that's not to be sneezed at, isn't it? >> it's not, but the slowest in 25 years. rishaad: compared to 10 years ago, it is a massive difference. theou still have to create jobs, well-paid jobs, that people want when you want them to move into the cities. 6.5% is quite a realistic target. it can be sustained, but requires short term policy and
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the reforms that were talking about. wasaad: specifically which the most encouraging thing for you out of the national people's congress? >> the focus they have on growth. theuld be more worried if government was all about supply-side and ignoring what looks like to be a series lack of demand, sustained deflation. this slow down right now is not just affecting companies that have this overcapacity, but also affecting companies that in a normal situation would be profitable or competitive, and i think it would be a mistake if you allow those companies to also face some of the stress. it would be unnecessary pain. rishaad: thank you so much for that. time to look at the stories making headlines around the world. eu leaders struggling to find a solution to the refugee crisis. , how toast-track asylum
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resettle more than 70,000 people from refugee camps in turkey, and the port migrants -- deport migrants. turkey is seeking extra funding and a quick answer on its bid for eu membership. taiwan says the regrets his decision to open diplomatic relations with china. the nation had been one of the few remaining countries to have formal ties with the taipei rather than beijing. cut ties with taiwan, but promised to remain neutral. end of an spell the unofficial diplomatic truce between taiwan and china over wooing each other's allies, now only 22 countries remain formally recognized in taipei. has revealed for the first time how much the former president was paid. million, the3.7 disclosure part of reforms fifa
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is adopting. swiss prosecutors have lunch criminal proceedings for breach of trust and other offenses. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. coming up, seaworld will end its most controversial attraction. details are on the way. ♪
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rishaad: you are back with "trending business" coming to you live from hong kong. equitiesng day so far, moving to the upside, if you don't count japan.
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asian stocks rising to the highest level so far this year. crude oil gaining, $40 a barrel at the moment, and the dollar helped the recent falls after the federal reserve reduced its interest rate outlook, far more dovish than had been anticipated. that's the situation for the greater china market. in japan, steep falls, 1.5% down, attributed to the weaker dollar, because the yen has strengthened the, putting pressure on these exporters. korea still below that psychologically important 2000 level. further south, australia and new zealand, look like this, upside. asx 200 a fraction higher. lumpur, taipei, a story where we are seeing with taipei up by three
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quarters of 1%. , social mediaack reaction to the news that seaworld will stop killer whale shows. pressure rising on the theme parks since its care was criticized in the documentary "blackfish." commenting oneen the power of the documentary and social media in order to push for change. a seaworlde, it was decision. we have a trailer of the "blackfish" movie released in 2013, telling the story of a that made headlines after killing its trainer. since the documentary was has seen seaworld attendance and share performance fall. it is part of the effect that this documentary has had. we have seen comments on social media, mainly lauding the move
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by seaworld. friends saying it is a step in the right direction, thanks to you. it linked to a statement supporting, saying the decision to end captive breeding is a step in the right direction. we've seen a tweet from david bloom, fantastic news. main goal relies. that refers to the california a welfare and safety act introduced by him. he is a california state assembly man. he had been pushing for this, but it had been delayed. he has one of the pushes wanted to see the result of, and there you go. rishaad: it's not going to have the show anymore.
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>> you would be hard-pressed to find people to say this is a terrible thing. we've seen a lot of support for , and sharesworld did rise after the announcement, so investors awful has supported -- also have supported this move. rishaad: thank you. before we leave things, the literary world counting down to a momentous auction, shakespeare first edition said to be sold in london. christie's is doing the auctioning, it is the holy grail of publishing. 1623, a collection of 36 plays in a leather binding unusual for the time. only 233 first folios are thought to exist, and this one could fetch nearly $2 million. april 20 3, 400 years since shakespeare's death,
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celebrations planned around the world. up next, home prices in china's biggest cities powering ahead of their counterparts. the issues facing china's property markets. ♪
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announcer: from our studios in new york city, this is "charlie rose." charlie: we begin this evening with the supreme court. president obama nominated merrick garland to take the seat of late incident justice scalia. he served on the federal court of appeals for the d c circuit. speaking from the rose garden, the president demanded a fair hearing. lawmakers reiterated their intent to block of that process.

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