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tv   First Up With Angie Lau  Bloomberg  March 20, 2016 7:00pm-9:01pm EDT

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♪ angie: a note of caution as beijing makes growth its top priority. a warning that china's debt levels are too high. positive on negative, christine lagarde says rates below zero may be good for the economy. we have an exclusive interview. evidence ars find was behinded gang the $100 million bangladesh bank heist. welcome to "first up" coming to andlive from hong kong
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streaming on mobile and bloomberg.com. markets in asia, this first trading day, australian equities are climbing fractionally higher. at $.75,e dollar weakening slightly against the u.s. dollar. new zealand, this is the picture there. also climbing a fifth of 1% as asian equities sees its fifth week of straight gains. market we have to tell you about today is japan, where people are celebrating vernal equinox day. after the national people's congress gave priority to achieving at least 6.5% annual comments suggesting it will be a difficult balancing
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act for beijing. we have a look at all the challenges. haidi: it is interesting. 6.5% to 7% that growth target announced, it did clarify that policy message that there giving greater importance to growth, to meeting a certain level of growth, rather than putting through supply-side reforms, also the process of unwinding the leverage that has been steadily building up. the pboc governor spoke about how this is in the mindset of people and how they view china. let's take a listen to what he had to say. , i think the view on china's reform going forward, china's economic future, and also the renminbi exchange rate, if we can go back to normal, than those discussions will be
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soon gone, and we have seen evidence of that argument dissipating. haidi: having said that, there are legitimate concerns with the level of debt. gdp, the ratio the china has, 250%, and you look at this isric in particular, which total social financing in china. we have had a lot of easing coming through from beijing, and this is the one that got people worried that they will be adding to leverage when they should be deleveraging. he talked in particular about the corporate debt overhang of bad loans as something that needs to be addressed while
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still trying to maintain this medium level of growth and development in the economy. angie: but how? things, quitethe debtroversial, is equities crops. the financial institutions, the financial sector, is still fairly undeveloped. that's going to be something they will need to address. is looking at plans to convert that into equity stakes, and this seems controversial, because what you have are banks that can take the bad loans from corporate's and conferred them into the stake of the equity of that company. it is great for the companies and the balance sheets in the sense it gets bad loans technically off the books and frees up more money for the banks to lend --
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t alongbut it passes i to those investors. we also heard from the vice premier saying there are no systemic risks and china won't tolerate them, and what needs to happen needs to come through more and better regulation in the financial sector. take a listen. >> we will strengthen all regulations and tamp down the bonds, foreign exchange, and property markets, and make sure there is no systemic risk. we heard that note from moody saying they down graded chinese debt. weekend that we haven't cared too much about it acause it did not result in market reaction or shortselling
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and the chinese market or a huge soreciation in the yuan, keeping a brave face despite these challenges. china has another new problem, unpaid bills. payment delays have seen accounts receivable swell by more than 20% over the past two years to $590 billion. we have the latest. >> good morning. china has 590 billion problems, it seems. this is a story on the bloomberg. the fourth story this can see it is a big waiting game for chinese firms. t since 1999 have we seen chinese companies having as much as getting chinese customers to pay for what they have bought. average of 83 days for a
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public firm to collect cash for completed sales, almost twice as payment delays spread across all sectors. accounts receivable's blowing out by 23% over the past two $590 billion, which is more than the entire annual economic output of taiwan. you can see here that this is equity of on common companies in the shanghai composite index, and the blue line here going higher is the net debt ratio. analysts are saying that the fact that chinese companies aren't able to collect cash from their customers means it is having a knock on effect into the entire economy. we know there is a slow down, but also the profits that these chinese companies are reporting could be weaker than what the
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numbers are because they don't that theydity, cash have been able to collect from their customers, so a concern that we are seeing what is reported not perhaps in line with what were seeing from our figures on the bloomberg. another problem in this economic slowdown. angie: thanks. we will get more on china on "first up" this morning. chatham house director joins us live at 10 minutes past 8:00. we will be speaking to the australian trade minister. >> were kicking off our coverage reeves atng with tim 8:40 a.m. other headlines, foxconn's takeover of sharp is at risk of collapsing as the delay in finalizing the deal continues.
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foxconn is seeking to pay up to due tos for stock concerns about its liabilities and future earnings. it has been 25 days since sharp's board voted in favor of a takeover. foxconn says the working towards a final agreement. ianjin, investors agreed to buy $560 million of stock great the bank is scheduled to start trading on march 30. at a time when china is tightening control of the internet, mark zuckerberg met with china's propaganda chief. he was in beijing to attend an
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economic forum over the weekend. in the meeting, he said he hoped facebook could work with chinese internet companies promote the development of the web. facebook and other social media such as twitter are currently banned in china. with the tantalizing $13 billion offer dangling in front of it, starwood's found it hard to say no. the hotel chain said it plans to accept the takeover bid from anbang insurance. give us the details of this deal. >> starwood will accept this tying up with two increasingasically its bid by two dollars, $70 a cash. $13.2 billion in
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is a saying this offer proposal. has att international deadline of march 20 to come up with a counter offer. it said it is carefully considering its alternatives. in november, starwood had agreed on the deal with marriott, cash and stock offer worth $59.31 a share. bang deal goes ahead, starwood will have to pay a breakup fee of $400 million. higher, andnding the bloomberg index of hotel real estate rose 1.2%. angie: despite that feed, presumably still ahead when it comes to the bigger deal, but
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tell me about starwood. if the deal goes through, then anbang has properties in cuba. >> starwood has announced that it will manage and let properties in cuba, signing the hotel groupy a u.s. in cuba, and this is slightly ahead of president obama's historic visit to cuba today. starwood signed a deal to hotels,to hotels -- two and also has a letter of intent to convert one hotel into its luxury collection, according to the chief of latin american operations, multibillion-dollar investment to bring the hotels up to starwood standards. up next, weg preview all the important economic data out of asia, including three interest rate decisions and japan's key inflation data. more when "first up" continues. ♪
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>> it is 7:15 a.m. in hong kong. these are the stories making headlines around the world. in cuba for arrives a visit, becoming the first sitting president to travel since calvin coolidge in 1928. obama and family accompanied by u.s. lawmakers from both major executives,porate and prominent cuban-americans. the president restored diplomatic relations and removed restrictions, but only congress can that the trade embargo in place since 1962. russian investigators say the flight recorders recovered after etcrash of a passenger j are severely damaged. all were killed when it crashed and burst into flames will making a second landing attempt in russia's south.
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the airline's ceo says conditions were appropriate, but conditions bad. three other flights were diverted elsewhere. iner is confirmed the death of its former ceo in a plane crash. the ceos wife, son, and daughter also died when their plane came down minutes after takeoff. to president paid tribute vale. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. time now for a look at what else we will be watching and asia this week. nike releases third-quarter earnings on tuesday, how the company is faring and china. the second quarter sales jumped 24% to 938 million dollars,
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while future orders increased 34%. hosting a forum, china's answer to the davos meeting. we will be there with live updates and guests. thursday, singapore releases its 2016 budget. the government will be particularly prudent with this year's finances. , thepore's economy grew 2% slowest pace since the financial crisis. it expects 1% to 3% this year. another moment of history in myanmar, the stock exchange firstfor business, the and only stock to be traded. it officially opens in december, but until now there has been nothing to trade, five more companies are lining up to join the board.
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let's take a look at the key data coming out this week. a, when you andv i on this week? , the have a decision central meeting of the bank and philippines. we expect them to keep rates on hold. they are currently at 4%, but unlikely the central bank will do anything to exacerbate volatility ahead of the elections in may. we expect to see no changes there. also -- angie: we've seen more robustness ahead of the elections, right? >> they went to be one of the brightest spots in the region. 6% thisemains robust, year, however the philippines has been expensing headwinds. angie: corruption? >> exactly.
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even though they've done a lot to boost foreign investors, for example the bank liberalization act, but the country still ards the lower end of business ranking, so there's a lot the new president will have to do. angie: ahead of that election, rates on hold, that's your forecast? >> yes. angie: thailand also has a rate decision? >> they have been on hold for almost a year. we think they will continue to at 1.5 percent, a historic low, so they have to be cautious about lowering rates or they can risk capital outflows. most likely it will continue to do that. they do have some room as the fed revealed a more dovish tone,
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it's time to cut rates if they want to do that. tone: the feds more dovish has given reprieve to a lot of national economies. >> definitely. there has been a bit of a route in asian equity markets as well as fx markets. rates,nesia, they cut and maybe they have room to continue doing that in the second half of the year, sort of appreciates against the dollar and a pickup in equities as well. the dovish tone helps in the short-term, but we still forecast another two hikes this year. angie: of course it doesn't help japan. we've seen that strong yen continuing to push through ahead of cpi data coming out of japan on friday. we expected to adjust
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marginally from 0%, so still very low. falling from the last meeting, it sounds like the bank of japan is ready with more monetary stimulus. the expectation is they will expand the rate at which they purchase assets. angie: when? >> as soon as the next meeting. in addition to monetary policy, it is important to reduce spending in japan, and there was that the g7 would be a more suitable platform. you think we will see some ready projects get into play here? >> there is a good chance we will see more fiscal measures announced. angie: a busy week. thank you for outlining all of that. coming up, christine lagarde said vietnam may be vulnerable
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to external shocks without banking reforms. she speaks exclusively with bloomberg television after the break on "first up" ♪ .
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christine lagarde says vietnam will be vulnerable to external shocks if it does not push through reforms to its banking system and restructured state owned enterprises. the imf managing director currently in asia right now. our own bureau chief spoke exclusively with her, asking about the effectiveness of negative interest rates. >> if we had not had those negative rates, we would be in a much worse place today, so let's see whether it kick starts the process of fueling credit to the economy, changing the behavioral pattern of people, and changing
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the strategy of banks as well. it might be good for the economy, maybe not forever, but for some time. itshina recently had national people's congress, there was concern the chinese government is to focus on stimulus and short-term growth at the expense of reforms. what is your take on that? >> we believe china will continue to grow the number one, and our assessment is 6.3%. we have to assess the decisions that have just been made by the chinese authorities to factor in those decisions and see whether we forecast a little more growth possibly. >> you recently urged asian nations to take the lead in -friendlymore growth policies to counter global economic challenges. which country specifically need to work on this, and what specifically would you like to see? >> the whole region needs
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infrastructure, and the financing of infrastructure, whether it is public or a mix of public and private, is actually going to have a short-term impact on growth, as well as a medium-term impact on improving the productivity factors. to see that across the region would actually be extremely helpful, and that has been recognized by many investors now. >> during this visit to vietnam, you said the country was falling behind regional competitors if it does not push through big reforms. how real are those risk and what is the worst-case scenario look like? >> the risk is from being slightly vulnerable to becoming very vulnerable to external shocks. if you have a very significant tightening of the financing that is available, because of monetary policy decisions made elsewhere in the world. transition a strong
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of the chinese growth model. commodity prices that will eventually fall lower and for longer, then would it exposed the vietnam ease economy, and that would not be good for the vietnamese population. get more on that and all the days top stories at our digital destination, bloomberg business bringing together the best of bloomberg news, bloomberg television, and digital content all that one address. saudi arabia preparing for a world after fossil fuels. why a rebound in india's lone growth may not be sustainable. that is bloomberg.com/asia. check it out. the box office now. otpoiaimated feature zo spent its third straight weekend at number one. allegiance opened at
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number two, the smallest debut yet. the hackers of the
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♪ angie: it is 830 in full. japan is on holiday. you're watching "first up" this hour. china's total debt is 250% of -- calculating corporate debt. it was to funnel more savings into capital markets. chinese companies twice as long to get paid by
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their customers. to waitl customer has 80 days to collect cash from a sale. it has risen by almost a quarter over the last two years and nearly $600 billion. it plans toels says expect a takeover offer from china's insurance group unless mary it comes up with a better deal. partners will pay $78 a share. they could take the marriott stock deal which is at $81 a share. journalistsver 100 around the world, this is bloomberg news. markets in asia are just getting underway. are extending the winning streak by another week. let's get a sense of what is happening.
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earlier in this day, david is on the marketwatch. let's try and shake off the weekend, wes. street isned on wall a 1% gain. it depends what metric you are looking at. if you're looking at , they had six weeks of gains. we are at a weekly street here. we going for number five there. at the moment, we are flat right now. there is nothing left to trade on. it is very quiet data wise. you have cpi out of hong kong. you have export orders out of taiwan. japan is close. spring the first day of at the moment, that is what we have on equity markets. we will have south korea joining the fray.
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we will see if that has any sort of sway. i just want to remind you that oil is at 39.05. we have come back about a dollar or so. happening on the fx markets. it is retreating. about 76 u.s. cents. 112.74. it is very quiet, angie. it will get interesting. a few bond exchanges happening. something to watch. angie: david, thank you. $100rs who stole more than million stopped its computer systems for more than two weeks before the highest.
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it shows a sophisticated group of hackers that cover their tracks as they went. what else do we know here? usedu can say the hackers bangladesh costs own systems according to the reports. they try to make the payments look legit. malware and they also sneaked through the network reentry. to allow every step of the way they would cover the tracks and delete blogs as they went along. hackers have yet to be identified. the report says it is the sort of operation that is operated by nationstate hackers. it is a group of people that they have been tracking for some time. they are financially motivated. the money trail went from the
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feds to the philippines. , $81s eventually stolen million. another 20 12 sri lanka. it is a part of a bigger attempt to steal a billion dollars. are the consequences for the philippines? >> it all depends on how the philippines handles the case. according to one senator, the country may face backlash as a laundering haven. at risk is thee credit rating of the country. the country just raised its investment grade. that may now be in question. the cost of doing business in this country may go out. the government has to say it is taking action. it was withdrawn from an account
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at this bank. then cashed out at a philippine casino. millionll of the $81 was strong in the philippines and that remains missing. angie: wow. let's take a look at what else we are following for you on bloomberg's morning. the london exchange may have hit a snag. some investors are voicing concerns. the terms oftested the deal and question whether it could be derailed. lac shares are trading at 14% higher. one santo is expected to be exploring a bigger deal. brokers telling bloomberg said they have approached basf. deals for the talks are
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expected to be about asset purchases or joint ventures. they are all refusing to comment. china's bond market is seeing a revival. they are the most among major currencies. $4 billion in march. more than double in january and february combined. the market is slowly turning. how it is raising its markets through the year. how they will restore confidence in the currency. they will become the next sponsor. he chinese come, -- conglomerate will pull up millions of dollars into world soccer. been --as now a look at some of the
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stories making headlines. showtimee cbs owned network has been writing a rate -- wave of success. over ind nevins took january. he spoke to bloomberg's emily chang about showtimes international expansion. pushere has been a big that we have been making, that i have been making, that we have more shows that work in the u k and france compared to our competition. we have made a big push starting in canada and pushing into international territories. germany, italy. we just did australia. the showtime brand is starting to mean something. rather than selling our shows in a one-off way.
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billions is over here. ray donovan is over here. we put them all together on the same network and it makes a big difference. it is a factor of five and 10 times. about selling the streaming service? >> we have not done it yet. weekend. there is a lot of interest in premium programming. we will see what happens. >> what about china? >> go figure. billions has no potential in china. there is interest in the subject matter. that " billions" will get a real deal in china. china is becoming a very real
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market for us. when we were selling brady donovan, it is the first major sale we have made in china. >> can you win the world without china? can netflix dominate without china? i think aboutt china. it is always been a terrible market for american television. piracy is so rampant. the movie studios figured how how to do some stuff in china. now they are making real money there. i expected to be a lot of growth they're in the next five years and we spend a lot of time talking about china. angie: it is all about china. you can see emily chang's full interview with david nevins on the studio 1.0 this afternoon. that is in 1:00 p.m. in hong kong and 4:00 if you're watching
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us there is any. and deals aaution blow to the dollar. he joins us next to discuss the fallout on the currency market. you're watching "first up" ♪
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♪ it is 7:43 in hong kong. . here are the stories making headlines. about two hours before kickoff. media reports said there was a bomb threat at the stadium. officials say the match will be played at a later date. at least 13 people have been killed and more than 30 others injured in a bus crash in northeast spain. the bus was carrying university exchange students back from
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spain's largest fireworks festival. it crashed into an oncoming car on the opposite side of the highway. passing andad been alcohol and drugs test. a market shift out the first export of national gas in history. it first started exporting gas in the late 1970's. the shipment is the result of a joint venture. struggling to feed a cash strapped economy. this is bloomberg news. a look at someke important events coming up in the u.s. this week. >> the week ahead on wall street will be a shortened week due to user sunday.ay and a big question for the first
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four days of the week. can the comeback continue? we have all major indexes. it is a green for 2016. after one of the worst starts to the new year in history and an impressive comeback rally aided by the feds interest rate hikes. it will continue to be front and center. order for durable goods continues to decline. getting the be latest housing sales status. salesusly owned homes fell in february. separately we have apple likely to unveil its smaller screen iphone. that's on the schedule. the australian dollar is poised.
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he says he is sticking. stephen miller expects the currency to fall. a quick check on the aussie dollar right now. at 75 u.s. cents. he joins us now from sydney. what i am curious to hear you think. are you bearish or bullish on the aussie dollar? >> short-term, i think it should hold up pretty well. it has obviously got that support from the week u.s. dollar. commodity prices have been, the iron ore price just showed three games in a row. surge.hat incredible it is certainly tracking a lot higher. i think you should be reasonably positive on the aussie and
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thinking of $.77. further out in the year, we do think it will bounce back. we do expect a stronger u.s. dollar. nowhere near as low as the $.65. how much is that fed dovish tone in play here for currencies around the world? >> it was really quite a stunning reaction. this statement from the fed and advance, i would never have expected quite so large a response in markets. intending to hike rates again this year. twice. the markets are obviously calling on that. still ready for another hike. i think the dollar will lift up and stabilize in the months ahead. short-term, there is no obvious
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reason to expect the dollar to just come back. that: all right, how does level out in terms of central-bank policy? witheurope right now europe and boj looking at negative rates and sustaining that? >> it is pretty awkward i would have to say. japan and you pvr resigned short-term. very nasty reaction to the negative interest rate. a lot of that has come from this speculators. they have built up very loans.ive yen they are betting on the yen weakness. it is difficult for the doj to develop more qe.
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time will tell on this currencies. if you give it a few more months, we might see a reversal in the dollar-yen. we do think the u.s. dollar will stay. short-term, that is not where the money has been going. angie: for that longer-term horizon, is a going to be a trigger point? asked -- we need the markets to be expecting at the next meeting. that is not going to be at the case for the next meeting. once we get that one out of the way, is june is still looking may it'sperhaps early the economic data is positive. if inflation is maybe keeping up a little bit, then that might be enough for the markets to get serious about it.
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stronghike is a pretty prospect. they will be thinking about when the next hike is after june. that would be positive for the u.s. dollar. until that happens, the u.s. dollar is likely to come back. what is your call for the u.s. dollar by the end of this year? >> we do think in the second half of the year it will be stronger. maybe the 106 area. pushing back towards 120. a greater profile that we have been a couple of months ago. it will be pushing in that direction area. angie: the kiwis are very interesting here. it is less than what it was previously. how much is it of consumer
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confidence and gdp? it is hard to be sure on that. certainly, the tone in new zealand has called quite a bit there. it is calling somewhat. has certainly waned over the past few months. that has affected the rate cuts. we expect one more cut in june. angie: i have to ask you about pboc. they are worrying about corporate debt levels. how is that going to influence any moves this year? look, then logical step would be to allow the markets to push their currency in the direction that they would want which is
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most likely to be low. a weaker currency would be positive for the chinese economy. the public talks about having the currency roughly stabilizing in trade. i don't think that is consistent in terms of growth. inflation, they could certainly use a weaker currency so if the market wants to push in that direction, that is where they should be letting it go. that would be a good release valve. angie: it is a lot of pressure there. a lot of pressure that needs to be relieved there. we are going to leave it there. winky so much for that. thank you so much for that. coming up next, we are going to have all the details when "first up". returns.
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♪ angie: welcome back. you're watching "first up" . thanks for joining us. could we see six weeks of games here? it is starting off on a positive note. for newhave games zealand equities. we are keeping an eye on virgin australia. at the open. 10% here is how they are currently trading. 7.86% higher. for major holders including air new zealand. virgin australia says this will prepare more short-term possibility. welcome to the stock exchange. we are looking at the opening.
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japan is closed for vernal equinox day. happy vernal equinox day! we have our intrepid reporters to take an eye on the stocks. >> i am watching lg electronics. an anrriday it has function. you can see the first three at the bottom. can we get the full frame so our viewers can see? they are all changing the recommendation on the stock. all three have 50,000 flight targets. you can see on the top of the screen. 363,000. you can do the math. angie: carry the one. >> 20% lower.
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>> i am watching merchant. reports this morning said they may be up about to sell its stake in their company. there is a another story coming through. there was reports that they could be buying. high-end a merchant. yundai merchant. over the weekend we had these new pictures coming up. that he wasg looking at the launch of a missile.
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we have already had this. it has not moved over the past week.
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♪ beijinge of caution as makes growth its top priority. the pboc warning on china's debt. evidence that a sophisticated gang was behind the $100 million bangladesh rank highest. >> we premiere asia's premier art show, the world's leading galleries. stocks and asia cap their fifth
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week of gains. let's get a sense of what is happening. david is on marketwatch. a sixthe going for straight week of gains. it is early to make that call at the moment. we just capped five straight weeks on friday. , up 4/10 ofopening 1%. we seeing yields drive lower into friday. once we you an update get the updated prices out of south korea. treasury yields grinding lower and lower, 186 was the last i checked for the 10 year. australia flat, up a 10th of 1%. open yet.ets aren't
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entered a bulls market, the philippines the first to come back from a bear market. andy we might see jakarta the index and taiwan enter bull about 1.3%ain of thosehe close, putting within 20% return from the respective bottoms. data, nothing much to note here at taiwan export orders and hong kong inflation comes out later on. to quickly give you an update where we are as far as the fx market. were seeing markets will back, high-yield as well, the aussie dollar has been on a run, to say the least. we are pulling back a bit now. if you look at the dollar
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against the majors, some weakness as well. still quite, still trading sideways. i will be back to flesh out more market news. back to you. >> chinese policymakers have warned of risky levels of debt after the national people's congress gave priority to achieving 6.5% growth. this coming from the pboc governor and the vice premier. it suggests it would be a difficult balancing act for beijing. the challenges are great. makers try to stage a comeback, but also tried unwind the leverage. we had that debt binge where they unleased stimulus, and that's where the buildup has come from. ratio 250%, to gdp
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up from 160% less than eight years ago. pboc governor has identified these levels is starting to those macro risks the economy. a note from bank of america merrill lynch saying if you look at these levels, they are not too bad compared to other economies. corporate liabilities at 54% of the total debt in the economy. they are in the process of trying to restructure. , 28% ofd liabilities gdp. malaysia,a, thailand, closer to 70% to 90% of gdp. it is really corporate debt that is worrying the government.
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concerns are ase mindset thing. it's take a listen to what he had to say. i think the view on china's reform going forward, china's economic future, and also the renminbi exchange rate. if we can go back to normal, those discussions will soon be gone. we have seen argument of that dissipating. what's wearing economist is the slowdown and nominal gdp. it is making chinese corporate service that debt. chinesehighly leveraged companies going on in overseas spending binge, splashing out on these big spending plans overseas. intend tos china
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lower that leverage ratio when it comes to corporate debt? haidi: companies can rely more on equity financing, a longer-term proposition. a lot of work still needs to be done. one of the other things propose swap theyt to equity are studying at the moment. what you have is $200 billion in bad loans on balance sheets. it would mean you can convert that into equity stakes. some of these companies are doing well, and that's a lot of risk for the banks to take on. sheets mean the balance will offer a clear road to lend out more, exacerbating the cycle of debt. viceso heard from the tamir of china, talking about the importance of ramping up financial regulations.
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area that has come under scrutiny and criticism in china. >> we will strengthen all amp downons and t risk, and make sure there is no systemic risks. this is our bottom line. is heartening to see policy makers aren't ignoring this in favor of getting that 6.5% growth. this is one of the issues flagged by moody's, even going so far as to threaten to cut china's sovereign debt rate if it does not get addressed. chinese lenders also in the context of this overleveraged and the lack of a plan to deal with this. >> international confidence also key to growth. thank you for that. unpaidas a new problem, bills. payment delays have seen accounts receivable at the byion's public firm's well
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22% to $590 billion. we have the latest from the bloomberg. it seems more problems for china, $590 billion worth. this is a story on the bloomberg. it is the fourth story down this morning. sincee are seeing, not 1999 have chinese companies actually had this much trouble trying to collect payments from customers, get them to pay for what they have bought. this chart goes back to 1998. that gdp growth was at a nine year low and took them almost three months to collect cash from customers. in the mid-to early 2000's, we high,p at a 15 year
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only taking two months to collect payments. toe we have seen the longest lay since 1999, and gdp at a 25 year low, so it takes on average 83 days for a typical collection of cash for completed sales, almost twice as long as there is emerging market peers. accounts receivables blown out by more than 23% to $590 billion over the last two years, more than the annual economic output of taiwan. this graph your shows you the concerns, because this white line here is the return on, and equities for those companies in the shanghai composite. you can see that is falling, falling quite significantly lower into march 2016. this blue line is the net debt o give it up -- to this has a massive flow on affect into other parts of the economy. the chief china economist is a
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ander world bank official told bloomberg that he sees two more years of hard times coming through for chinese firms. sales and profit figures we are getting reported may not actually represent how chinese firms are faring. another headwind for china as we see account receivables blowout for a number of the nation's public firms. >> checking other headlines, starwood hotels plans to accept a takeover deal from anbang insurance group unless marriott comes with a better offer. they will pay $78 a share in cash for starwood, eclipsing marriott's deal worth $69 a share. starwood has given marriott the deadline of march 28 to renegotiate its agreement, which would create the biggest hotel operator.
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the takeover of sharp is that risk of collapsing. according to reports, foxconn seeking to pay 20% less than the $4.4 billion initially agreed due to concerns about liabilities and future earnings. it has been 25 days since sharp's board voted in favor of the takeover. they are working towards a final agreement. raised money after pricing a hong kong ipo, making the cities biggest offering so far this year. the bank has said to price offerings at the bottom of the marketed range. the bank is scheduled to start trading on march 30. still to come, the push to reinvent itself as a creative
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hub. one of the city's new partners. coming up next, the strategic problems with the brexit, chatham house talks about the global impact of a possible british departure from the european union, after the short break. ♪
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8:14 a.m. in hong kong. barack obama has arrived in havana. president obama and his family are on a three-day trip along with corporate executives and prominent cuban-americans. andas restored relations remove restrictions, but only congress can lift a trade embargo in place since 1962. russian investigators say the
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flight recorders recovered after saturday's crash of a passenger jet are severely damage. board the seven to seven were killed when it crashed and burst into flames while making a second landing attempt in russia's south. the airline ceo says conditions were appropriate, the weather bad, and at least three other flights diverted elsewhere. miner vale has confirmed the death of a former ceo. he and his family died, along with three other people, when their turboprop came down minutes after takeoff. to agnsident pay tribute elli. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. chinese policymakers have
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warmed of risky levels of death -- warned of risky levels of debt, aiming for 6.5% growth. we have director at think tank chatham house in london in hong chatham the bloomberg house seminar on china and the global economy. what is china going to do? how will it affect the global economy? >> we thought of china that was helping to keep europe afloat. through itswent crisis moment, germany was the bankroll her, and germany was seen as a strong economy. china slows down, germany looks weaker. germany looks weaker, the eurozone looks weaker. that interconnection is one we are concerned about in europe. there are up sides, chinese investment in europe growing, 5 billion last year, $20 billion last year, could double that this year. some good stories, chinese money
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is coming in, but we rely on exporting to china. that slows down, that will be a worry. angie: another worry is brexit. if there is a brexit, one of the richest men will scale back investments in europe. that has to be a massive headwind wind europe is slowing down. >> i heard a senior u.s. official say the british decision was very self-indulgent. you couldn't think of worse timing for a shock of that sort. it has a systemic element to it. at the form i just came from, it was the first topic mentioned as one of the systemic unexpected for the next few months, so deftly an impact on the u.k. eu confidence, critical for european growth, affect the main gateway that china is using or foreign
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investment in the eu, which is the u.k.. it would prove that populism is on the rise around the world. angie: there really is a growing collaboration in terms of how as it tries to trade on the global stage, that door shuts, doesn't it? >> it is interesting. london acting as a global hub for finance could survive. where it would lose the capacity ford the being a of european financing at a moment when they're trying to move away from banking debt and rely more on equity. todon being a passport europe would be more difficult, but the combination of talent, expertise, means it could still act as a gateway to global markets. i would not want to overplay how it would affect the city, but the overall effect on the economy would be bad. for hong kong, i think probably
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not. it might give an uptick. if london weakens as a financial center, where else? there is nowhere else in europe that could step up and take that position, so then you look at a multipolar financial centers. places like hong kong would do better. angie: in your remarks, what are the key highlights that you flag for chinese concerns? worry is the timing of the china slowdown, which was to be expected, moving to a different normal, as chinese leaders remind us. the timing is coinciding with a much more populist set of politics in the nine it states -- a much more politics populist politics in europe. china has become an enemy in terms of trading relationships in donald trump's point of view. angie: certainly an election
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issue. >> even hillary clinton said she is against the transpacific partnership. china is looking for a totally new model. seehat for size moment you a change in attitudes to have the "economy, that china has relied on, starts to close. china still relies on an open global economy to get itself moving forward. if you see europe close down because of angela merkel, ion crises, where does china go? china has been predominantly protectionist itself when it comes to foreign policy. is that going to change? >> the big worry i have is that we have not had a time where global economic growth has been threatened as much by geopolitics. wheree a time right now the sea level of globalization has been rising, and that has hidden some of the tectonic
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shifts under the surface. global sea rise stars to decline because global growth is not as good, you see those jagged edges, and leaders rely on external issues to confirm their confidence at home. tensions over south china sea suddenly look different in the context of low growth. even saudi-iran relations look different. it is the 1930's a little bit, in the sense that confidence in globalization is starting to decline with tensions between the rising powers get stronger, and people tap into that stuff. any leader, u.s. leader or chinese leader might start to use foreign policy as a way of discussing slowdowns domestically, and that's what worries me. angie: that's very much a play in the u.s. political scene right now. is a is a sense that there huge swath of the population that has not participated in the asset bubble we have seen. is in a the u.s. strange position.
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part of the u.s. economy has done well, if you look at anna plummeting growth numbers, you think this is good him about salary levels have been stuck since 1995 at the mid-level. that sense of non-complete participation, people start to look for scapegoats. i don't think we've worked out in the west how to grow without credit. credit is not as available as it you can't find a new model, then you look for external scapegoats. at the moment, china does stand out as one of the escape goats. angie: looking for do hearing your speech. coming up, making sense of the dollar rally. is it really over. we will take a look at that after the short break. ♪
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>> welcome back. it is monday, march 21, and these are your fx headlines.
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were looking at a fairly mixed picture across currency markets. the dollar stronger against emerging market and high-yielding currencies, week against other majors. dollar index on your screen, 95 is the level. euro back above 112. 111.50.n above ,ound sterling range bound 144.60. yields are lower. some of these latest views on the dollar. millennium global things that the dollar rally will continue, thathe head turned dovish policy will divert from the boj and ecb. , in terms of rate
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differentials the bank says, dollar value is done and over. ofger picture is in the core boj and ecb. were talking about greece again. bailout talks ended on sunday without a deal between the country and its creditors. this latest round of talks did produce progress in some areas, though greece still needs to secure agreement across other terms of the bailout package. they'll out monitors returned to athens on april 2 with a hope to finally wrap up negotiations. those are the stories driving your fx markets this monday morning. australian dollar poised for its best month since october 2011, but that's not swearing the biggest fund manager. blackrock ceo is sticking with
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the bearish call he has maintain for three years. he expects the currency to fall 15%, below the seven-year lows that it hit back in january. a quick check of the aussie dollar, $.75, weaker today. later on, were speaking to the australian trade minister, live from sydney at 10:30 p.m. hong kong time. a check on markets trading in the asia-pacific. it is early in the trading day, kospi is climbing higher. closed for vernal equinox day. hacked,p, hunted and the latest on the investigation into the bangladesh bank heist when "first up" returns.
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>> 8:30 a.m. in singapore, half an hour from trading opening there. you are watching "first up". chinese policymakers have raised concerns about the nation's debt levels. lending as a share of gdp is too high. china's total debt is 250% of gdp, corporate debt is 160% of output. one option suggested was to funnel more savings into capital markets. sharp at takeover of risk of collapsing as a delay in finalizing the deal drags on according to reports.
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foxconn seeking to pay 20% less for stocks than the $4.4 billion initially agreed to over liabilities and future earnings. since been 25 days sharp's board voted in favor of the bailout proposal from foxconn. man who turnede the company into a mining superpower. died with his wife, son, and dr., and three other people when their turboprop came down minutes after takeoff in some follow. -- in san paolo. ownedned the former state minor into the world's biggest producer. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. starwood says it plans to accept a sweetened takeover from insurance,ang ditching a previous officer --
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offer from mary international. marriott has to do a little bit of thinking. gettingsortium is together and upping their bid to $78 a share, up two dollars from the bid it made initially, and that makes the deal worth 13 $.2 billion. -- $13.2 billion. marriott has a deadline of march 28 to come back with a counter offer. marriott did say it's carefully considering alternatives. they had agreed to a deal with starwood, worth about $69.31 a share. that was a cash and stock offer. marriott says they are
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reconsidering and may come back with a counter offer, but it would have created the largest hotel company in the world. if starwood decides to go ahead with the anbang, it would have to pay a breakup fee of $400 million. all this news did left hotel stocks on friday, closing higher, and the bloomberg index of hotel real estate investment trusts rose 1.2%. angie: this could shake up the industry. whoever gets the deal, they also get cuba. >> yes, starwood has signed some agreements in cuba. it has authorization from the u.s. treasury department to operate hotels & with two hotels to manage them. these hotels will be renovated before reopening later this year. it also signed a letter of intent with another hotel, a historic hotel in cuba, and that
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will also be added to its luxury collection as well. the first u.s. hotel company to sign a deal in cuba just as president obama makes his trip there. angie: thank you for that. investigators are looking into the bangladesh rank iced -- bank heist, and have revealed details. to thekers gained access main system two weeks before the actually struck. let's go live to our southeast asia correspondent. it sounds like a very well organized scheme here. ,> well organized sophisticated, bold, intriguing. interim investigations suggest a group of hackers who covered their tracks every step of the way. all of the logs were deleted here it -- deleted. they stayed in the systems for about two weeks, installing software that allows reentry, and to make the payments look
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legitimate, they deployed malwa re. investigators say it is the type of operation mounted by nationstates. the money trail went from the fed to the philippines and sri lanka, $100 million stolen, $81 million sent to the philippines, another $20 million into sri lanka, all part of a eager attempt to steal $1 billion. we understand the fbi may be assisting in the probe. cyber experts will try to trace the links. it is a wake-up call. all will have to scrutinize the system more closely. >> cyber security, this is a 21st-century problem here. how far-reaching are the consequences for the philippines? is it at risk of being blacklisted. it could threaten the wider financial sector and all of the philippines, and according to one senator the company may face
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moneyblacklisted as a laundering haven. money laundering has been a huge trouble there for a long time. the credit rating was raised to investment grade not long ago in 2013. that may be short-lived if the government isn't able to allay concerns that it is taking action. it has to find out how money stolen from bangladesh was withdrawn from accounts set up at banks in the philippines, then cashed out at casinos through a local money changer. 81 millionof the dollars withdrawn remains missing. there is speculation the money may have been trunk fed out of the country, and there is a money trail. angie: thanks for tracking that for us. let's take a look at what else we are following for you. haidi: thanks. urges of theses london stock exchange may have hit a snag with some shareholders raising concerns.
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several major investors have balked at the terms of the deal and question whether it could be derailed by antitrust concerns. arest also by expectations of high offer from intercontinental exchange. shares are trading at a 14% premium compared to the offer. monsanto it's going a possible ayer.with basf and b it has approached bsf about purchasing its crop business. monsanto and the others refusing to comment. china's -- china's dim sum bond market seeing a revival. sales of offshore debt surged to $4 billion, more than double january and fabric combined. sentiment in the market is slowly turning, helped by the yuan erasing losses and the pboj
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campaign to restore confidence in the currency. new -- therst major first major new fifa sponsor, the first to do so since sepp blatter was ousted. has been investing since china made it a top national priority. those of the headlines around the region. angie: christine lagarde says vietnam will be vulnerable to external shocks if it does not push the reforms to its banking system and restructure state owned enterprises. the imf managing director currently touring asia right now. bureau our own annoyed chief speaking exclusively with christine lagarde, asking about the effectiveness of negative interest rates. >> if we had not had those negative rates, we would be in a
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much worse place today. startsee whether it kick the process of fueling credit to the economy, changing the changingof people, and the strategy of banks as well. it might be good for the economy, maybe not forever, but for a time. china recently had its national people's congress, there was some concern that maybe the chinese government is too focused on stimulus and short-term growth at the expense of reforms, what is your take on that? >> we believe that china will continue to grow, number one, and our assessment at the moment is 6.3%. we have to assess the decisions that have just been made by the chinese authorities, to factor in those decisions and see whether we forecast a little bit more growth possibly. >> you recently urged asian
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nations to take the lead in adopting more friendly policies to counter global economic challenges. which country specifically need to work on this? what specifically would you like to see? >> i think the whole region needs infrastructure. the financing of infrastructure, whether it is public or a mix of public and private, is actually going to other -- have a short-term impact on growth as well as the medium-term impact on improving the productivity factors. to see that across the region would actually be extremely helpful, and that has been recognized by many investors now. during this visit to vietnam, you said the country risks falling behind regional competitors if it does not push through big reforms. how real are those risks? what is the worst-case scenario look like? >> the risk is from being slightly vulnerable, vietnam could become very vulnerable to
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external shocks. significanta very tightening of the financing that is available, because of monetary policy decisions made elsewhere in the world, if you have a strong transition of the chinese growth model, if you have commodity prices that would eventually fall lower and for longer, then it would expose the vietnamese economy, and that would not be good for the the enemy's population. angie: coming up next, kicking -- our coverage of hong kong you are watching "first up". stay with us. ♪
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>> it is 8:43 a.m. in hong kong. these of the stories making headlines. citing anthorities
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unspecified threat to a football game due to a bomb threat at the stadium. the match will be played at a later date. the man thanked two islamic state killed four people in a suicide bombing. 14 people and 30 injured in a bus crash in northeast spain. the bus was carrying university exchange students from spain's largest fireworks festival. carrashed into an oncoming on the opposite side of the highway. officials say the bus was the cause of the crash, but the driver has passed alcohol and drug tests. the firsthipped out gas exports in history, a long time coming, plan to start exporting gas in the late 1970's, delayed i the iran-iraq war. the shipments of the result of a joint venture with world that shell and mitsubishi.
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aaq is struggling to feed cash strapped economy as it wages and extensive fight against islamic state. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. famous for its widely , seeking knock options to reinvent itself as a crate of hub for china, opening a new design galley and partnership with the britons victoria museum. tim reeve is in town for art basel. tell us about this partnership here that you're doing with china. tim: we have a long relationship with china going back 150 years, but this particular partnership is for a new design museum created. the collaborator, partner, will be developing a new gallery of
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20th and 21st century design. sending temporary exhibitions over, and there to advise our partners in setting up a new museum. angie: how do you expect that to influence the design in china? to find out asn much as possible as we develop this relationship and the gallery about what is a burgeoning design community in shenzhen. we have spent time getting to know those communities, people, listening to ideas and suggestions from the design community in shenzhen, so what we leave behind these a legacy. angie: and impression and influence, which is important for artists. we know that it is easy to get over to shenzhen and find copycat works at the moment. there is no doubt the talent is there, but the courage to be original. it is not. i think this is changing
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rapidly and that part of china, and we see evidence of that. the creativity and talent is there, and one of the things we are key to do -- keen to do with the gallery and design museum is to start the debate and provide a platform for the vies to underpin good design. angie: like what? we have seven themes, costs, materials, or my favorites, problem-solving, designed to solve life's problems, the world's problems. these are very powerful themes. we want to use the gallery to provoke a conversation and a debate about what underpins good design and original design. we are finding that is resonating with this community , and a conversation is lively and will be lively in the years to calm. evolution,erms of there will be that with cultural
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influences, political as well, how do you see the current economic environment in china with the slow down and the transitioning of the economy. muchu say, design is very about style as it is substance. tim: i am no economist. it seems to me that china is playing heavily on the creative strong, something we are on and the u.k., evidence that china is prioritizing that over the years to come. it is all about quality and good design. the talent will always rise to the top grade it seems to me that will be good for china's economy in due course. does it have its eye on design? specifically in china come any more thoughts there? we have long-standing relationships with museums in
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beijing, shanghai, and hong kong, so were always looking for new relationships. a new exhibition opening in hong kong today with a collection of silver. we are always looking for the next thing to do. art basel, you will try to sneak your way in and get some views there. where do you think in this current economic environment, again you are no economist, but you do have a pulse on the art world and how buyers and sellers are feeling. tim: my perspective on it is immune from the absent flows of the global economy, certainly through the recession years in the west, no signs of slowing down, so it seems to me it is as good as it has ever been. angie: you see it as an insulated sector?
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great art is always finite? maybe it is escapism, people escaping from the realities of the world. angie: we sure need those. thank you for talking to us today in hong kong. up, details on the stock exchange after the break. ♪
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angie: welcome back.
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you are watching "first up". showtime has been riding the wave of success with hit shows. the ceo took over in january and has big plans for growth, especially in china. he spoke with emily chang. >> there has been a big push that we have been making, i think we have more shows that work in u.k. and france compared to some of our competition. canada,a big push in u.k., germany, italy. we just did australia, more to common continental europe. -- more to come in continental your. rather than selling our shows in , put-off way, here, there
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them all together, the same networks, it makes a big difference. five and 10or of times we are making in these countries. what about plans to sell the streaming service? >> we have not done it yet. we can. there is such interest in premium programming right now that we made the decision in the , but weitories to sell will see what happens when the deals are done. emily: what about china? >> i think "billions" has real potential in china. i'm hopeful that "billions" gets a real deal in china that is potentially our biggest deal ever. china is becoming a very real market for us, as recently as
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when we were selling "ray donovan", selling it for pennies, now there is real is thet and "billions" first major sale in china. it is significant. emily: ken netflix dominate without china? >> china has already been -- always been a terrible market for american television, piracy is so rampant. the movie studios figured out how to do some stuff in china , now they'res ago making real money, and i expect there to be a lot of growth in the next five years. i think we spent a lot of time talking about china now. angie: you can see emily chang's full interview with david nevins this afternoon at 1:00 p.m. in hong kong, 4:00 p.m. in sydney.
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welcome to the stock exchange. trading underway in asia. i'm just checking the time. i want time to take a little quicker. atelectronics cut to reduce hsbc. >> want to eat some crow? juliet will serve it to you. 1.3%, re-transport services, could be selling its stake to singapore. another report dismissed by hyundai motor group that it is interested in buying hyundai merchant. that stockts pushing higher this morning. -- your turn.ly
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>> i'll have the consolation prize. >> i'm really surprised. usually you see huge moves, south korean defense stocks, electronic warfare products, those photos released from north korea that showed kim jong-il observing jong-un military drills, the latest step in this ramping up of the saber rattling we've had from the north over the past couple of weeks. directionally at least, that's what's going on. today.ustralian win are you ok, david? >> yeah. >> that's the verdict from our stock exchange. that's it for us on "first up"
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today. thank you for joining as. "trending business" coming up next. rishaad: the first trading day of the week, and were having a look at australia. a new trade minister joining us in about an hour and a half. he will be discussing what happens to trade deals, changing direction, what happens with this forthcoming general election. -- talking about artificial intelligence and how it can improve trading abilities, including high-frequency trading. use ourificial intelligence or their own. twitter is 10 years old. all that and more coming up in the next two hours of "trending business". ♪
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♪ rishaad: it is monday, the 21st of march. this is "trending business". i am rishaad salamat. ♪ rishaad: heading to sydney and singapore, a look at what were watching. china's political leaders make growth their top priority. the central bank chief says that levels are too high, corporate debt 160% of gdp. barack obama becomes the first u.s. president to visit a

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