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tv   Trending Business  Bloomberg  March 29, 2016 9:00pm-10:01pm EDT

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♪ theaad: it is wednesday 30th of march. i am rishaad salamat. this is "trending business". ♪ rishaad: here is what we are watching, hitting the brakes in japan, falling exports. shinzo abe will frontload spending to boost growth. two chinese banks joining the hang seng. we are headed to the exchange.
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the winners and losers and apples privacy fight. do let us know what you think of our top stories. , include at @rishaadtv #trendingbusiness. we have singapore, taiwan, and malaysia entering the asian trading day. haidi: southeast asia markets entering the fray. get aot often we situation when janet yellen speaks in the markets react positively. high,p hitting its 2016 caring through to the asian session, the exception japan. down for a second day, down 6/10 of 1%.
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some disappointment we did not get more in the way of stimulus from shinzo abe yesterday. we also have that stronger yen at play. havoc when it comes to japanese exporters when it comes to projected earnings. elsewhere, and asian rally. stocks off earlier highs, strong gains out of southeast asia. malaysia up by 4/10 of 1%. let's take a look at some of the movers, some declines in metal prices overnight. 5%,ution mining up by northern star up as well. zealand, the stock was up earlier this morning, halted as
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of 20 minutes ago pending an announcement that says they are mulling what to do with their stay conversion australia, considering a partial or complete sale. is a story still developing. we will watch that if and when it resumes trading. these are the biggest louvers and terms of that tokyo session. losers in terms of that tokyo session. automakers seeing the greatest declines. space, the the fx weaker dollar having an impact on a number of asian currencies, the yen now trading at that 112
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.59 handle. were also sing strength from the aussie dollar as well -- seeing strength from the aussie dollar as well. rishaad: the hong kong stock exchange, to banks making their -- two banks making their debut. this is the first attempt at a major listing so far this year, i believe. absolutely. good morning. we are coming to you from the hong kong stock exchange. it is debut day, two commercial ,enders making their debut trying to capitalize on investors appetite for ipos. it has been the slowest start to ipos since 2011, so five years.
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the chinese bank is a commercial vendor, the biggest ipo that hong kong will face so far this year. $3.92 to $4.12, according to its perspectives. costshares were sold at a $3.96, meaning the bank has raised $1.7 billion. zhesang bank has raised $449 $449 million. both of these coming in at the lower end. that chinese lenders
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listed late last year in 2015 also at the lower end of their ipos. art now trading well above their ipo price. ve the live listings at 9:30 a.m. and hong kong. whether or not they debuted strongly will remain to be seen. it is worth noting that the ipos last year are trading above the value from when they listed. rishaad: more detailed look at that and the open as well. tweet us your thoughts at @rishaadtv, include #trendingbusiness. it's meant to be a dismal earnings season when it comes to chinese lenders. the season has already started
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off with a surprise. >> that surprise coming from the bank of communications, as a price increase in profits for the fourth quarter. the expectations were for a drop in profits. to $2.2 billion, according to numbers derived from the filing. the higher income came from loans and fees. the badaged to outweigh loan charges. they had set aside more than $1 billion as a provision. this signals a drag on future profits and the need to set aside additional reserves. foxconn group edging towards the final stages of its sharp
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takeover. the boards me today separately. on hon hai announced trading is suspended ending a major announcement. it is reported a deal will be signed on april 2. shares of sharp are trading higher in tokyo. who will be the next chief executive of seven & i? bloomberg sources say that is under discussion as the company's nomination and compensation committee meet. a personnel shuffle may involve the current president and the deputy head. warned the company against creating a family dynasty.
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suzuki plans to make his son resident of the company. rishaad: beating earnings estimates, offsetting the plunge in energy prices. how did sinopec managed to outperform? asia's biggest refiner. it has the advantage it will profit. as input costs fall, margins of rise. it helped to cushion that drop. touch her numbers were some
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of the lowest petro china numbers were some of the lowest. downstream that helps you, but how are these other companies weathering this collapse? >> like their peers, they are chopping costs. rishaad: jobs? >> not yet with the oil companies. the government says it does see cuts coming in: and steel. in coal and steel. petro china said they will offer earlier retirement and redeploy workers. put away thecally idea of firing workers. rishaad: what then is the general feeling and outlook for
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these companies? >> they get the sense that the worst is over. they see prices stabilizing and going up from here. $40o china sees prices at to $50 a barrel for the rest of the year, $80 a barrel by the in the decade. end of the decade. sentiment isre that the golden days are over. they are chopping costs and slimming down operations to live with $50 oil. , a look coming up later at the winners and losers from apple's encryption battle with the fbi. japan is aity says better bet than the united states. ♪
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rishaad: you are back with "trending business". consumer is said to be the key driver of growth this year. that is according to fidelity's global survey. great to see you. rely on the american consumer to drive global growth. we used to be surprised by the strength of the american consumer. past, is the days of yo there ever a return? the globalvey shows economy is all about the consumer, whether the u.s., china, asia. it is the consumer which is driving good company performance. rishaad: we have not seen that
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in the states like we did before. what will be the trigger to get them to spend more? >> they are spending, slowly, coming back. global growth is lower than it used to be and we will have to get used to that, but the consumer is still the driver and spending is coming through. the latest numbers from the u.s. are positive on consumer sentiment. the u.s. consumer is still there. rishaad: we're just not seeing the exponential growth. >> correct. we need to accept the world is a slower growth place than it was before the global financial crisis. rishaad: china trying to re-oriented it's a economy towards the consumer, that will take time. the numbers are stunning in terms of growth. this rebalancing from fixed asset investment to consumption in china is also taking place. it is taking place slower than most people would like,
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including the government, but it is happening and we are seeing the transition. that is positive. in china, it is all about the consumer and the new economy sectors. the sectors where companies are reporting good financial conditions, good business conditions, and it is the old economy where companies are reporting tough business conditions. rishaad: which is why we should be looking on the service side rather than concentrating on the manufacturing. >> i totally agree. it is easy to make the bear case on china. manufacturing pmi's are one of the things that people focus on, but nonmanufacturing pmi's have been in positive territory for a long time and that part of the economy is growing strongly. people often rely on old economic indicators, because that is what china used to be about. but china is now about value added manufacturing, and it is
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about consumption, the internet, service sectors, education, health care, insurance, etc. there is one country where the consumer has been so poor in terms of spending, years of deflation, shrieking population, aging population, and of course i'm referring to japan. >> it's interesting because it came top in our survey -- he got the best score in terms of conditions because abenomics is having real traction in corporate governance. companies are getting better, paying attention to returns on capital, paying attention to paying money back to shareholders in the form of dividends, paying attention to board structures. rishaad: what about the consumer? >> in japan, we don't need to rely on the consumer in the same way because we are seeing company performance getting better.
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we haven't been as rely on the consumer. the thing that has been a big driver in japan is the chinese consumer. the chinese have been buying all kinds of products in japan. rishaad: we didn't get to talk to about that sales tax hike next year, but another time. >> it is 9:18 a.m. in singapore. the stories making headlines around the world. a new draft constitution, sparking criticism that it is undemocratic and invest too much in the army. the military government tried to ban comments ahead of the release. the document will be put to a referendum in august, a senate , seniord by the junta
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army officers and the national police chief. human rights groups and politicians on all sides have rejected the draft. is sticking says he with his campaign manager despite him being accused of battery at a rally. florida police released pictures they say show an altercation between a reporter and his campaign manager. the trunk campaign says he doesn't "discard people." it also said look at the tape, nothing there and said that his campaign manager is innocent. police say the hijacking of a passenger plane was not linked to terrorism. the egypt air jet was diverted to cyprus during a flight from alexandra to cairo. the hijacker gave himself up and no one was hurt. he was wearing a fake suicide belt and managed to pass through several security checks. officials and cyprus a he is
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suffering from psychological problems. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. rishaad: coming up, a signal to sell. why some say japanese stocks are overheated. do stay with us. ♪
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rishaad: you are watching "trending business". version australia suspended
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pending a statement about a sale. let's find out more. here's paul allen. it looks as if air new zealand wants out of version australia, holding over 25% stake. it says it may sell all or part of that. asked credit suisse on how to proceed. the ceo has resigned from the version board. it was only two weeks ago that virginal stray you got an unsecured loan of 425 million australian dollars from all its major shareholders, including air new zealand. it will be interesting to see how that plays out. the market responding warmly to the news, air new zealand shares up 3%, virginal australia remaining in a trading halt. we will learn more on april 1. rishaad: thank you for that.
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ministerese prime can't seem to get a break, on top of disappointing news from the economy, the one part that abenomics ised by about to turn sour. topix has not had a great year. indicator hascal now surged past the 120 level that some traders say indicates that shares or poised to fall. to 130ay, it edged close , currently 124, still above the overbought level. it does not bode well for prime ministers shinzo abe. helpedicies may not have
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spur economic growth, but at least he could say that stocks were doing well. this could now be about to change. we have seen economic indicators in japan have been a mix at best. we can see today, this morning, we saw japan industrial output falling again, plunging 6.2% on a month. now industrial production year , ayear is also falling 1.5% third consecutive month of declines. plunging intolso the red again. despite the challenging shinzo abe held off on announcing a new set of still is measures for japan. yesterday, parliament passed a $850 billion budget for
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fiscal year 2016 and shinzo are based best way for the economy to move forward -- shinzo abe said the best way to move forward would be to implement that as quickly as possible. he has sent instructions to the finance minister. shinzo abe, despite all these challenging economic indicators, plans to go ahead with that sale , a tax hike plan for next year hike from 8% tax to 10%. remember the last time they hiked taxes, the economy plunged. in the final three months of 2015, gdp contracting, so that will be a new challenge for shinzo abe's administration. rishaad: thanks. debuting, two banks investor reaction to these two chinese banks on the hang seng.
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tianjin bank raising $949 million in the ipo. the broader markets in hong kong and shanghai right after this. ♪
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the flower power cruise, february 27th, 2017. let your freak flag fly. don't miss the grooviest trip at sea. right, images out of the hong kong exchange, two mainland chinese banks debuting on the hang seng, the first two major companies to ipo this year, china zheshang bank and bank of tianjin trading today. selling 3.3ng bank billion shares, the biggest so far in hong kong this year. bank of tianjin raising just under $950 million. we are waiting for that gong to announce the trading start. selling justin
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under one billion shares. were looking at the lower open for the hang seng. this is what we have, five seconds to go. let's listen in. [gong sounds] rishaad: that was the gong. take my word for it. releasing the latest outlook for the global economy, headline prediction is china's slowdown shows no signs of abating. 6.5% this year. adb says china's efforts to rein , a merging labor
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shortages, all will have a negative impact on growth. different story for india b, 7.4% this ad year, 7.8% the following. listing.e two banks shanghai entering the fray. it is a nerve-racking time for any asian lender, in particular chinese banks, to be entering the fray in terms of the operating environment and trading environment. wereke a look at how looking in terms of those first few minutes for these two stocks. openingeshang bank lower after selling 3.3 in shares, $1.7 billion raise. also comingjin online, selling just under one
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billion shares to raise $450 million. we will try to get you those numbers as they become available. making theirks debut, and one of them, the biggest listing so far for the hong kong stock exchange this year. today, we are seeing upside for the broader markets. janet yellen speaks, and for once a positive reaction. u.s. stocks posting their 2016 highs, tracking through most asian markets, minus japan, where we are seeing a downside reaction to the industrial production numbers as well as that stronger yen as the weak dollar story continues to play out and cause some problems for these asian exporting countries. stick around. shanghai up by 1%, strong start. hong kong up to close to 1%. taiwan also up a tense of 1%. inney off its session highs
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the still a strong gain coming through from the resources, miners, energy, oil related stocks. singapore stocks, strong buying as well. it is banks, both new and existing, in focus in the hong kong and shanghai sessions. it is the start of earnings week for china's big five lenders. a pretty positive note to kickoff. it looks like investors are brushing off the bad news part of the earnings report, bad loans surged 31%, bad loan coverage declined, 156%. we had the news reporting that regulations are allowing a certain number of chinese lenders to get their bad loans
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ratios down.race years dow lot of upsidea for the financials. rishaad: thanks. let's take you back to the hong kong exchange. those two banks heading in opposite direction. we are on the trading floor. as you said, it is a good day today view. a bit of aang bank switch out. both came online china zheshang bank at their offer price. it was sold at $3.96.
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a very important milestone for these two ipos to come online today. quite a slow appetite for ipos, the slow start to a year in five years. both china zheshang bank and bank of tianjin attempting to capitalize on investors for new listings. china zheshang bank shares on offer between $3.92 to $4.12, selling shares at three dollars 90 six cents, raising $1.7 billion. $3.96, raising $1.7 billion. raisingtianjin ended up $949 million, shares priced at $7.39, what they opened in the premarket. companies listing at
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the lower end of their ipos. the three chinese lenders who listed last year in late 2015 when we started to see that ipo ban lifted, they've done quite well despite a rocky start. more than nowng what their ipo listing was, one stock up 27% since december. investors who have bought into these two banks today will be hoping that their ipos do the same and continue to rise in the coming days, weeks, and months. rishaad: thanks. let's discuss the prospects for those banks and the prospects overall for ipos. when you make of the timing? is that a horrible start to the year?
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it's not just hong kong. the global ipo market is not doing well. about the worried interest rates, the u.s. interest rate, the drop of oil price, the devaluation of the , so this market is not good for the hong kong ipo market. rishaad: why now? >> it is only march. you do see signs of the oil price rebound, the renminbi stabilizing, and the u.s. saying they will only increase the interest rate two times this year. all this is improving market sentiment. rishaad: what does it tell us about the market in hong kong?
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these are the first to bring major ipos this year. you can understand why. market, the peak season is always in the fourth quarter. the first quarter were not good. we will see some better market sentiments. because of the chinese government, they have stabilize the market -- stabilize the the market. reduce -- soely all this will have to -- rishaad: that may well happen. thing, loosening monetary policy to get the economic wheels turning still, but what about a u.s. interest
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rate hike on the other hand? how does that play into this? >> we believe that the increase of interest rates will not be quick, very slow. particular, maybe just one time. we believe that it will only increase one or two times. forelieve that will be good hong kong and asian markets. rishaad: getting back to today's two debuts, does it mean that other banks were also need to broaden their capital base as they deal with the debt levels? >> absolutely. are alreadyready broadening the capital. more than half the fundraising in hong kong comes from
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financial institutions, so we believe this trend will continue. the financial industries will dominate the ipo market. rishaad: let's get back to the overall hong kong market. people haven't described this link as being an unqualified success with shanghai. it is very much a qualified one. in what way does it need to change to improve the market here in hong kong? all, how to use the hope that in the future the connection will be able to expand to the ipo market, so people can and
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mainland china or hong kong by for the ipo. rishaad: there are a lot of reforms that need to be undertaken. does hong kong retained its position as the number one place this year? , then hongssumption kong will maintain its position, top position. rishaad: great to have you on the program. news, thecap breaking pment banklop and prediction that china's slowdown shows no signs of abating, but growth slows to 6.5% this year, the minimum set out by the government. growth will slow down even further the following year, 6.3%. china's efforts to
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rein in debt, supply-sider reforms come emerging labor shortages come all contrived together to produce a negative impact when it comes to growth. different story for india, adb sang growth there will be 7.4% ins year, improving to 7.8% 2017. right, you're watching "trending business". right back after this. ♪
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china is tightening its grip on the internet, drafting new laws they could ban the two most popular web domains. tom mackenzie is here in the studio having a look. what is the proposition? >> new proposals on the table from the chinese government, inectively another weapon
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the arsenal of sensors. namewould make domain users registered with the government. they would have to register with the government ministry before they could provide content, if it is domestically provided content. proposals at the moment -- down to thegoes local authority level to make that final decision, doesn't it? >> under the auspices of the central government in beijing, and this is part of a tightening of the media environment in beijing. we've seen that with president xi jinping visiting state run media and telling them to toe the party line. rishaad: what is the read through for internet users, less choice, i suppose? becauseironic, e-commerce is absolutely buzzing in china. millions of people using their
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cell phones, smart phones, the largest internet population on the planet, but these restrictions will further enhance what we know as the so-called great firewall that already blocks content from servers and domains linked to the outside, now another tool. the government will have a white list acceptable to them. so we are already seeing content blocked, and this as another tool to their arsenal. rishaad: more government control. >> absolutely. rishaad: right. the stories making headlines around the world. at a chinesenalist newspaper has quit, blaming official control over the media. tabloid daily, but said he could no longer toe the common's party line. he referred to president xi
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visits,s recent telling them to show absolute fidelity with a party. north korea is moving closer to developing a nuclear armed missile, calling on china to take a lead role in preventing -- implement sanctions. the north fired another short ranged projectile on tuesday in what appeared to be a weapons test. pyongyang has launched a series of missiles and threaten nuclear attacks as south korea and the united states stage their biggest ever joint military drill. r operator tou put $81chinese men million into an account he helped to open in the philippines, the same amount stolen. he told senators and a hearing
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that he is willing to return $14 million the men paid to his company. he said he was merely an interpreter when one of them opened the account in the philippines. i had nothing to do with the actual opening of accounts. i had nothing to do with the falsification of bank documents of the money could get in, and i don't know where the $81 million came from. >> powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. india's biggest chicken suppliers are coming under scrutiny for the use of antibiotics. are raising concerns that their uncontrolled use on farms is turning animals into reservoirs of hard to kill bacteria. a reporter for south asia joins us from new delhi now. your investigation found antibodies are used routinely on indian chicken farms. this is deeply alarming, is it not? >> it is.
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it's alarming on so many levels. one thing you have to keep in is that more of these antibiotics are used in agriculture than they are in humans. often times we are talking about the same drugs that you and i rely on to treat diarrhea, pneumonia, urinary tract infections, so why is is alarming? on one level, the kind of drugs being used, like something you might put on -- in your travel bag when you come to india. the second reason is because of the way the drugs are used, creating ideal conditions to spawn a superbug, low levels, repeatedly, used when they are not necessary to prevent disease before it happens. increase means is you the risk of the superbugs developing on these farms around these animals, then the same superbugs getting into the environment, and what we have seen in the past was superbugs
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is that they are incredibly mobile. within hours, they can get out of india via a traveler traveling to canada, america, our europe, and be in another country. we have seen a lot in the west with consumer pushback against antibiotics. that is also a concern, but it is actually not the bigger concern. the bigger concern is what is happening on these farms, the superbugs developing, getting off the farms, whether it is through the chicken you by that arrives at the market or whether it is transmitted by the farmhand, or maybe washed out when they're cleaning out the chicken coops and it getting into the vegetable patch next door. what sort of companies are we talking about involved? >> it is a global supply chain. many of the company names you and i would recognize. the pharmaceutical companies applying these drugs are major companies like bayer.
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these drugs are supposed to be sold under prescription. often times in india, they are not. they are used on these farms that sell the chickens to india's biggest chicken companies, a supermarket we are are all buying in this year for the import the chickens to the middle east, japan, and in turn also supplying major customers like kfc and mcdonald's. , twoad: the thing is questions in one, who is most at risk and what is india doing to stop this and control the use of antibiotics and livestock? >> who is most at risk? the point where trying to get across in our story is everybody is at risk. this is not an india problem. ,e it is happening in india
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hygiene issues, lack of controls, it is a bigger issue here than other countries. on ance you get a superbug farm in india, it can get to anywhere in the world, and we have seen that in the past with other superbugs. within years, they were found 20-30 countries around the world , and that means a common infection that you thought you could once treat with a drug in your travel pack is no longer useful. strike home that point even more on the head, we saw nine drugs being used on about a dozen firms we visited in south india. among those drugs are some of the last resort drugs available in human medicine to treat the most perilous infections, newborn babies dying of bloodstream infections that literally only one drug can help them. that -- rishaad: i'm sorry were cutting
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it short. we have to take a break. thank you so much. we have to take a break and look at the battle over personal security next. were looking at the winners and losers in that fight between apple and the fbi. ♪
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the justice department's case against apple has been dismissed after the fbi said it broken into the killers iphone by a third party. our columnist joins us now from taipei. where does this leave these two? a draw.ly, it is apple wanted their day in court because they wanted to be able to go out and say that we should write anorced to operating system for one phone.
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side, the fbi one of their day in court because they felt they had a strong argument to compel apple to do that. if there was a day in court, the result could have set precedent, important for both sides, but it was a draw. on the legal side, no one was a winner. commercially in the wider perspective, security companies play both sides of the field and were one of the winners. semantic and fire i, big in the cyber security, knowing that the hacked, and not be old iphone using an old operating system could be hacked eventually by the fbi. the fbi said that they can't hack it. it was not possible. they announced they did it, possibly with some help. if you are in the security industry, that would be good for you. rishaad: thank you. is air new zealand about to rid itself of the stake in virg in australia?
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we have that story and an update on the markets and the ipo's here in hong kong as well. all the details are next. ♪
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♪ announcer: from our studios in new york city, this is "charlie rose." charlie: david brooks is here. he has been a columnist for "the new york times" since 2003. he is known for tackling wide ranging subjects from politics and the presidency to capitalism and character. more recently, he has turned his focus to the 2016 presidential campaign. i am pleased to have him back at this table. welcome. david: thank you. charlie: it

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