tv Trending Business Bloomberg March 30, 2016 9:00pm-10:01pm EDT
let your freak flag fly. don't miss the grooviest trip at sea. ♪ is thursday, the less they are march. this is "trending business". ai am rishaad salamamat. ♪ singapore this hour, here's a look at what we are watching. a rollerarose coaster ride. and globallusion indices will arrest the trading halts. concerns about liquidity.
the leaders of asia's two biggest economies are in washington, though unlikely to meet one-on-one. obvious says his door is always open. follow me @rishaadtv and include #trendingbusiness. china markets underway in 30 minutes. quarter.of the haidi: we are ending on a strong note. the best monthly gain since 2009. still on that extended tear from said, buildingen on 2016 highs. that sentiment seeping through to the early asian session. a few strong
sessions of gains for south korean stocks. singapore lower on account of the drop in oil prices, u.s. inventory continues to build. that, some of these energy names, particularly those listed in sydney, rushing off that the klein. origin energy, up by 5.5%. that despite the plunge and oil. japanese stocks seeing gains, up by .5% for the nikkei 225, despite relative strength of the yen. the dollar continues to weekend. take a look at the movers
corporate news, banks in the spotlight as earnings come through. this is what is happening in the ta pummeled,n, taka down 20%. bill for the recall could be $24 billion. japanese up, a that of games, but reports the israeli company that cracked involvedhone has been -- the owner of that company helped to crack that iphone. hai starting trading after
being halted yesterday. a 25% haircut for foxconn agreed upon. rishaad: this is a drawn out pursuit of sharp. winning a big discount on the original price, $3.5 billion. deal set to be signed on saturday. he managed to get a big discount. >> good morning. yeah, that month of wrangling and pushing the deal was not for nothing. sharere paying $.88 per versus one dollar 18 -- $1.18 per share.
two directors out of 13 voted against it, pretty unusual sign of dissent and a japanese company. it's unlikely that banks are getting what they wanted either. were still looking out for information. as the dust settles, the question is what is next. same day as the announcement of reversed itsrp has operating profit into a loss, sign of challenges ahead. rishaad: thank you very much indeed. story, have more on that looking at that throughout the program. tweet this your thoughts at @rishaadtv, include #trendingbusiness. controlled by one of china's richest men, and other stories making headlines. china's: the impact of
slowdown is weighing. tumbled 50% in less than a year, falling below its ipo price, prompting its parent to consider taking the unit private at a cost of $4 billion. wanda has fallen this year. forecastt group has overshadowingmp, over shuttin gains from its other operations. the world's largest money manager is looking at cutting 400 jobs at black rock, 3% of workers. a spokesman declined to comment. job cuts have not been finalized.
the firm is looking to focus resources on strategic priorities. thate told bloomberg expect to in the the year with a higher head count as they add staff. larry fink had warned of cuts to two volatility in the markets. cuta's big lenders have dividend pavements in the face of rising bad loans. bank of china president says it is a sign of the new normal as his bank reported weakest profit growth in a decade. the percentage of profits paid out as dividends by the lenders fell by 30%. bank of china's net income rose 0.7% in 2015. china construction bank saw a rise of just 0.1%. slow economic growth and record levels of corporate debt have
riven bad loans to the highest in a decade. howaad: we're looking at chinese little emperors are propping up the australian housing market. this is on bloomberg.com/asia. the trading halt the close tab the market last august could cause china's entry into the to be delayed. we have more on this. it has been nine months since msci's last consultation. oughasn't exactly as they they cover their selves in glory. >> china wants to be in the msci global indices. they have done a number of 2014,s in november opening shanghai hong kong connect, and that helped
investors access the mainland market. this year, following consultations, they relaxed restrictions in february on foreign funds with qualified foreign investor license in china. they will no longer be required to apply. those of the changes implemented, but following the trading house last year and a circuit breaker mesko earlier this year, there are question -- the circuit breaker fiasco earlier this year, there are question marks. what are the remaining obstacles for china to be included in these indices? show moreally need to
inaxation in the rules trading rules and china. allow morely need to access to the market. they also need to relax rules on trackingunds china-asia products. the remaining hurdles. showurse, they need to they are ready to allow greater access to the chinese mainland equity market. rishaad: thanks a lot for that. joining us from singapore. volatilenot the only that -- bet. marketnd its riskiest outside of greece, find out why.
♪ watching thisre is "trending business". i am rishaad salamat. that japanest things is the riskiest market outside of greece. he joins us now live from tokyo. that is quite a call to say japan is the most risky place to be outside of greece. , but the data speaks for itself. interestboj posts rates to negative rates to hope that will call markets and investors, it had the opposite effect. everybody suddenly panicked.
you have wild volatility swings in every segment of the market. becameyo market uncorrelated with the rest of the world, so for anybody holding a global equity portfolio, holding on to japan was creating risk in that portfolio for no good reason. they started dumping it. we started seeing outsize value, growth, momentum, so all of the the rallies we are seeing are junk rallies. that doesn't bode well for the near term. we have earnings season coming up, and that will tell people how bad is it. rishaad: also, how much of this byk is exacerbated fluctuations in the currency? >> absolutely.
dislocation of monetary policy between central banks and the boj is creating a lot of market.ty in the fx holding onto a yen-denominated stock means you have to hedge, which costs you more, more volatile, riskier, and you don't have higher expectation of return on that as set than something domestic. have been dumping stock since the beginning of the year for that reason. rishaad: that brings me to the point, ok, if it is so risky and volatile that people should be staying clear, you're in tokyo. why are you there then? >> japan is an adjusting market for us. it has been doing the same thing for long, but it is finally getting to a stage where it wants to change, and it wants to
do things differently. we have a few clients here already, and they have been asking us to do more with them, be closer to them, and start talking to them about how you use risk tools to read the market and make sure you invest where you should be. right, and where should you be if you're going to be anywhere then? a lot of it depends on your investment horizon. we have earnings season coming u.s., japan,the and that will tell us whether all this quantitative easing last year, is it working or not working? are we headed back down? we saw some bad earnings news that'schinese banks, and a problem since they are 40% of the index, and that is about to get more volatile. they want to know in japan what is the earnings impact of all this quantitative easing.
you had somebody talk about sharp reversing their earnings from profit today. and thats the case ripples through other corporate's, especially because last year when they announced earnings, the yen was at 120. today, we are at 112. what is the impact on the earnings? was the earnings last year due there fx rates are was demand for their products? it's interesting what you are alluding to. we've had a lot of revisions, restatements, a very's corporate's and previous earnings statements. you could argue that this might the abenomics working and people are becoming more transparent with the boardrooms being reshuffled. >> you could argue that, yes. you do see some companies trying to come clean and trying to be more transparent, and others less so.
there was the whole sharp-foxconn deal that was very public. it wasn't smooth or transparent in ant we expected adoption of the new governance code and so on, so there are still pockets of corporate japan that are not changing. pressure is deftly there on them, and we want to see more of that. some of the pension funds want to insert themselves as investors. is going to come, but it will take time. thank you. >> stories making headlines around the world. aung san suu kyi has taken on a string of ministries in the new government, including a prime ministerial role. she will lead energy and education policy.
her longtime ally has been sworn in as president. myanmar's first civilian leader in more than five decades. the national league for democracy won a landslide victory in november, that it has been vague about its policies. itsh korea has repeated demand that seoul, korea and washington cancel their annual work games. the foreign ministry says the exercises were driving things to what it described as the brink of war and announced "the nuclear threat from the u.s.." almost 17,000 troops are involved in this years of drills, the biggest ever. north korea says they are preparing for an invasion. european courts have upheld the decision not to charge the london police who shot and killed an innocent brazilian man more than 10 years ago. he was shot seven times on an 2005,round train in july two weeks earlier suicide bombers have killed 52 people on the city's transport system, and
police say they mistakenly thought he was one of the failed bombers. his family say they are deeply disappointed in the decision. powered by over 2400 journalist and 150 bureaus around the world, this is bloomberg news. rishaad: right, up next, keeping things competitive, talking to bloomberg about interest rates ppe.the ruby -- the ru ♪
rishaad: getting straight to some breaking news on "trending business". one commercial property jumping 20% after a report considering requiring all hong kong listed billion u.s. dollars, shares tumbling 50%. 21% of pre-marker delly and ian wanda on the bet the company will take it private. minister sayse the country could be doing better. he believes an interest rate cut would help. we caught up with arun jaitley in sydney. >> the areas where we can do better because of several
adversities, exports have gone down because global trade has shrunk. , wesecond area of concern have had two that monsoons. have a better monsoon, we could improve. thirdly, i think there is still an need for india's private sector to invest in a bigger way. i think these are the three challenges. >> surely the low oil prices been welcome for india? >> that's the reality which we cannot tonight. lower oil prices offer a
considerable amount of savings. >> what you feel is the right price for the ruppee? >> the right price for the ruppee must be decided by the market. >> most foreign ministers and central bankers fall back on that market argument, but there must be a price where you like to see it. >> politically, everybody was to see a stronger currency. competitiveas to be -- the ruppee has to be competitive. >> you feel pressure to keep it competitive? >> i think there are pressure from exports to keep it competitive, and politics to keep it stronger. the r.b.i. next week will decide on rates. well below 6%.
how much would a rate cut help the indian economy? , wenterest rates are high have had 125 basis cuts over the last year or so. only half of it has been transmitted to the banks. the banks are in a position to transmit more, could t transmit more. it would be helpful. you need a more competitive cost of capital. rishaad: arun jaitley talking to paul and. turbulence,urrency a downdraft for chinese airlines. the market opened in hong kong and shanghai. opening numbers for you right after this break. plus, keeping tabs on one the commercial. wandampany jump -- on commercial. the company jumping 21%, the
rishaad: a look at our top story, asia-pacific stocks heading for their biggest gain in seven years. material and consumer shares among those leading the gains. the regional benchmark up 9% in march, but still down 2% for the year so far. jumpingn dalian wanda 21% on the news that the parent is considering taking the unit private. group has forecasted
a fall in sales this year, a slump in its main real estate business overshadowing games from entertainment options. giving up initial gains as foxconn sealed its takeover deal. they will pay $3 billion for a 66 percent stake, a discount of $900 million from the original agreement forged back in february. values, the common new team will try their best to move forward together. jointl enhance our operation and turn shark into a leader of the global electronics industry. -- turn sharp into a leader of the global electronics industry. juliette: some conservative
gains compared to the region. flat: the hang seng pretty at the moment. elsewhere, we are seeing discontinuation of that yellen speech. extending on 2016 highs, coming through in the asian session ends terms of sentiment. strong gains in sydney, buying oil, energy, resources, despite a collapse -- decline in oil prices overnight. u.s. inventory continuing to build. raising fears of oversupply situation continuing to take hold. up, still off session brushing off the story of yen strength, dollar weakness. weakness fromf
butapore, down 7/10 of 1%, shanghai up 3/10 of 1%. extending on that rally we saw yesterday. china'sls in focus as big five lenders continue to report earnings this week. it has been the same kind of trend. communications reporting upside yesterday, upside surprise, and we saw that again with bank of china and icbc. bank of china up seven tons of 1%. icbc up by half a percent, but still a beat. investors are brushing aside the fact that we are still seeing that bad loan coverage ratio continuing to fall. it is still above the regulatory minimum of 150% come up at
regulators will likely have to bring that down, otherwise these banks will not be able to pay a dividend. the stellar out performer of the session, of 20% in premarket, wanda commercial property, on groupws that dalian wanda may take this company private. is down 50% since june last year. we are seeing a pop in that stock. asia listing suggesting that if they get that shanghai listing that will be enough for their financing needs. rishaad: were having a look at china's state owned airlines, suffering combined foreign exchange losses of $2.5 billion less the year, all of this with the surprise yuan depreciation and august. tom mackenzie with me now having a look at these individual carriers. we are talking about the top
three players and china's airline sector, air china, china southern, chinese. they don't hedge against oil volatility. that rosy picture has been volatility,the fx the devaluation, 4.5% down in august. that is where this thing has been for them, and these are companies that buy their aircraft in u.s. dollars, spent about $100 billion on ordering new aircraft. rishaad: they are continuing to pay for them. that,y've done well on but offset by this fx devaluation. rishaad: what are the airlines saying? >> their passenger numbers are rising, a growth sector.
other airlines, particularly low-cost and budget sector, as competition. they have been cutting back on their u.s. dollar debt. last year, those lines were cut. that should play into a more profitable picture going forward as they reduce that debt level. china southern slashed there's by 40% by the end of the year. rishaad: what are people saying about these carriers. where do we go from here? >> most analysts still see a positive outlook for these airlines, the sector, china as a whole. it is the world's largest travel market. rishaad: a can't help but the with 1.4 billion people. >> the central government shifting away from manufacturing , a positive for the sector. they know passenger numbers are growing, but competition as well. what happens to the renminbi
going forward will be at the top of their agenda. rishaad: thanks a lot for that. years of pursuit and five weeks of last-minute negotiations, foxconn ceiling p, paying with shar $3.5 billion for a 66% stake, a discount of $900 million from the original agreement in february. the foxconn chairman has been chasing sharp since 2012. he was a transform foxconn into a company that also sells electronics. ass has come as a shock electronics was japan in many ways for years. great to see you. what was your reaction to this? think the overall reaction is in corporate japan? >> it is the first time. it is a bit of a culture shock. foxconnhink about it,
isn't the leading edge of japan anymore. the perception is that it is so. if you look at domestic production, it is less than half than 15 years ago. it is not the leading edge. jab about time we had a new in the arm with new management. we tend to have with a chorus line management, where everybody -- ask the same. acts the same. rishaad: aren't there just too many players in japan? there are so many people in consumer electronics there. >> absolutely. there are far too many players, and players doing the same thing. they are not specializing at what they are good at.
everybody once to do everything for everyone. this has to change. conglomerates really have to focus more on scrap and build type of process. bang on you have been about it for years. it is a bit of a cultural issues , very difficult for a foreign company to come in and take over a japanese company. are these walls coming down? >> it is coming down, but slowly. it is the first time that this is happening. we did have a good example in 1997, where nissan was virtually taken over by renault. was a positive instruction of some negative parts of japanese management style. they have a totally different methodology, but it is another giant to survive.
diversification in management does and could work in japan as well. rishaad: i had a guest on earlier saying that in the countries they look at japan is the most risky apart from, and would you believe it, greece. well, you know, i would like to be nice and say lack of observation is one thing, but to basically label japan as being behind simply because we don't introduce american type of governance is totally wrong. we are different. thatact that the matter is the blindfold introduction of american governance is not the way forward. yen hurtingong exporters, but if you look at long-term competitiveness, i would like these people who are scared about japan to continue to be scared, because that also means we are trying to sustain our strength by not changing totally into their governance
style. rishaad: right, well, there are moves of course to shake up these boards in japan. do you think these will amount to anything which will represent the radical departure from where we were, a corporate culture that has led to the rise of sharp, theolympus, tip of the iceberg? >> i think there are a lot of negative parts which need to be broken up by the introduction of other types of governance, but that does not mean we should converge or merge into an american type of governance. that is wrong. yes, we need to have a partial introduction, but that basically is a partial introduction and not a total introduction. pointk we are at a danger of misunderstanding that a total introduction would be the answer for everything.
external managers are not going to change corporate japan from the core. we need something more deeply rooted than that. we've been talking to each other for 15-16 years, and you have always been a pessimist when it comes to japan. is that pessimism becoming optimism? >> i've never been that pessimistic. i've been very critical. the fact of the matter is that we have our strength and weaknesses, but unfortunately we are blindfolded by the recent current scandals, like that of olympus and toshiba. also the transition we are seeing, as you can see in today's news on sharp, were moving away from electronics industries. people tend to get worried we are losing out, and that is not the scope. at atunately we are wishy-washy stage of being worried and thinking that a
transition is the right thing to do, which i think is a very big mistake. rishaad: have a good one. joining us there from just outside tokyo. let's have a look at some other stories. big energy companies making deep cutbacks to cope with the crash in oil prices. petroleuma and china saying they will reduce spending by $4.6 billion, 8%. 27 billioncombined dollars last year. china moving to the upside in hong kong. book, the symbol companyn is an, now a by the same name has become a capitalistic success story. they just raise money from
tencent and others. the online shopping site contacting -- connecting overseas merchants with chinese buyers. says it investment fund plans to repay $1.5 billion in the coming weeks as asset sales find room to pair down debt. this will leave the company without short-term debt or bank loans. says they will have a cash surplus of almost $600 million after settling that debt. they are being investigated in malaysia and abroad over allegations of financial irregularities. it denies any wrongdoing. the leaders of china and japan take the opportunity to ease simmering tensions from once again damaging business ties between ages two biggest economies. the details from the summit in washington. ♪
>> welcome back. it is 9:45 a.m. in hong kong. these are the stories making headlines. and underground refrigeration system at the fukushima power plant will be switched on as early as today. buried pipes will freeze the soil, creating an ice wall. regulators approved the $300 million plan and the hopes of stopping toxic water from leaking into the sea. the cleanup is expected to take decades, and some experts remain skeptical about the technology. buildingorkers stadiums for the 2022 world cup are still being abused by employers. it cites new allegations of forced labor and squalid living conditions. officials insist things are improving and says parts of the report are out of date.
they have been dutch by claims of corruption and abuses since it won the rights of six years ago. launched the latest satellite in its global navigation system. designed to offer an alternative to the american gps operation and now features 22 satellites in orbit. it was the 225th launch of that rocket. the sunlight will undergo weeks of testing. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. the leaders of age's two largest economies are in washington this week for eight nuclear summit hosted by president obama. tensions between china and japan have been strained, and it is thought highly unlikely that they will be meeting one-on-one. our asia government editor, andrew davis. shinzo abe saying his door is
open. >> clearly both sides are playing down the chances of a meeting. we could still see something happen. at the last summit, tensions were high between japan and korea. w saw president obama broker a three-way meeting. it is time these two leaders meet. has meetingsobama with two blocks of people, the chinese and japanese leaders don't me. it is just under a year since they did get together. are they letting their relationship faster? >> it seems to have taken a turn for the worst. -- the worse. we saw in the meeting last year that there was actually some conversation, some engagement, hope this would move the needle,
but it has taken a turn for the worse as we have seen tensions rise in the south china sea. japan has passed security legislation controversial and china. there has been this whole narrative in china since tiananmen, a century of suffering that the japanese -- chinese have gone through and the japanese play a big part in that narrative. rishaad: a lot of revisionism as well. >> quite a bit. japan remains the boogie man in china of the chinese government. they like to roll it out every once in a while, and the tensions are really souring again. rishaad: you approach it from the idea of commonality, don't you? one place where there is a degree of that is north korea. >> sure. i don't think china is waking up to the threat, but it is beginning to take the threat of north korea more seriously.
they don't have the influence they once had. goingng-un seems to be his own way and angering the chinese after this fourth test. we saw the chinese get on board security council sanctions, which they had resisted. really feels threatened by north korea. those nuclear weapons can reach tokyo, seoul, beijing. rishaad: and beyond, if you believe what pyongyang says. they should be able to hit the u.s. as well. >> there is a lot of doubt. rishaad: put a nuclear weapon on these ballistic missiles. >> clearly they can detonate a nuclear device and are getting closer to the technology to launch one. they are going down that half, and sanctions have not stop them so far. this is a common threat to china and japan.
they are terrified that if they push north korea too far that the regime will collapse and they will be flooded with refugees. there is a lot of common ground apart from economics. japan is the second biggest trading partner, and china is the biggest trading partner. they need each other. rishaad: thank you. have singapore's reign as a popular destination and southeast asia coming to an end. find out who is the new number one, right after this. ♪
we keep on crossing the gain line. in tokyo, turning tail and moving lower. we have stocks down 1/10 of 1%. the asx 200,4% on 5079, a quick check with the straits times index. a pullback of over 1%. it comes against the backdrop of the country losing is appeal as a leading destination. let's get over to our southeast asia correspondent. why is singapore losing out? andas all the reasons infrastructure to be attracting these ipos. toit is not really due singapore's own failings. it is more to do with the ability of its neighbors to
attract local listings, indonesia, thailand, now able to convince their own companies to stay at home instead of flocking to regional hubs like singapore. the small exchanges and southeast asia have upped their game, promoting themselves as a listing venue. take for example indonesia. it plans to start an exchange dedicated to young technology companies. it also wants to become the largest docket exchange and southeast asia within five years , so pretty ambitious. thailand has been playing up the importance of its own capital markets, so singapore suddenly finding itself competing with these markets. it is the largest exchange and southeast asia, but ipos so far this year have amounted to only $34 million, lagging behind thailand, even malaysia. last year, it amounted to less than $400 million, the worst
performance in years. not looking pretty. rishaad: who is number one? who is leading the pack this year in terms of listings? >> guess what? generated $170 million from ipos this year. it has a pipeline of state owned enterprises planning ipos, 177 ipos through 2020, vietnam mobile telecom, vietnam national shipping lines here at on top of that, the hanoi stock exchange has been booming. companies not yet ready for , iting in its otc market was to speed up the process, so vietnam in the lead, and it looks like it wants to stay on top for long. rishaad: thanks.
this is charlie rose. charlie: jack lew is here, the u.s. secretary of treasury. a role since february 2013. he was previously president obama's chief of staff. and prior to that, he was a director of the office of management and budget. a role that he also played in president clinton's cabinet. on wednesday he will deliver a speech on the impact of u.s. sanctions policy. he will deliver that speech at the international peace in washington. coordinated sanctions led by the u.s. were integral to reaching the agreement with iran