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tv   Asia Edge  Bloomberg  May 8, 2016 11:00pm-12:01am EDT

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minister says that any oil trade must include iran. and one indicator suggests that currency could reverse its course. and rio is betting on a rebound of copper. we have a special report. also coming up in this hour, he is just one in 50 million out going to vote for the philippine president. we are live in manila where stocks are 5% down a from a 15 day high. let's get to the markets with juliet right now and, juliet, how are things looking? look at: just having a the w ti contract, they are up just 2% of the moment. they are holding a $45. the contracts are also rising. it has been given a boost by the new saudi oil minister announced over the weekend, up by 1.5 percent. the u.s. market is influenced
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because of the fires in canada which has knocked down about 1000 barrels of oil a day. now that, as he would expect, has given of the dollar a boost. the regional look is pretty flat. taking a look at oil and gas, we are seeing a that up one third of 1%. we are tracking the 28 stocks down and seeing the majority are high. you can see that in australia and here in hong kong, we have certainly among the best -- performers. also here in hong kong, they're up by 3%. quite a boost to the oil sector. , this has given a boost to the japanese economy? yes, this was after
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quite a shocker last week, but it was in the red for most of the session today. on its lunch break, up one half of 1%. we did hear a more good news coming through from the u.s. markets on friday, the likelihood of a rate hike in june a very much dissipating according to many economists and does that -- and that does give you a general impression. ng kong will be good as well of openingsessions up to three quarters of 1%. the trade coming through from china over the weekend has disappointed investors in the asian markets. it is down by 1.8 percent, so it is at a seven-week low there. korea today, the markets are mixed. singapore is looking quite good, going up one half of 1%. we are seeing weakness coming through in australia as well today. see, they are also
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coming under selling pressure there. toeone has just turned in the red, and new zealand has been in the red almost all session. we do have japan on a lunch break what we are hoping that their good session from this morning will continue into the latter part of the day. to givereally important that boost to japanese equities if i can get it to come up on our screen. it is at the moment a little weaker at 2/10 of 1% there. voting is underway in the philippines where more than 50 million people are choosing a new president as well as lawmakers at national and local levels. the focus, of course, is on the presidency. asia considers the philippines the rising tiger. hadlinda for us all
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day today. how is it going, had? all daynda for us today. how is it going, has? da: yes, we have been here all day today, and we have not heard of any reports of a violence, but we are hearing broken machines and some ballot papers have been left unsecured. this was reported about just 10 minutes ago. we have heard some people also complained that they have been unable to find names to vote for. trying to they are resolve these issues.
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the issue really is about whether the machinery for the hacked.rocess has been we don't know for sure if such incidences are happening. as you mentioned, there are 54 million eligible voters. is a maximum term for the president of six years. the leading candidate is a leader who is seen as a renegade leader. he has been leading the polls at 33% followed by senator grace poe at 22%. duterte has been compared to donald trump in the united states. even though the philippines has grown at about 6% on average over the last six years, well has been on evenly distributed and if you take a look at just the poverty level, 26% of the
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population still lived below the poverty line. that begs the question of what is at stake here and many people are wondering if this will build economic momentum. it remains to be seen who will come to power in the next six years. shery: has, what happens after today? da: well, the counting begins. we have some indication of the winner in the next 24 hours, but the actual results, the official results, won't be finalized for a time. where we are right now is looking at the unity of the country and many people say that they think this is important for the different factions to come together. this is the biggest election of the country has seen in the last the margin of
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leading candidates has been very strong. all right, thanks for that. richard hidardian is a professor and there are concerns over the results. whether legitimately or if people are suspicious of election irregularity, what will he do? this is a problem because there is a high expectation that they will win and we don't have exit polls. we would have to accept anyone other -- any other victory. john forbes is a senior advisor in the philippines and he told us what investors are is election.in th
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john: investors are looking for continuity. investors and board investments have gone up 5% to an average of 6 billion in the last two years, so we are looking for an administration that will have, nudity, almost seamless, ein terms of infrastructure and we will build on that with an additional reforms, because not everything has developed equally in this outgoing administration. and others say investors are concerned about the legitimacy of the polls. and anything can happen in this election. i think we are moke -- more concerned about honesty and away. >> that was the word from asia.
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one indicator suggests that is the market in japan could soon reverse course. some investors say this could only lead to weaken other currency. haidi is here for a closer look. haidi? yes, some are saying that this is a signal for yen the yen to weaken. that is the latest report from the bank of japan. relative to the u.s., it is highest since 2006. japan'smind that economy is one quarter of the u.s. economy and it could outstrip the u.s. as soon as this month.
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and 22%compared to 31% when it comes to the u.s.. -- theson i am sorting reason i am mentioning the george soros chart is because he yen.oned a weaker it tumbled 30% against the dollar in a two-year period. many say this expanding monetary base is a factor. the yen 11%ven up against the dollar this year and there is hope this will continue. that the boj is doing all it can, whatever it takes, there is hope that this is planned out to prevent weakness. the boj would have been hoping but it wason friday
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a miss. the boj needs that divergent monetary policy and the weekend is crucial to growth efforts in japan. the other concern is that the boj may be hitting the upper limits of its monetary expansion. is essentially them having trouble finding more securities to buy giving the record amounts they have already purchased. there are some concerns that the central bank will be able to hit its purchase targets this year. angie? haidi.thanks for that, there is discussion that the subnet yen strength and weakness is bad and they do have to intervene, also saying that this rapid move is not desirable and "the japanese government has means to
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intervene." he also says he doesn't think negative rates have had a negative impact on the japanese economy. come, north korea outlines its five-year plan for the economy. we will have more later from py ongyang. all that and more coming up on "asia edge." ♪ angie: 11:14 here in the
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morning here in hong kong. the wildfires in the canadian oilsands region has knocked out oil production and is threatening neighboring saskatchewan. more people have been evacuated from alberta. oil company,est
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suncor, has pulled workers out of the danger area. ung-un told his party nuclearwould not fire weapons at first strike and would only use them after being attacked. he released a five-year economic plan, the first since the 1980's. they have a plan for their economy to improve power supplies, economic manufacturers, and connections with the outside world. and the convicted drug lord joaquinel chapo -- lord guzman has been extradited to the united states. he escaped out of the original prison cell last year after tunneling two miles under the shower. this is bloomberg news.
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the latest trade in foreign exchange data in china points towards moves up, but the numbers are slightly positive at best. stephen engle's is here now with more. was lookingryone for stability and we've got it, sort of. it rose 4.4 percent. that is the second month in a row where it rose in you on -- rose in yuan terms. but a weaker currency helps exports in china be more competitive a broad but they are not really banking on a big boost against getting the economy out of the mud. the economy still faces great downward pressure. domestic demand continues to be weak and imports fell for an
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18th consecutive month. the yuan was lower by nearly 11% in dollar terms. it has been down 11 out of the past 16 months in the last year. meanwhile, china's foreign exchange reserves posted their first back-to-back monthly gains in nearly two years. through half arn billion of its dollars after the surprise valuation last august. china's world leading pile of fx trillion,ose to $3.22 but the fed holding off at raising rates stem the outflow and again, they reiterated it wants to keep the yuan stable. ang? back to theet's get
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summit in hong kong. it is time now to buy into emerging markets. yvonne? yeah,: hi, there, angie, black rock has really had that goal since the start of the year. -- and here toth talk more on that is andrew swan, the head of black rock. this is something you have made calls on since the beginning of the year. have we passed the low point? andrew: good morning. i do think there are a couple things in favor right now. firstly, on valuations, where markets have been trading at historical trough valuations, if is look at the markets, it probably the most extreme we are seeing. valuations are probably very, very defensive. are out now or in
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defensive positions. thirdly, i think what is really important now is we have seen a bit of growth come back into the economy. not only in india with its own policies, but more importantly, the fed has changed her reaction to become more dovish. we are starting to see growth reemerge, although not really strong, but better than it has been in the last few years. yvonne: you have to see some growth momentum. are we seeing any change in terms of the fundamentals? ofjust saw a lowering production in 2015. andrew: we are seeing increasing signs in china and india. china and india are obviously very important to asia. an extrais is a bit of fiscal spin and investments been.
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what you see our companies depreciating their capital currency, and that is just providing a backdrop for growth in the last few years. yvonne: we are expecting a low euro, a low dollar, a low yen, that how does this turnout in asia because we are seeing rate hikes? andrew: we are living in a global environment which makes policy really important, so the market is quite uncertain in terms of how that policy is going to go. all asset facets are quite fluid. i do think we are weakening at the moment outside of asia, which means the fed will be on hold for longer than the market thinks, especially in asia. this allows us to get ahead. do you think they will be ahead this year, you think? andrew: i think that all depends on the data and the feds are watching the data very closely.
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yvonne: you remain pretty positive when it comes to china and -- when it comes to asia and could this be a structural positive in the short term when it comes to feeding into the economy, eating into earnings? andrew: exports have been a very big headwind. more importantly, we have prices of commodities and materials falling down, which is affecting of the value of exports in global trade significantly. with of first-quarter numbers, to consider that so if we do get a weaker dollar, which has been the case in the last couple of months, trade could pick up to the back end of this year. yvonne: you still see some value when it comes to old growth drivers? andrew: yes, we are seeing the difference between the stocks and the old economy stocks now have reached a point where
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things are changing and it is a supply side reform in china in particular. we will have to watch. andrew, thankght, you so much. we appreciate your insight here. up ourswan, that wraps day here at the ubs global family office. angie? angie: all right, thanks coming yvonne. coming up, a big hit revitalized. have a report from mongolia in their coppermine coming up next on "asia edge." ♪
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angie: at the start of this trading week, the market had weak demand from china. some miners are still optimistic and we go to mongolia for more to report. there was a time not too long ago when it seemed this moment
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would never happen. have been setghts aside. we are talking about the lion's share of copper in mongolia. there are american efforts getting to this point. >> this marked the determination of many, many years of hard work, some blood, some sweat, and maybe a few tears. >> this was a largely symbolic event. mongolia's prime minister assured those gathered that the previous difficulties were firmly in the past. >> we will no longer look at political rhetoric. we will only focus on growth. >> this is by far the biggest project ever undertaken in mongolia. beyond that, this
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multibillion-dollar expansion is also a huge bet on the long-term prospects for copper. >> the long-term needs of copper remain strong and production is expected to start when copper markets become deficient, which very good news. >> they are expected to produce more than 500,000 tons of copper a year. it would be the third-largest copper mine in the world. >> this is a real opportunity to expand their presence in copper and begin to minimize their leverage to iron ore. >> it is estimated that once complete, iron ore accounts for almost one third of mongolia's gdp, but that is a long way away for a country facing immediate challenges, including spiraling debt and a looming general election. bloomberg tv mongolia in the
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south gobi. angie: we are looking to resuming business in tokyo after this very short break on this mixed market day in asia. that right after this break. -- back right after this break. ♪
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angie: the top stories this hour shows that stocks in shanghai fall to a seven-week low, greg byn -- low, dragged down tech. stocks plunged almost 11% in japan. japanese stocks then rose for the first time in almost seven weeks. crude prices are rising as to thes wildfire spreads main oilsands facility, knocking out about 1000 barrels a day. same time, saudi arabia
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has named a new oil minister, who is expected to keep production at near-record levels. any output freeze must include iran. his vote inas cast the philippine elections for new lawmakers. more than 54 million people are eligible to cast their ballots. give dutente 33% of the vote ahead of grace poe who has 22% of the vote. plus, get the latest on the market right now when japan comes online. here is juliette. juliette: it was a pretty good morning session for japan. they are getting a little bit back, up one half of 1% there as they come back from that lunch break. a very see it is
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different story in shanghai. as you mentioned, stocks tumbled over the weekend and they were at a seven-week low as they close at 2.2%. it has been better here in hong kong after it wasn't a great week last week. that itther sessions was open, it was quite lower. ,or five sessions in a row, it was low. hong kong is now doing well as we continue to see that crude rise. the oilon the backs of news with the wildfires in canada. singapore is higher by one third of 1%. new zealand is down and korea has been under pressure all morning. just look at all of the stuff we have been watching, singapore futures has skewed metal groups a little bit of mixed
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movement coming through out of hong kong with property developers. that is the state of play across asia markets this monday. angie: thanks, juliette. check in on shares at the commonwealth bank. let's get over to paul allen in sydney. and it isrofit was up not like the big debt stock in the banks, is it? right, angie, it is a familiar story. million from 260 -- 256 dollars one year ago. statistics, they are capitald a point at
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equity, coming back a little bit. but it is a story of bad debts again. down iront weighing iron zed lastk -- or week. you can imagine declines on the asx could be weaker today ahead of reasonably good results from coldwell banker. getting tough but things still like to hold them for the yields of the dividends. they are still relatively healthy, angie. angie: ok, thanks for that, paul. other headlines right now. honda is planning additional recalls that could cost about $2
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billion and it follows toccata -- takata ordered to replace 275 million devices. this is after a mail campaign to urge drivers to have their cars fixed. toshiba has a replacement after a shareholders meeting in june. kawa will narrow toshiba's wide operations. and disney's new shanghai theme park is proving popular even before its official opening. the company has been doing well ahead of next month's launch. operations for a number of guests and hoping for
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the $5 billion resort to tap into china's burgeoning middle class. and combating monday laundering -- combating money laundering with newly created registries in singapore. must consider new applications for bank accounts. there is an investigation of troubled state funds and they charged a former private banker with money laundering. france's largest phone company is looking to expand outside of its traditional market after a deal fell apart. it is seeking opportunities in emerging markets like africa and the philippines. joining me now is orange's deputy ceo and they are moving ahead. where are you looking for acquisitions? hello, angie, in fact, yes,
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we were really thinking about this merger within the french market. fromnsider it made sense the investment standpoint, but doingsuspected very early deposits, we said it would happen only if it would generate interesting profits for the company, for the shareholders, and if it could be exemplary from a stock standpoint. butn, it didn't happen, this is very important for the investment of future businesses. we don't think there will be many, many cross-border mergers. but we do have many other
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opportunities to grow our business, and as you mentioned, africa and the middle east are clearly geographies where we are still continuing to invest. invested in the drc, the democratic republic of congo, and we are putting our footprint in this area of the world. angie: specifically, which countries in the coming months, s enough to offset the acquisitions that you had been hoping for? thierry: i would say it is not a of opposition. when it comes to my business or orange's business, we are almost everywhere around the globe. are continuing
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business, and we are now in the top 2000 companies around the globe, and we are more or where we areg expecting opportunity around the globe. course, this is key in africa because it is a region of the world where there is growth and it is incredibly impressive how fast things are happening here in this region of the world when it comes to digital transformation, so we are there bringing our technologies as well as expanding our workplace. world, wegion of the want to move into asia, africa,
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and the middle east where we have a very specific niche. angie: trying to get into europe as we know and we have been following that with the tight regulatory environment making it difficult for everyone. what are your thoughts there about how much regulators are putting up obstacles here? thierry: that is the story of twomerger between companies, one from the u.k. and the other from the eu. this is explaining why it will be difficult to have a merger 24 strong have regulatory bodies there and that is a difficult story for counting all of the different shareholders, stakeholders, the other countries that we are looking atards and consolidation for this market.
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that is happening almost everywhere, but once again -- , i've got toierry ask, what are the thoughts from regulators? thierry: there are constraints which are generated by the competition, the competitors are and they arek. consolidations d and there is free trade and free a -- decon so this is onsolidation and there is free trade and free competition so that is the main driver. this is very key for investment and investment is very key for our workers and we are very much concerned for what we can
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provide for the customers. we want investment within infrastructure, investment within the management. angie: thierry, we are going to leave it there. thank you so much for joining us in singapore there today. that is thierry bohomme, orange deputy ceo. we have more of today's top stories coming up next on "asia edge." ♪
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angie: 11:43 a.m. in hong koing, --andp.m. in new york, 11:43 p.m. in new york. here is a look at the headlines. donald trump has recently
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released his economic proposals releasingcludes -- and the election is a challenge to the rising a rhetoric such as right wingers like french national leader marine le pen and american donald trump. and authorities have asked interpol to issue a red notice for the arrest of the aviation of the kingfisher airline. the u.k. has asked to extradite him for failing to pay his creditors. various funds and he intends to pay up. has been reported
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through 150 bureaus around the world, this is bloomberg news. joining me now are stephen, market strategists. we all have to pay up -- and how many rounds have we seen? it feels like such a long time? >> there have been several in the u.s. and japan has been without too much notable impact. they warned us that if the central bank is the only policy instrument, then there is much that they cannot do, so i think that is now a we are seeing and the central bank is kind of the end of the road almost. was just reading her notes, and what did you think about -- your notes, and what did you think about abe's
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plans? we could still see many bottom-up opportunities and japan excels in a particular range of industries, so that is case, intock picking japan, rather than just thinking about depreciation, etc. i think for a lot of us, japanese stocks don't command a lot of respect anymore because has beens going up manufactured by the abe administration and still, you do see an upside to that. geoff: i think so because we are seeing that japanese companies are strong and would they are getting a return other equity in the last couple of years in the region, so it is not just a yen by the exporters, we are seeing
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stocks of that we like in the domestic sectors in japan, particularly some of the service sectors. so as the macro looks as if it is not going to improve, and the last two years have been disappointing in the fiscal policy and reforms, we could still see reasons to invest in certain areas -- tokyothis because of the 2020 all of bricks? -- o lympics? geoff: i think that is too far away to really have an effect on the economy. stephen: then they can deal with a post-olympics economic crash. [laughter] angie: but they really do love consumers. and china iss true
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still growing at 6.5% so it is a pretty damn good number. angie: why don't you just go look at the philippines? is cheap andthat elections are coming up, so i don't want to seem like i'm dabbling in politics. [laughter] the prcve had beginning to stumble and how is that starting to affect it? geoff: they have managed to stabilize a but i think people much emphasis on the pmi much too much. it is a pretty volatile subcomponent. if you look at the cyclical indicators and the data in
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general, look at the indicator, then that is showing improvement across much of the major markets including china and brazil. the guess that is helping local currency in china and helping the overall economy right now, but once they get the challenge of the rising dollar, it might be a different story. geoff: i think a strongly rising dollar and the fed rate raise is always a head wind, and that is what the data shows us and that is what economic research shows, and whether we will see that depends very much on the stress of the economy and will whether we actually see some rate hikes later in the year. the u.s. will continue on a fairly subprime mode and janet yellen has remained rather dovish. the brexit, trump, any concerns?
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fine, he is the candidate now. it will be up to the u.s. electorate to decide. , you can't do that, economic -- macroeconomics doesn't allow you to look at that kind of detail. the polls now are very, very close, so we will have to wait and see. should there be a big selloff after voting in favor of the brexit, that could be a big opportunity. i think the risks to the u.k. are actually pretty limited. angie: is there still a consistent consumer playing? does that offset any concerns from the macro view? at the end of the day, people will still want to spend. geoff: well i think for the -- what reallyly could be the issue is that
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london is the financial center and if you look at how much competition has come from frankfurt, from paris, it has been pretty limited, i think, so on that front, the u.k. will continue to function as a major global financial center. , so good to see you and talk to you. homing up, korea's -- nort from's five-year plan the isolated economy. that is coming up on "asia edge ." ♪
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angie: welcome back. you are watching "asia edge." angie lau. manus cranny is standing by. manus, what do you have for us today? manus: you were going to be shocked here. i am going to start with oil.
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it is not just about the changing dynamics. i will just expand a brief form that region. we have the ceo that is going to talk about the funny story and also get a bit of context as to what happens with the next opec meeting. what way will the swagger form from the society as we go from the first opec meeting with the new man in charge? we also have the ceo over at mas hrick securities and we're going talk about oil and in a world of 0% interest rates, if you could get 3% for a single a
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rated bond, i would know where i would put mine. angie: i want to know or that is. [laughter] here, it is right right here in the middle east. angie, back to you. dubai,manus cranny in manus, think you so much. north korea has its five-year economic plan to focus on energy and manufacturing. we have a look at how north korea has changed under kim's rule. the old economy still dominates in north korea. large factories churning out basic products like this copper cable maker in pyongyang. the company produces more commodities, but china has banned exports due to u.n. sections.
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it relies heavily on agriculture. ang, at least, new there have been notable changes. buildings have sprung up. there are more cars on the road. and there are growing choices of shops and restaurants. we got to ride in a city taxi operated by one of the country's government-controlled cab firms. even the public transport system even the public transport system has seen some minor upgrades. we are inside the pyongyang metro. it is big, it is grand, and many are reliant on it, but it isn't stillate, and they are -- are still relying on these old german trains. passengers can also now swipe in rather than relying on paper tickets. back on the city streets, there is evidence of a more significant technological upgrade. residents are avid smartphone users and they can choose from a
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number of different brands. we visited this store selling a phone supposedly produced here in north korea. the top model costs around $400 and comes preloaded with an android operating system and a host of apps, including five versions of angry birds. but as is often the case in north korea, things are not always what they seem. international calls are blocked on cell phones here and the only surfing you can do is on the government-controlled internet. for bloomberg news, i am tom mackenzie in pyongyang. angie: all right, let's take a look at the markets opening in this region for you right now. hong kong's market climbing and exports and imports, imports particularly disappointing. japan and south korea, this is the view from there. 25, half anikkei to
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percent higher. that is it for us on this edition of "asia edge."
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♪ ♪ manus: foil arises -- oil rises. saudi arabia says it will maintain near-record output and any freeze must include iran. rishaad: middle eastern governments are stepping back from remaining reserves by reopening access to bond markets. manus: and a glimmer of hope for india's rural economy. forecasters say

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