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tv   Asia Edge  Bloomberg  May 22, 2016 11:00pm-12:01am EDT

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benchmark is largely unchanged. omics asssure on aben the yen strengthens. the differences were laid bare at this weekend's talk. china warns hong kong not to rock the boat. data suggests the ship is already taking on water. president obama arrives in hanoi. haidi: keep an eye on the markets as a brand-new trading week is underway. 2/10 ofific up about 1%. a fourth straight week of losses. we are seeing the makings of a rally, although we are looking
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quite mixed. a lot of weight and see, waiting -- a lot of wait and see, waiting to see what janet yellen says later this week. g7e disappointment after the failed to yield any sort of accord. picture, nikkei 225 down by over 1%. strength creeping up and that is weighing on sentiment. hong kong up by about 4/10 of 1%. the banking sector all doing quite well. elsewhere around the region, we
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have inflation numbers coming through from singapore a little bit later on. australia and new zealand off their session lows. weakness coming through from oil and gas. oil continues its retreat on the back of those comments from iran saying they would not participate. we are seeing weakness across basic materials, led lower by the iron ore miners. outperforming.ks this is a tie one story. -- taiwan story.
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angie: we have some breaking news coming out of vietnam. that is where president obama is making his three-day visit. we have a trade deal to tell you about. boeing said to be nearing a multibillion-dollar jet order from thvietjet. we will track president obama's visit here in the region. over to japan were exports fell for a seventh consecutive month due to the stronger yen. imports also down. the largest in six years. we have yvonne man in tokyo for us with the numbers. what do they say about abenomics? forne: just more pressure prime minister shinzo abe as he tries to figure out what to do
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next. not much love or a blessing coming out of the g7 summit. , another dose of spending coming out of japan and when the government tries to weigh on whether to postpone that sales tax. disappointing figures. oflining 10 1% in the month april. that is thanks to that stronger yen which did appreciate about 5% in the month of april alone. the earthquakes may have impacted the shipments of car parts as well as electronics. shipments to china and shipments rose to.s. fell, but the eu. the drop in oil prices dampening that figure.
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we are seeing the surplus, the biggest we have seen in six years. $7.5 billion, which is $2.5 billion more than what economist were expecting. what does this mean for policy? around a 1% 10 handle. .10 handle. ministers metnce over the weekend ahead of the leaders summit. what happened? yvonne: really not much happened. it camef appetite when to coming up with a global response on growth. we saw a lot of fiction between the u.s. and japan. we heard from the finance
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minister, continue to talk about the yen, the recent move had been one-sided, speculative. they did have a meeting with jack lew and he did not think that way at all. he said the disorderly movements, we are far from it. let's listen to the finance minister of japan. there are no peter discussions between us. betweenated discussions us. natural to have gaps in perspective. the only difference between the u.s. and japan, the u.s. dollar is a reserve currency. >> downplaying the friction a little bit on that soundbite. the tensions were a bit high. the sharpest dissidence we have seen between the two countries. they probably just agreed to disagree.
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very different from what japan was saying. global growth is going to be top of the agenda as well as foreign policy and climate change. we will see if we get any kind of consensus. angie: the u.s. has warned japan and its neighbors not to engage in competitive currency devaluation to boost their exports. there is one factor helping keep things in check. >> the u.s. treasury has been on the offensive. the last semiannual fx manipulation report and stu four asian currencies -- points to four asian currencies. in trouble for potentially manipulating their currencies in some shape or form.
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this will continue to be a point of contention as we go forward. the one thing that is helping at the moment is the strength in the dollar which is buying some time in terms of the appreciation pressure we have previously seen. target is boj's 2% having the exact opposite effect of what is intended. achievemics, trying to this 2% inflation by a competitive devaluation is the wrong policy choice in japan and is pushing the economy towards financial disaster. by actively pursuing inflation, they are shifting even more income to the corporate sector and they made the mistake of actually increasing the tax burden on the consumer. says theremy lawson
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yen's fall has had little impact on growth. is not currency weakness very clear to me that the yen is overvalued at these levels. i do not think the yen depreciation had a very big impact on the japanese economy anyway. angie: that was the word on the yen. boeing is said to be near a multibillion-dollar jet order vietjet. are edgingenemies
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closer together in response to china's growing influence and assertiveness. we have angela traveling with the president in asia right now. what does president obama want to accomplish? angela: trade is an important part of what president obama is doing here in vietnam. affirming the u.s. relationship with vietnam from a trade perspective as well as from a strategic and defense perspective. he will be meeting this morning, leaving shortly to a visit -- for a visit to the presidential palace. he will be meeting with the vietnamese president. he is meeting later today with the prime minister as well as the head of the general assembly and the head of the communist party here in hanoi. days, this is
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unprecedented when it comes to a country like vietnam. betweenroubled history the two nations. how significant is this trip? angela: it is a very significant trip, a trip that president obama chose to add on as he wraps up his presidency. he was traveling to the g7 in japan and decided to add on vietnam. he becomes the third u.s. visit -- president to visit vietnam cents the vietnam -- since the vietnam war. to press for better human rights, press freedom. he will be talking with society leaders tomorrow in ho chi minh city. he wants to have a good relationship.
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vietnam is strategically important in terms of its location near china. it is an important relationship that goes both ways. angie: china will be watching, no doubt. following,es we are iran has repeated that it has no plans to join a freeze in oil production until the second half of the year or until its exports returned to pre-sanction levels. it hopes to surpass 2.2 million barrels per day before the summer. rebuilding its energy sector. india has successfully launched a reusable space shuttle. -- india sent a
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mission to mars for just $74 million two years ago. it is a fraction of nasa's 19 billion-dollar annual budget. has resigned as chairman and executive director one year after shares were suspended in shanghai -- in hong kong. an investigation amid regulators and questions over its accounting practices. was china's li richest man. let's get back to the markets. we are managing to just hang on to miniscule gains. after a fourth straight
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week of losses for the index. we are seeing pretty modest gains coming through after quite a bit of vacillation. the nikkei 225 is down by over 1%. the strongest gains coming from taiwan. the tech stocks dragging some of that upside. taking a look at some of the movers we are following. in the japanese session, we are -- even thoughs it had a positive number to report, analysts believing the company will not be able to make its midrange target. it did tumble over 7%. blue scope ofing,
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the most in seven months. angie: china's crowdfunding campaign, white tech rooms are seeing success looking for tech rooms are seeing success looking for funding online. edge."tching "asia ♪
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angie: after four weeks of losses, we are seeing asian stocks fluctuate. let's discuss market strategy. here?re investors to do is it about fundamentals or
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momentum? >> the sentiment has remained weak. you have to increase your knowledge of investments so you will be able to hold it. angie: based on what parameters? is it the fed, global economic environment, growth? >> the market has been overly concerned about global growth. both are not going to happen very soon. the fed is not going to hike until the second half of the year. the market has been very concerned about it. angie: you do not think it is june or july? >> july has a better chance. sayink they are trying to
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it is more likely they do not like the futures market pricing. they want to change the market perception. difficult. -- i think they would probably like to hold on until july but they want to warn the market first. angie: one could argue that those concerns are absolutely valid. take look at how asian equity markets have been performing, emerging markets, currency fluctuations. it has been pretty stable since the fed sounded really dovish. the fact is, there could be outflows. >> outflows have been a long time in the market already.
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inflows.has seen some china is a big concern for the market. waitingsay the fed is eighing the domestic situation more. yellen will likely be able to wait a little bit more before she starts to raise rates again. angie: you are seeing pressure on the yuan. how much pressure does this put on the pboc? anemic,t data has been at best. they have said -- people are waiting to see if the pboc stimulus will affect the market.
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angie: what kind of stimulus, monetary or fiscal? hold on to that thought. >> egypt is sending a summer into search for the egyptair black box recorder. scenariosent said all remain open. the flight crashed into the sea on thursday en route from paris to cairo. the verdict is expected later today in the trial of the baltimore police officer charged in the death of freddie gray. he is accused of assault, neglect, and reckless endangerment. india remains in the grip of a record heatwave which images
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topping 51 degrees celsius at times. the monsoon is expected to bring cooler temperatures. powered by over 2400 journalists, this is bloomberg news. next, anying up excuse. we will take a look at the strange reason some chinese companies are giving for not paying back their debt. this is "asia edge."
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angie: default there on the rise in china and so was the litany of unusual excuses. tom mackenzie has been taking a look at this. excuses, excuses, excuses. >> creative excuses.
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angie: this is an initialized official stance. >> it has been part of chinese bureaucracy for decades. examples of a cement cannot make said we the payments. a utility company saying, our manager has gone off so we cannot do anything about it. likeave examples of things assets being shuffled around on balance sheets. managers who go disappearing sometimes. investors concern. a chairman disappeared in
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december. this is pushing up concerns. onshoref in chinese bonds. these kinds of concerns, strange excuses point to chaos and some of the management. -- in some of the management. there has been a selloff. in april, a selloff in high-yield debt. a lot of concern around this. needed more transparency more protection for foreign investors. the regulators have been looking at the underwriters and there are question marks as well. angie: i get why you need a chop in ancient china. it is the 21st century.
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thank you so much for that. we're looking forward to the afternoon in tokyo. we will get the latest on japan's reopening. you are watching "asia edge." ♪
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the g-7 meeting exposed tension on currency intervention. stocks at in chinese a seven-month low. oil is falling for a short -- for a fourth day as a ron continues to boost exports -- iran continues to boost exports.
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brent for july delivery's around london. president obama is in vietnam as he starts a week long asia trip. sources say boeing is preparing to announce a multibillion dollar order from vietjet during obama's visit. u.s.-vietnam ties should not compromise regional stability. those of the headlines from bloomberg news. let's get the latest in the markets. not a lot of conviction when it comes to the start of the trading week in asia. most asian currencies also up. markets waiting and seeing. to give some sort of certainty of whether june is a potential month for a rate hike.
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this is what we are seeing, a lot of green across the board right now. taiwan is up over 2%. the nikkei is down by over 1%. a stronger yen coming into play as well. something good gains from jakarta. weakness when it comes to energy shares weighing down new zealand. we are seeing another day of gains and it comes to stocks in hong kong, really driven by gains in financials. this is how we are looking in terms of the yen. trading -- the yen is looking like this after
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g-7 ministers failed to reach any accord over the weekend. a little bit of strength despite that miss when it comes to export numbers. this is how we are looking in asia. we do have oil looking a little bit weaker. former pboc advisor says china may miss an historic opportunity if it does not invest in more infrastructure. it is the best way to boost growth and will not undermines efforts to overhaul the economy. stephen: the old recipe for kickstarting growth in china. when other measures are not working, throw money at roads, railways, bridges, airports, and the like. easily done with fiscal stimulus packages.
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a former advisor to the pboc, influential senior research fellow, he says the timing is right for more infrastructure spending because of a number of reasons. he cited the global financial -- global economic downturn. he talked about the falling commodity prices, low interest rates in general, and also overcapacity in china and this kind of spending on roads and the like could help with some of that excess capacity in key industries. critics, they would point to this perhaps exacerbating the credit bubble we have seen in china. china responded to the global financial crisis in 2009. they unleashed $4 trillion in the economic package.
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he says the risks are worth it at this time. surely he is not saying china is immune to a financial crisis. crisis? what crisis? is unlikely right now to experience a financial crisis as long as we do not see a real return or worsening capital flows. late last year, we had estimated $1 trillion of capital flight to policy miscommunication and lack of confidence on the renminbi. you saw authorities really talk up the renminbi in march. risk in thebiggest banking sector. if there is a significant rise
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in nonperforming loans, bank will be -- banks will be more reluctant to lend. companies will be reluctant to borrow and that could cause things to grind to a halt. angie: thank you. china's third-highest official has warned the people of hong kong to avoid rocking the boat. protests are not helping the cause. it seems the boat may already be rocking. and not in a good way. juliette: a few signs of leaking. we do have a series of charts showing some of the challenges the hong kong economy is facing. he is the least popular leader since 1997. this is according to a hong kong
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university public opinion poll. level ofding at a about 40 on a scale of 0-100. we are seeing a weakness coming through in hong kong retail sales. also in the property sector as well. we do have some measurable metrics showing this. retail sales have been declining. backchart goes all the way to june 2010. -- in theen seeing march quarter of this year, retail sales down by 12%. this is due to the crackdown on anticorruption and the selling of luxury goods. it had ramifications into gdp. the economy contracted in the first three months of the year. drop we haveeepest seen in hong kong since 2011.
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property prices in hong kong are under pressure, they are down about 12% from their peak. of bankshat the number are calling for even further holds and property. goldman sachs predicting a 20% drop. a number of hong kong homeowners who currently have apartments worth less than their mortgages has soared in the first quarter. have ipo sales in hong kong down 41%. 64%.sales slumping street protests or not, the hong kong economic boat may already be rocking. angie: let's bring you live to anoint were vietnam is holding -- hanoi were vietnam is holding
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a welcoming ceremony for president barack obama. he is standing there with the official greeting from vietnam. enemies. two former someone else is looking at this visit with a little bit of apprehension and we are talking about china. china warning this visit should not disrupt regional relationships. president obama has said there will be -- there will be -- boeing with a multibillion dollar deal with vietjet. greek lawmakers have approved a fresh round of austerity measures. the prime minister secured 153 votes. opposition parties rejected most
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of the measures. euro group leaders meet tomorrow. it is considering closing its factory and will make a final decision by the middle of this year. chinese demand for jets falling due to a lack of government incentives. chinese tech firms are going online and the search for crowdfunding. we have been taking a look into this. what is this all about? crowdfunding,k of fund my dream honeymoon. these companies are not startups by any means. company willne
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make a smart home theater projector. they are backed by one of the most popular state owned television broadcasters. not exactly backyard garage. angie: why are they going to regular folks? >> it is a way to crack the u.s. market. its is a great way to do supercheap. they hope to raise $50,000. they got some good tech blogs reviewing them and they raised a couple hundred thousand and they have had hundreds of customers. angie: crowdfunding. also like guerrilla marketing. >> there is already a chinese pr
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firm specializing in helping chinese companies use these platforms. this is an opportunity for us. very open to forever -- you ever. they have hired chinese language speakers. some of the firm's on kickstarter are already tapping the chinese supply chain to produce whatever gadget. for as a problem westerner. for the chinese companies already in china, when they say they will deliver in a couple of months, they have a better experience for people on kickstarter. less delays. angie: interesting. coming up next, japanese and finance chiefs
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remain divided. the feds are no clearer on where the currency is headed. ♪
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.ngie: let's go live to hanoi vietnam is holding a welcoming ceremony for president barack obama. over the next three days, obama kicks things off ahead of the g7 leaders summit in tokyo. here is regarded a very significant trip, a visit between two former enemies, now friends. es hisent obama seizes pivot to asia as very important. as china conflicts with vietnam
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over the south china sea. china warns that this visit between the u.s. and vietnam should not disturb regional relationships. obama in hanoi as he is being greeted by vietnam's prime minister. minister wasprime replaced by a much more hardliner. this is regarded as a very important meeting. now -- now going into the presidential palace. how integral --
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>> for japan, it is also important they have the backing of the u.s. -- they wantthat to make sure for future economic policies. >> how significant do you think this agreement is between japan and the u.s. for the yen? >> to japan, it is more significant. whether japan will be able to get unconditional support from the u.s. that is one of the pieces they have to make sure, although they have some different opinions, they are still working to get. >> we have seen the yen strength and quite significantly --
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strengthen quite significantly. have you got any call on the yen? >> the yen should go lower. the u.s. does not agree with the path. i suspect the minister of regardless. act understand the need for a lower yen to help the economy and the restructuring to proceed. >> so we will see intervention? what is your call on the yuan? we have seen it strengthen today.
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up officials try to shore it ahead of a likely fed hike. what is your take on where the renminbi goes from here? >> i think that renminbi will follow the basket of currencies. i think in the long run, because of the long-term benefit. pressure on policymakers in china. >> yes, but if the u.s. dollar strengthens further, it helps the renminbi to become a little bit lower. ,f the u.s. dollar becomes weak we will have concern about whether the u.s. economy is strong enough. see a rerun of the
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stress we saw in january or august of last year? >> it was pretty much a surprise because of the regime change. now that people have gotten used .o it the stress will be much less. >> everyone has been talking about all of the excuses we are hearing coming out of china because of the debt market. the dog ate my corporate bond payment? >> it is a stamp, corporate's in china coming up with all of these excuses. they have $250 million worth of debt. off the principal and in
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the town, over half the population is unemployed. that is a huge concern. coal. the gdp is tied to how does the government square that kind of circle? >> the central government of china is one of the wealthiest ones. they have enough means. they are just delaying the problem. you can see they understand the need to cut production as well. supply-side management is coming. they will need to bite the bullet. angie: a lot of bullets flying, to be sure. modi takes on elon musk in the space race.
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angie: bloomberg markets middle east is coming up. we have manus cranny standing by in our dubai studio. >> we have the chief economist for deutsche bank. what does he think of vision 2030? we will talk about that. we will talk about the latest take on the imf report on the region. we go live to turkey, angela merkel is there for the fifth time in a number of months. what is going on with the political, currency outlook? we have the latest from egypt, the president has spoken and the tourism minister is sounding resilient. a cracking show for you.
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we touch on oil, global volatility, and what it means for the markets on a global stage as well as here on a domestic regional area issue. back to you in hong kong. angie: we will be watching. you do not want to miss our exclusive interview with morgan stanley chairman and ceo. live from the china summit. india has successfully launched a scale model of a reusable spacecraft. this is a project that could the nation against space race billionaires. thank you for joining us. does this change india's economy? stage, i would say
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the successful launch of this mini-space shuttle is a technology demonstrator. one of the distinctive features is the low cost with which this particular shuttle has been experiment hasey been successful. i would not extrapolate this to say that it would make any immediate difference to the indian economy. india could emerge as a credible -- in a numbers of applications. the economic benefits to india are for the long-term. angie: absolutely. we have seen that economic return play out under the nasa program that has punt innovations -- that has spawned innovation.
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india is only spending a fraction of what nasa spends. how much impact can it have? >> that is a distinctive feature. if you look at the nasa program as the benchmark, the cost is about a 10th. this particular experiment cost a little under $15 million. at the comparable figures for the other countries , thehave preceded india united states, russia, france, japan, china, you do observe that what india brings to the table is the ability to get a
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much higher return in terms of the domain, capacity, or capability. i think as we go ahead over the next decade, india will be able to position itself appropriately. there is going to be an enormous benefit for india and a number of countries who would like to take advantage of the low cost option india provides. there are a number of applications where a credible capability in terms of space launches could have a number of dividends. at the end of the day, the way in which it will impact the agenda --onomic angie: we are counting down, absolutely watching india closely. thank you so much for that.
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joining us from new delhi via skype. that is it for us on this edition of "asia edge." we have bloomberg markets middle
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♪ manus: who crude drops for a fourth day has canada resumes working fire-damaged alberta and iran refuses to join any production degrees. rishaad: adjusting to lower prices. we will discuss the energy future. manus: a summary enjoys the hunt for egyptair flight recorders.

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