Skip to main content

tv   Asia Edge  Bloomberg  May 29, 2016 10:00pm-11:01pm EDT

10:00 pm
gold is declining for its longest losing streak in more than a year. janet yellen is not naming a date. follow me on twitter. my handle is @rishaad. let's tell you about what is going on. it has been a mixed bag. despite the rally we saw on wall let's have a look at the board. juliette: we are seeing some good gains from japan, and hong kong has turned positive by .1$. -- .1%. we are seeing weakness on the regional index due to the
10:01 pm
a-share market in shanghai. we saw transit companies under pressure on friday. we are seeing export company sold off today as well. .2%. down doing better than the morning session, but it is a solid session in japan, up .8% as we see the yen weaken against the dollar on reports that shinzo may beales tax raise delayed. australia, pretty flat with a mixed bag in terms of commodities. the philippines up .6%. we have been watching these up .7%n the telco space, on the open. having a look at the offshore renminbi in terms of currency, the pboc has weakened the yuan
10:02 pm
fixation to its lowest level since february 2011. we can see a little weakness in the offshore renminbi, down by .2%. the weakness coming through in the yen as well. japanese equity is holding at its lowest level in a month. elsewhere, we are seeing the won and emerging-market currencies being sold off against the dollar. this is playing into the kospi, but really a story of dollar strength. the market is trying to figure out the rate hike. rishaad: noble group is making headlines. nda amin.ng in hasli
10:03 pm
this is a little surprise, certainly. haslinda: well, yes. it caught everybody by surprise. according to a statement this morning, alireza decided the time was right for him to move on. noble says he will be replaced by william rendell and jeff frame. the founder will continue in his role as chairman of the company. reza'sacknowledged ali contribution moving the company model.sset-light he played a pivotal role in the sale of its agricultural unit. has beenays alireza crucial in securing the recently announced refinancing. but it has been tough for the company and challenging for ali reza. in an interview with me last
10:04 pm
month, he was realistic in what still needs doing at noble. >> the markets are difficult. to sit here with confidence and say the worst is behind us is not realistic. our jobs are to come in everyday , do our jobs, focus on the business, and the markets will judge us by those results. haslinda: separately, noble will stop the sale process of some of its u.s. operations after profit collapsed. this is asia's largest commodities trader. it has been under attack for accounting practices that has led to a massive selloff of shares. , 20% or so this year. they were removed from singapore's blue-chip index. the credit rating has been cut recently, itnd
10:05 pm
sees a weakening debt maturity profile. rishaad: thank you, has. we're looking at sales in japan. retail sales growth stalling, adding to the case for shinzo abe to delay a sales tax increase slated for next year. stimulusroposed a package for a shot in the arm. not as bad as expected, but flat growth is not great. yvonne: flat growth is considered a beat, but it shows how private consumption is showing weakness. sales unchanged in april from the previous month. that is better than the .6% drop, but seeing it down from the 1.5% revised number in march. more downsides for the on your figures. sales fell .8%. those rebound, but we
10:06 pm
have continued downward pressure. leaders there was significant risk to the world economy, the lehman shock, which has fueled speculation abe will announce a delay in the levee hike. that thrust japan into recession in 2014, and the economy has suffered from contraction. abe says japan has no other options and has delayed a hike to sustain recovery. the government may hold off for as much as 2.5 years. this is likely to trigger a general election and put the plan of public. parliament may have to be dissolved if the sales tax hike is delayed again. to unveil aeady stimulus package, this one up to dollars.ion
10:07 pm
expect more turbulence in the summer election. rishaad: let's look at a state owned enterprising china looking to raise money. let's find out about that story and some of the others we are covering. like crrc is on track for a $1.8 million share sale. they are china's only maker of are ready trains and to sell shares valued at a 4.8% discount to the last close. crrc plans to buy 692 million shares. crrc was created last year when the government merged csr and cnr. it is one of 10 focus industries highlighted as part of the nation's push to becoming an advanced industrial nation.
10:08 pm
shares of pldt on the rise in the philippines. that is on the back of news that the philippines'biggest company, miguel will sell to pldt in a deal worth $12.5 billion. pldt says the deal will speed up network construction. airasia on the rise after tony fernandez said the company received an offer for its aircraft leasing unit. said the approach of aviation capital must be discussed at the board. >> it is like our core business. airasia and expedia have had joint offers.
10:09 pm
we are not putting in management -- now putting in management. we have done our first lease to pia. we have many offers because our aircraft are well-maintained. airasia started the leasing company in 2014 and intends to sell it at some point. fernandez would not give more details. rishaad: we will be joined in the studio by some of hong kong's brightest young brains hoping to become the business leaders of tomorrow. we will be discussing this week's opec meeting. this is bloomberg. ♪
10:10 pm
10:11 pm
an update on what is going on with crude on the way u
10:12 pm
p and the all-important opec meeting taking place in vienna. let's bring in wayne gordon, director of commodities at ubs. there was so much hope going into the meeting, and nothing came out of it. theas quite rancorous by end. expectations for a production freeze have been patted down, haven't they? >> we do not think, from this meeting will come much result. wells ins whether the the u.s. will start to be explored and produce. we are likely to see a pickup in u.s. oil production. consequently, prices will start to come down. doesnot believe the price
10:13 pm
not have any risk coming out of the meeting. it is about production decline, more than anything else. , weaad: as to the oil price hit just about $50 for the first time in three months last week. we are locked in this range. looking at the fundamentals, it would seem it is justified. >> from the outages perspective, yes. we have seen greater balance in the oil market in the last couple months. ,hese were broadly unexpected given the political nature and the structural nature of some of these. nonetheless, we expect those outages to fade away over the next couple of months. it probably shift downwards towards $40 a barrel before it hits $50 -- $55 a
10:14 pm
barrel. mind, whenth that in you're looking at equities in some of these oil majors -- >> some of the oil majors are well priced. an implied oilg price of around $65 a barrel. look at some of the smaller names in the u.s., some of the shale producers. they are trading around $55 a barrel, implied. the equity market has pretty much traded this. if you downside the oil price, we think there is a stepback in the oil equity space. rishaad: is it better to be upstream or downstream, or essentially one of these big oil majors that has the bases covered? >> at the moment, we like the
10:15 pm
majors and some of the better capitalized mid-cap names because their balance sheets are in the process of being repaired. they are likely to give up dividends. there are reasons for investors to hold. if you look at the 12 month horizon, even if we see a bit of the product -- downside in second half, we are looking at a structurally tighter market going forward because the amount of expenditure that has come out. this is not 2015, when we had cap-ex to come off the table. cap-ex seen continued cuts across the board. yes, we may see a little downside to some of these nexties, but after the stepback, we think it starts to find a base and move higher on a 12 month basis.
10:16 pm
so if you are owning equities, better to buy and hold at the moment. rishaad: let's look at what is happening with tehran, these tensions building up. saudi arabia being told they will be boycotted this year. this relationship has become more fractured. is it playing out when it comes to what is happening with crude? >> i think it is probably more downside than upside, currently. , and rightly so, seem to have reentered the global market with the idea to produce and export as much as possible. it flows back into their economy and begins to boost domestic investment.
10:17 pm
they are playing the strategy as they should. we have been out of the market for a long time. we want to capitalize on being back in the market. one of the upsides from iran reentering the global market is what happens if the arrangements they now have with the u.s. and other countries start to look little bit more tenuous. if that was the case, you would see a lot of upside. at the moment, it looks like iran is going to export more. consequently, that will have a depressive impact on the price short-term. rishaad: wayne gordon, great talking to you. getting you to this new conference in the philippines, the pldt. they will be buying a telecoms division of san miguel, who agreed to sell that asset to pldt. a little overorth
10:18 pm
one billion u.s. dollars. this is a deal which is being signed as we speak. pldt's shareholders are cheering on the purchase. the share price is up 5.9%. is just coming through, these pictures taking place in manila. let's have a look at some of the headlines around the world. debatereasingly bitter about britain and europe is threatening to split the conservative party. proponents of brexit have accused david cameron of breaking promises on immigration. cameron must says his plan to cut immigration has failed.
10:19 pm
relations between iran and saudi arabia worsening with tehran boycotting this year. paid -- stampede caused a rivalry deepened since iran's nuclear deal with the west. fifa president described his proposed salary as "insulting," according to world football. infantino was offered $2 million a year. he did not accept the proposal. 150 bureaus around the world with about 2400 journalists, this is bloomberg. today,lling further
10:20 pm
extending its losing streak to nine sessions. why? details next. ♪
10:21 pm
10:22 pm
♪ you are watching "trending business." speculation is mounting about an imminent rate rise after comments from janet yellen. teve thinks global markets are prepared for an interest rate hike. he is mildly encouraged about revised gdp numbers in the u.s. was asked about timing, but declined to bite. janet yellen said the rise would
10:23 pm
be appropriate in the foreseeable future, but declined to name a date. we have investors digesting all this. >> everyone wants to know if it will be june or if it is not going to be june. index, the dollar-spot strengthened against all its major peers after the comment. 1:30, as they made the comments, the dollar really spiked. they basically said there was weak growth in the u.s. in the first quarter. it does appear to be picking up. if it continues this way, it is appropriate for the fed to gradually increase rates over time. we look at a slightly longer period of time. to levels did jump up sinceen some march -- march 25, and the comments were
10:24 pm
made in answer to the host. he had not been expected to comment on said policy at all during the event. we saw the dollar react quickly to what she said. ,edge funds and money managers versus eight major peers, what everyone wants to know, is it going to be june? is pressure increasing? is speculation increasing after the april meeting's minutes? bollard wants to know what would happen in june. ,ellen did not giveaway details but if rates are increased, it would only be the seventh time -- second time after seven years of near zero borrowing. contracts were worth 32% after yellen's comments, compared to 38% earlier in the day.
10:25 pm
let's look at gold. gold futures, there is some steam coming off as the prospect makes precious metals less appealing. lost 2.9% lastly week, the biggest fall since november 6. investors were starting to pile of a little since the end april as it looks like the u.s. economy is doing a little better, on stronger footing. that is how it looks now for gold. janet yellen will speak publicly in philadelphia and monday. -- a next monday. she may or may not give more details. rishaad: banks are said to be close to arrange funding for a buy of monsanto with $40 billion
10:26 pm
in financing. monsanto rejected an initial 62 billion dollar offer from bayer. funding negotiations continue. division of india's biggest drugmaker regarded that someone is seeking document's related to the sale and corporate records. pharma does not expect an inquiry to have adverse effects on results. division 2030 will introduce an unprecedented shakeup of a country that looks to a future beyond oil. citigroup says it offers a huge opportunity on everything from loans to ipo's.
10:27 pm
saudi arabia will privatize several companies, including one worth as much as $2 trillion. still ahead, the risk of a chain reaction. we have details coming up next. ♪
10:28 pm
10:29 pm
♪ our top a look at stories, japanese shares driving grains as talks of a fed rise are encouraging signs. the senses global markets are well prepared for a rate increase. meanwhile, gold down for a ninth straight session. philippine long and global telecom making strong agreed to byhey san miguel's telecom business,
10:30 pm
allowing significant improvements in internet and data services. airasia says the company had received an offer of $1 billion for its aircraft leasing unit. speaking to bloomberg, the must be discussed with the board. a positive morning session in japan. we are seeing a bit of a turnaround as well for equities in this part of the world. is thanks to that positive lead from the nikkei 225, up by almost 1% as we continue to see the yen weekend, further reports the sales tax will be delayed until 2019, so a solid boost coming through. hong kong also doing ok after a shaky start, up by a third of
10:31 pm
1%. china on the a share was down on the open, flat at the moment, a better turnaround there, and most of the markets in southeast asia ok. , the new pretty flat zealand market up by a third of 1%. deal and the philippines driving shares in that space. 6.3%ne long-distance up by miguel long-distance purchase. a good pickup in that space there. elsewhere, mobile group on a change at the top, under pressure in singapore. we are seeing old players coming
10:32 pm
under pressure, regis resources down 4%, gold has fallen for a fourth consecutive session. , home dollar weaker today prices in australia fall by 4.7% in april, compared to the previous month. some signs of a cool down in that housing market that has been overheated. we are seeing weakness and emerging-market currencies led by the korean won. usn u.k. markets closed monday for memorial day, but the market all about when are we going to see that rate hike falling the yellen comments on friday. rishaad: getting more warning signs with wealth management products in focus. have mushroomed to a third of the value of gdp. they are cross investing in each other on top of other shaky assets as well.
10:33 pm
steve was having a look at this earlier. >> these are echoes of what 2008.ed in th some would say this is a ticking time bomb for the banking system in china because of the size of the wealth management products. seeking higher returns turn to these wealth management products in china, where it has mushroomed. aboutyears ago, it was 7.1 trillion yuan, now 23.5 trillion. that is a third of gdp, 35%. rishaad: what makes the alarm bells go off is that this is not a zero-sum game. these are invested in each other and they are layered. these underlying assets are
10:34 pm
already shaky. because there are fewer quality investable assets and china has the economy gets worse, you're finding these wealth management products increasing. a small proportion, but they are investing in each other. you're getting layer stacked on top of shaky single underlying assets. so that is why it is so worrisome. individuals put their money into the wealth management products, and they are supposedly investing into the corporate bond market, equities, and derivatives, but we don't have any transparency because the banks have offered these wealth management products and liabilities are off balance sheets. does this remind you of 2008? rishaad: not just wrong echoes,
10:35 pm
but very strong. what about goldman sachs out with this call? >> that is the value of the yuan , goldman sachs saying the sweet spot for the yuan is basically ending. the sweet spot meaning because the fed paused on hiking rates, the yuan got a little reprieve. it stabilize versus the dollar. it weakened against the japanese yen and other trading partners, but against the dollar, it stabilize. going to hike is most people predicted will, the yuan outflows could accelerate. confidenceundermine and basically make it more expensive for chinese corporate's under pressure to repay their dollar debt. we could have more default, and that is a worry. rishaad: some of the other stories we are following, china
10:36 pm
stock exchange introducing new rules to restrict trading halts and increased chances of msci inclusion. early this year, msci said inclusion would depend on trading changes being implemented so this could not happen again. terex ending talks, saying it disagrees with the offered price. the decision clearing the way for a rival which had offered to buy the unit for $1.3 billion. the finnish company says it will go ahead with the deal as planned. al india missing estimates. it produced a record amount during the quarter, but did cut back on output and liberties -- deliveries last month. shares have dropped 15% this year. on a fee tocounting
10:37 pm
offset returns. the policy could array something like $365 million from revenue this year. 11%cting profit the fall of , down to lower returns. we will be looking at that one as well. gaining after and on top of a 13% surge on friday. sixfold.e jumping fr benefiting from the oil price plunge and is hedging for 2017. >> oil is always a temporary and reliever -- pain reliever. sailed win with oil price being where it is. we are hedged at 70% and are hedging for next year up to 30%. we have hit the 50 ringgit
10:38 pm
market, so we are comfortable maintaining margins. has been aggressive in cutting capacity to deal with fluctuations in demand. are you saying now you are ready to expand? has the time come? -- we had a little bit of foresight in cut capacity over the past two years. we have minimal capacity for the rest of this year, but our new aircraft comes in in august, and that has an extra six seats, so little capacity growth there. next year, we look to add 8-9 planes, and that will get us to a steady-state again. >> you are making headway into the leasing part of the business. how much of value added do you see coming through from that segment? >> this is something many analysts have not seen.
10:39 pm
asset for youdous because we own our aircraft. service, andnger ancillary income business, and now we have a private equity business. within there, we have set up our own leasing company. we have had an offer from someone to buy it, and i think this is a very powerful cash generator. at some point, we will divest in this asset, so there is tremendous value and cash accretion there. has the china slowdown story played out for you? there has been strength despite weakness in the currency and people spending less. are they going to these destinations you cater to? in some ways, we are always a beneficiary of slowdown. our chinese traffic was up 37%. see no sign of the
10:40 pm
slowdown. people take shorter trips and go closer by, so are not seeing any slowdown and are continuing our expansion into china. we are feeling quite bullish on china. coming up, has disney met its match? the theme park rivalry heating up in china. first resort to take on the u.s. entertainment giant. ♪
10:41 pm
10:42 pm
it's 10:43 a.m. in manila, and this is a look at some of the stories making headlines. the philippine congress will officially declare the new president of the landslide winner. claiming more than 16.6 million votes.
10:43 pm
united nations says more than 700 migrants fear dead in shipwrecks in the past week here at thousands of other saved by coast guard and other ships. the number appears to be the worst since april of last year as calm spring weather encourages more people to attempt the crossing from north africa to europe. 100 people are thought to have drowned last wednesday, the incident captured on camera by the italian navy. room on theable international space station successfully inflated. error was pumped in over three they will wait a week before entering. to the remain attached
10:44 pm
international space station for two years. could lead to future habitats for space tourists or mars explorers. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. right, a chinese billionaire has opened his first theme park and fired a shot across the bow of his knee along the way. tourism and entertainment is growing in china as people spend more on having fun. there is a lot at stake here. can wonder really challenge disney? wanda really challenge disney? taking on the biggest entertainment company of them all, disney. the chairman coming out with spicy language.
10:45 pm
park over the weekend and basically teed it is up as a cultural class between chinese culture and western culture. take a listen to what he had to say. >> chinese culture led the world for 2000 years, but for the last 300 years, because of a lack of development and the invasion of foreign ideas, we have lost confidence in our own heritage and have depended on foreign culture. tom: the chairman speaking there. aboutstingly, he talked western culture. there were hints of western city,e at his park, wanda photos of characters that looked similar to characters like snow white and the stormtroopers from star wars, even character chairs -- character chairs he has been aggressive in his
10:46 pm
language and expansion plans as well, wanting to open 15 resorts across china. he thinks he can take on disney by undercutting them on price. one of the most famous and recognizable film stars in the world says not enough asian actors when roles in hollywood. she says asian movies must work harder to generate ticket sales and audience appeal. >> not going to happen overnight. 16 years ago, when crouching tiger, hidden dragon came out, they said you should do it in english because in america nobody will go see the movie. why? because they can't watch the movie and read subtitles. it is not going to happen. ,he sequel was made in english but for different reasons. at that point, if you keep
10:47 pm
giving the audience what they want, then you will be stuck with a stereotypical movie over and over again. is also a responsibility on our part, but we also have to treat it like a business. we can't keep making movies that nobody goes to the cinema to watch >>. >>do you think china will relax some censorship issues? homosexuality is taboo, supernatural films with ghosts, the list is long, so you end up making the same kind of movie. >> no, you don't end up making the same kind of movie. playground, in a you have to play by the rules of that playground. otherwise, you have to go somewhere else. if you want to play here, at the moment, they are relaxing a lot, but they are clear. -- if they find some think disagreeable, they will
10:48 pm
tell you why and how you can rectify it. f that is the case, it is not hard. rishaad: the issue of the bamboo ceiling has come up again in hollywood. they've had the issue about no african-americans nominated in the academy awards. >> we've never had asians nominated. what i find offensive is if they have racist jokes. is it racism that scarlett johansson is playing a japanese cyborg? caucasian, you should play all the caucasian roles, european, american, or whatever it is. playwise if i could only in malaysian roles, i would not be in the industry at all, but i would not like if scarlett johansson was playing aung san suu kyi. she is a great actress, but she is not of the asian origin. >> how do you want to see it change? were therly days, you
10:49 pm
greatest action hero of all time. you use to do some of your own stunts early on. >> i still do. absolutely. i love them. that is the only time you get to do it, and a safe environment. someone just said to me, look at road safety, but what you do in the movies. whispered in my ear that you are doing a kind of harry potter-like film. >> it is called the east sea odyssey. this is my first chinese film in a long time, and about five years to -- five years. >> do you do any -- kicking in it? >> no, i just watch everyone else. actually, it's such a great complement. i don't need you to just to be
10:50 pm
fighting in my movies. i want you for your dramatic skills. coming up, the next generation of business leaders. we're speaking to young entrepreneurs about their innovative ideas, coming up next on "trending business". ♪
10:51 pm
rishaad: right, a look into the
10:52 pm
future, the next generation of business leaders at an event this week teaching young entrepreneurs how to get a head stop. our next guests were one of the teams who will pitch. let's meet the young entrepreneurs. thank you for coming in, guys. tell us about your idea. >> we started a company called viewfinder, an on line. two pyramid to ring system for high school students like us. we had a lot of difficulty collegeing our applications, deciding what to study, where to study, and how to apply, so we decided to have a mentoring system where university students can share their experiences. rishaad: what about this? what made you think of it ? who came up with the idea?
10:53 pm
>> when i went to the u.s., i found it difficult to find opinion that was from the actual student body, not the university. introducedour school alumni and gave a presentation about university. she hooked me up with one of her friends. it was actually so much more, the information she gave me was a lot more realistic and useful, so i found that if you spoke to one to one and get the real opinion about the university, it would be a lot more useful for high school students. influenceill this your choice of where you go to university? >> definitely. when you look online, the information there is by the university, so it is not the
10:54 pm
reality of what it is. you can ask students more questions and they will give you more honest opinions instead of a university perspective. rishaad: how did it work? >> we were paired together with mentors. rishaad: there were 6000 of you. >> no, 30 of us. we had 45 mentors, and coaches to teach us how to make a pitch. rishaad: what did you learn from that? >> we learned how to pitch. we learned about financials, marketing strategies, how to form a presentation, how to hustle and never give up. is, how doe thing you then take it to the next stage? let's say you get this funding and that all pans out for you. what are the next steps?
10:55 pm
>> by winning this the entrepreneurship award, we get some money from credit suisse. conference on thursday, and also we are planning to start a simple website and send e-mails out to alumni's together resources. then we can start to -- rishaad: you will start to build this up. >> yeah. rishaad: because this might do so well, you might not end up going to university, right? or will you go anyway? >> this will help us. rishaad: you might be too busy to go to college because you're doing on this. >> i think we can be the guinea pigs. go to college, we can
10:56 pm
start working as mentors for the program. rishaad: it sounds really good. thank you so much, guys. best of luck. e will the next time wil be talking about your perspective ipo's. that's it for this monday edition of trending business. stay tuned for "asia edge." this is bloomberg. ♪
10:57 pm
10:58 pm
10:59 pm
haidi: we are live in hong kong. it you are looking at a live shot of hong kong. you are watching "asia edge." the top stories this hour, singapore slumps. the ceo leaves weeks after telling bloomberg he should be judged on results. air asia is on the rise.
11:00 pm
tony fernandez revealed a multibillion offer has been revealed for the leasing unit. is weaker. retail sales have stalled. there is increasing expectation that next year's sales tax rise will be delayed. also coming up, the battle of the theme parks is on. let's get straight to the markets with juliette. jutliette: not convincing, although we are seeing a little bit of a rebound after a shaky start. we are seeing the asian market in china up by 2/10 of 1%. japan is up by 9/10 of 1%. we were hoping for a solid session across all markets in asia today on the back

35 Views

info Stream Only

Uploaded by TV Archive on