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tv   Charlie Rose  Bloomberg  May 30, 2016 10:00pm-11:01pm EDT

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china's agent a group buys a stake. mightaland said it offload its entire virgin australia stake. economic data coming out of australia. we just put a bit of flame under the aussie here. david: we typically do see the aussie react more than most other currencies. 7227. taking it back above 72 u.s.
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cents. data of course. this was down to the building approvals which unexpectedly rose month-to-month. we can reverse some of the losses toward midmorning. we are back above the 111 handle here for the dollar yen. at 658.eeing cny it is flat of a young to look at this with them the context of
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yesterday. that being said, have a look at japan. we are now up half a percent. gaining a bit of traction over the last 30 minutes. rishaad: paul allen has the details of this deal. i'll, what is going on here?
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>> the operator of the fourth largest airline in china is paying 159 million australian dollars for the stake in paying a hefty price for it. $.30 per share. if a 7% premium on what monday closed at. the virgin ceo held a media call a couple hours ago. here's some of what he had to say. >> this is an alliance deal which has equity. and we can get back to that. h in a has committed to supporting to whatever the outcome of the capital structure review is. >> some of the other
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shareholders are getting out. singapore airlines is reducing its stake to 20.1%. new zealand said it would like to exit its 26% stake completely. a bit of an underwhelming investment. but a healthy balance of this morning up 5.3% on today's news. going to turn now to what is going on with to cut a. .his scandal on the company heidi has some of those stories. another day, another development in this continuing saga.
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sources telling us that the company is seeing a controlling stake. tocauda -- takata's plan is stay listed. it will then selloff non-core operations. their decline -- they declined to comment on the discussions when we reached out to them. by 2.7%. it is a very strong session. its market value cut to about 320 $7 million. and global investors are about to get a double dose of chinese equities. -- the and 12 others shares have been something of a safe haven as they have outperformed the shanghai
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20%osite down more than year to date. it's still the world's worst performing market. goldman sachs sees a 70% chance of success from last month. it is a hugely busy day for economic releases around asia. one of the busiest in a year. a mixed negative picture. in april byising three tens of a percent from march, better than estimated. at a fallingng 3.5%.
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meanwhile, household spending a key driver of the economy falling by 4/10 of a percent. it really underscores the lack of confidence, the fragility of the recovery. we did hear from lawmakers yesterday. moving to south korea where we had outfit numbers out today. 2.8% down on year. we correct's board's come a corporate restructuring of shipbuilders holding demand and sentiment in south korea. we are getting readings of
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inflation and trade numbers out on wednesday. rishaad: one mdb had missed two payments on other securities as it squabbled with an investment firm that guaranteed the dead. was one mdb able to make this payment when they didn't have money to pay the interest on their two other bonds. >> it was never about the money or whether they had it or not, .t was about the dispute it was an abu dhabi foreign welfare fund that they had an issue with. it was never about the money. rishaad: then how is this scandal affecting generally the
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sentiment we are seeing on the malaysian stock market? >> i would say it's taking its toll slowly but surely. it has taken a toll on the stock market as well. some investors are definitely staying away and made the scandal. is on peoplehere come in and look, do they find value in any industry groups on the market there? >> i think for those who remain do see on malaysia, they some values in some sectors. they have mentioned consumer stocks are still at a good values. rishaad: thank you very much.
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still ahead, like chinese equities are once again in the cross hairs of direct sellers. more on that story later on. next, a look at the energy markets. this is "trending business." ♪
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>> these other stories making headlines around the world. a series of comments in baghdad have killed at least 24 people. the deadliest happened prices i bomber crashed a car into a checkpoint next to a shopping area, killing eight civilians and three soldiers. a motorcycle exploded inside the city, killing three and wounding 10.
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reports from seoul say north korea tested a medium-range rocket earlier today but it appears to have failed. south korea's joint chief of staff says the missile was fired around on. the range has about 300 thousand kilometers. there are dealt of its accuracy. and legal action against china's new theme park after snow white and captain america look-alikes were seen at the opening. disney is set to open in two weeks time. powered by over 2400 journalists in 100 50 bureaus around the
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world, this is bloomberg news. will take a look at the oil. the longest run of monthly gains in five years. reducingtractions supply at of the opec meeting in the another's. we are surging with an 85%. our next guest is well-known for pioneering the oil and gas market. he is in singapore. thank you for coming on the program. you said there is a shortage of crude in the market right now today. what's reflected in going on or doesn't mean we will have much higher oil prices looking ahead? we are going to see higher oil prices, near $60 by the end of the year.
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the near term, we have 1.6 million barrels in the market because of exactly what you mentioned. nigeria, canada. there is a lot of oil off the market which can come back quickly. but we are heading toward a balanced by the end of the year. i think the direction is already set. much in the range at the moment. we are getting this canadian oil back. ron is wrapping up production. is there a situation where we greatlyhere supply outweighs demand? isthe iranian production back out after pre-sanction levels. the reasons we didn't notice any pullback in price was
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other oil is off-line. the demand is so strong. i think most people underestimated demand. is twice as high as it was in the chinese slowdown hasn't done much. the demand growth in china, barrels.0,000 the strong supply and the u.s. is falling and lots of oil is taken off-line because of short-term accidents. at what price does she'll again make an impact? reach $50 once we .ome anywhere between 45 to 55 they're not going to gush in a million barrels per day. the we are going to see is
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dribs and drabs will start coming in. they won't be coming out in a way that would push the prices. if the prices go to an hundred dollars again, in this range of price, they will be coming in slowly in a measured way. you mentioned we will not see $90. talking to the norwegian energy minister on bloomberg the other day, he said he didn't think we would ever see $100 a barrel again. would you agree with him? >> no, i think we will see it again but not until later in 2020. the shale story is not a permanent story. this will have an impact in the markets until the mid-20 20's and after that, we are back to conventional oil.
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we based on what we know, have 10 or 12 years going from where we are and after that, i think the declines will come in and we are back to the old story of conventional oil. talk about the convention. it all sort of went wrong, didn't it? that of course is responsible for where we are partly now. you suggested the saudi's had no choice but to do that. why? >> let's say the saudi decided to stabilize the price in 2014. u.s. production would have gone in 2016.ased it would have brought in 2 million barrels a day of the u.s. production into the market.
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their choice was either to cut or $7 millionsix or let the market go. their policy was to decide size matters. for their survival, they have to be the number one most important player in the world. their point of view, i totally understand. if i were them, i would do exactly the same thing. suggesting their role is not to maximize profits but they have other regional aspirations as well. >> absolutely. they are a global player and they want to stay a global player. if you are a small producer, you are no longer a global player. they could have put themselves
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in long-term problems or they have started a strategy where oil production from the u.s. and other areas slowly come in. the market will come to balance and the policy is already working. i think it's a mistake to say the policy has failed. we are seeing a rebalance in the market. rishaad: we have the opec meeting. the new oil minister will be there. tell us what you know about him and how does his vision differ ?rom the one before him is it still was the royal family desires? >> the minister will execute the vision of the royal family. they will articulate the
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policies but i think there will be absolutely no change. he was handpicked by the former minister to become the head. it will all be the same policy, and maybe a different approach but the conclusions are the same. the policy will continue as is and it's almost impossible to assume the change in the direction right now. nothing expected out of this meeting. what about the new head of opec, the importance of that?
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they meet twice a year so this is the time they meet in there is nothing to say really. they will talk about the freeze again. the arabians last time disagreed. the iranian production is almost at the same level as before so the iranians can freeze but they don't want to tie their own hands. they can increase production by a million barrels a day. they will just talk a bit and say goodbye and go home. rishaad: thank you for joining us. coming up, unfinished business. our exclusive interview with india's finance minister. the future of the r.b.i. governor. ♪
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him new finance minister
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--s his country is to repeat the performance is not a sign investors have lost confidence. forex -- >> i don't think that would be inaccurate analysis. ehis last year, the rupe almost kept pace with the dollar itself. there was a lot of instability that wehinese currency were also impacted. since then after the initial shocks we had, of course the rupeeth of the group -- depends on the economy and how much foreign investment we are able to get into the country itself, which has been reasonably large. and the reserve bank has been watching the situation and
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maintaining it. to maintain a balance between these levels. in which we can continue in the current export environment. rishaad: you bring up the banks. confidence in there with people having confidence in your government and the r.b.i. working together. how close is your relationship with roger and will he be reappointed in september? >> i have repeatedly said these are not areas where we comment in the media. regarded thes r.b.i. as an important institution. they have a level of dialogue. we continue to discuss all situations and decide areas that
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fall within our respective jurisdictions. rishaad: coming up, north korea's first show of strength since its ruling party may not have gone to plan. next. ♪
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-- stocksop stories higher on the day when more than 60 data points have been released across the asia-pacific. the yen has pulled back from an early search. n outputting consumer spending ahead of estimates. aussie dollar also on the up. a surprise jump in net exports at building activity, rising 3% on the month against forecasts of a followthrough percent. that includes 1.1% above gdp.
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full first-quarter gdp numbers are out wednesday. earnings shares on the up. stake, almost 20% increase over time. they own over a dozen airlines. forget, back and marc new zealand said it would sell its holdingh,. japan is closing out the morning. earlier,h pointed out japan is closing out the morning session on a very strong note, down to dollar strength against the japanese currency. let me have a look at some of these other things across the region. tokyo is very quiet, and as the morning kicks off, the news flow just comes through. names --ok at these
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the big transaction, we were talking about yesterday, these buying up telecom assets. the suspension was lifted about 30 minutes back. obvious that investors are seeing this, credit suisse raising the stock to neutral for the second straight day of gains. if you put these together, the biggest two-day gain since 2000. 16 years. a bit of a restructuring. they are focusing. hong kong, what do we have? oner on we have retail sales top of the data points rish
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pointed out earlier. we have already seen -- mcr raising. retail sales are coming up -- you want to look at the retailers individually. long story short we are expecting a 10% drop in retail sales in hong kong, should makers leading the gains over and south korea on the back of expectations of restructuring in the industry. rishaad: thanks, david. a medium-range rocket appears to have failed, the first launch attempt since the ruling congress took over. peter, what kind of missile is north korea's suspected of testing today? an intermediate ballistic missile, and the key
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point is ballistic missile, which is banned by the united nations resolution. significantvery that they would again try testing missile technology that is banned by the united nations. rishaad: right. well, how significant, and why is it so significant? because first of all, it is banned by the united nations -- the reason why it is banned is because it's a technology that can be developed in a way that a nuclear warhead could fit on it. and an intermediate ballistic missile has arranged reaching u.s. territories, particularly japan and guam. the analysts estimate that at a range of 3000 kilometers, which is about 1800 miles, it is within range of guam, where the
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u.s. has a significant military presence. rishaad: ok. the thing is, sanctions have been toughened up. there's not surely any way of toughening them -- what else could they do? that is what gives north korea license to keep on testing, because they think it can't get worse. >> yes, and again, it is surprising that they continue to test and go against the human considering u.n.-u.s.-european union, keep tightening the sanctions. the key point is that their biggest trade partner is china. yet well china says they support these sanctions, the question is whether they can tighten them as others have. 80% ofcall, it's about north korea's trade with china.
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does something to tighten sanctions, north korea will continue to build up nuclear technology. peter, thank you so much for joining us. a botched missile test. but have a look at the other stories -- an aircraft leasing company says their ipo is nearly 40 times oversubscribed and is due to debut wednesday after more than a billion dollars in initial offering. land rover going in the fast lane, profit tripling thanks to the luxury brand in europe. they say they are cautiously optimistic about global growth as deliveries in china take up.
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the dakota airbags scandal -- more and about 1000 they have put aside what hundred million dollars for repairs. we have been reporting on tata motors. shares are down by more than 1%. it is 17% below analyst expectations. competing for an italian car designer. let's have a look at the chinese stocks. they are facing another milestone in the u.s. today, 13 of them including alibaba and baidu could be added to the msci indices. let's see how much of a catalyst this will be. >> they have been waiting for this. take us back six months ago when these stocks, technologies and
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mscices companies, the index is 153 companies. we are talking about 13 companies, half of their free flow was added to the msci indices, the key tracking ones, six months ago. this is what i have done since then. they have out the benchmark shanghai composite index, and even i haven't performed that well they are down by about 8% or so. the 13 companies that will be fully added at the end of the market close tuesday in the united states, they fared better, down about 5% or so. this will give u.s. investors more exposure and broaden the base that they otherwise might not go in. rishaad: how much will this be, given the fact that -- >> they are down. rishaad: exactly.
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>> we have had a turbulent time over the last six months with sentiment of the chinese slowdown, and that is what the chief executive of his visit products said. u.s. investors are giving them a low valuation because of the china risk. the hope is, he says, that the full inclusion after tonight's close hopefully will give global investors the idea to buy them as part of the mandate. monthd also add that next there will likely be a decision on whether it will include domestic shares. goldman was just out with a note today, saying there's a 70% chance -- rishaad: it was 50-50. >> a month ago. basically there were five criteria outlined, on issues that needed to be resolved. china addressed a few of them,
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including the issue of the trading halt. companies still halted. there's one month for certain requirements in three months for others, but they have to have a good reason to do it, not just because they don't want negativity. so also some foreign funded conclusions and other issues drink the result. rishaad: thanks for the. we'll keep with the chinese equities, because they are a gain in short-sellers. mainland stocks surged this months at levels not seen since last year. here's haidi. here we go again. haidi: it could be going that way, if you look at investors looking to gain short is not that easy .
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shortselling has been claimed down since last year's rout. in ftse itest has searched, fiv5%. the last time we saw anything even close to this level of bearishness, back in july and august last year, they proved to be well-founded, because the bull market turned into that cello. pessimism?ving the chinese shares haven't seen that kind of volatility, but it has been fairly stable. thursday, it has been trading sideways all month, and most analysts suspect there will be state intervention ahead of the decision on chinese indices. in the meantime, you can see that the storm clouds may be starting to gather. take a look at this -- goldman says the sweet spot the yuan has been sitting in, this is coming
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to an end. it is warming of renewed outflows and is down 1.8%. this is the biggest appreciation since one month. lows close to a five-year over the past couple sessions. it is going to be exacerbated going or word with the likelihood of more fed rate hikes. that is why we see the pboc lows,g that to five-year to get ahead of the fed and take the pressure off. ubs says this bearishness is anticipation of the fed, saying that investors are likely hedging positions with these funds to go short on china because the murky outlook. south china financial holdings in the meantime say investments are also betting on steeper declines for asia.
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given this renewed focus we have seen, it is pretty interesting that we have gotten a little bit of provocation when it comes to how this daily fixing is set. this is a unit of the country's biggest financial:. they sitealed that down and take into account the overlap movement, the previous days quote, then they said that speech to try and shake of market manipulation. apparently they also get rid of the highest and lowest quotes. pboc has been saying this earlier, that they want to increase flexibility, but analysts haven't been focusing -- img has been saying that it is still a blast box. some stopped caring about the fix. rishaad: right. coming up, india's financial
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minister on the future of the economy. more from our exclusive interview, next. ♪
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>> 10:45 in hong kong. the stories making headlines around the world. lawmakers in cambodia have been allowed to petition the king about what they claim is government intimidation. police prevented protesters were marching to the palace, but allow them to avoid potential violence. critics say the prime minister is stepping up on the opposition ahead of elections in 2018. social media has been ordered to use the official title. canada's biggest energy company, suncor, has restarted operations near fort mcmurray. they lifted the last mandatory
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evacuation orders and production begin again. they say thousands of employees are back, with the number to double in the coming weeks. it forced about 80,000 people to leave fort mcmurray. and china has upgraded its mapping system, putting a second satellite into orbit. it was carried into space by a long rocket and will join a network of satellites helping urban and rural planning, land surveys, disaster response, and environmental protection. due to be launched by the end of the decade. this is bloomberg news. india's finance minister says he has every confidence in the reforms proposed by the government of narendra modi. us, heg exclusively to
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said the overhaul of the economy has changed the way investors regarded deal. he also stressed that more changes are underway. >> if you look at the performance of the government over the last two years, i think we took over at a stage where the rest of the world had almost started disregarding india. the government started with an image that india entered into a policy paralysis, but fortunately we had a sizable majority in the election. decision-making has become easier. over the last two years we have consistently moved in one direction, step after step, and they have been serious steps, opening up markets, rationalizing taxation, having a more nondiscriminatory system of resource allocation, making
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entries into business is easier, making exits out of business easier. you -- i have a little bit of the unfinished agenda of the reform process, which is still pending. bringinge still are around the direct tax, the corporate tax, down from 30% while phasing out the exemptions. this will be completed over the next few years, because we don't want to pay for revenue shocks. we have the major indirect tax reform, which i hope to clear very soon, the goods and services tax. we have some changes to company law in the pipeline. the health of the banking system, we started a program in more than one way of preparing that situation. i think once that is done, there are three big priorities.
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namely, spending a lot on infrastructure and bridging as far as possible into the infrastructure deficit that exist in india. secondly, a lot of expenditure would be diverted toward the rural areas over the next few years, considering the kind of distress that exists in those areas. thirdly, i think the government has taken several steps for creating a larger framework for social security. these are the initial steps to have taken and i think we intend to go on that roadmap. --haad: my final question it's to do with what you said about injury, as foreign investors. let's take an example of apple. 20% of their phones should be made indigenously in india; they are allowed to open their own stores there. do you agree with that? does not raise the barrier very high for a company like that?
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is -- unless it is changed, this is a pre-existing policy that is already exist for the past several years. the policy has been that if you have the single brand stores, you must have some local sourcing. the rationale behind this has been that every person who looks at the indian market must also invest in the direction of creating some employment opportunities in india. logically, it is a very national policy. in case of a stray product here or there, it would seem a little odd, but there is a sound rationale. but when you are looking to invest and capture one system because of a large market and a large middle class, products of this kind -- please help us in creating some job opportunities in those countries as far as
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manufacturing is concerned. the old rationale the policy, unless the policy continues to exist. rishaad: will you change it, yes or no? >> no. i can't make that comment. but they have represented to us and we will examine the matter in cases where there is a very high technology ball. we want to carve out an exception and we are open to look at it, but i can tell you that the original policy considering the restraints of the economy, had a rationale about it. in any economy, it would be rational. rishaad: the indian finance minister. still ahead, hold on tight, we will be burning rubber in beijing with a special report on china's growing car culture, next. ♪
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rishaad: china's economic development could easily be described as fast and furious, and that is due to a car driven. atbuckled up and took a ride a soon to be lifted beijing auto racing circuit.
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hero track day, anyone can come out and spend 1200 room and 0 renminbi to have fun at the track. beijing's gold port is what china's emerging car culture on a new track, offering an alternative to dragracing on the street. we obtained this video of teenagers being busted by the police after illegal midnight racing in an underground parking lot. >> basically we are just giving them what they want. they want to go somewhere to drive fast. to push the cars to the limit. a property developer is accelerating into a more asset light licensing model. they're franchising racetracks and auto clubs nationwide. seven are already built with
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more on the way. >> we are growing at 40% or 50% to year, with so many cars being sold in china. they spend money, and they buy cars, and they spend money on the track. >> not all girls here are along for the ride. 127-year-old estimates she has spent upwards of $30,000 on gas, tires, and tricking out her niecssan. >> it's still pretty rare here
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in china. >> it's cool. [laughter] >> the smoke, it's like a big show. >> never mind that she studied finance in college. she was to be a professional drifter. you are racing against guys? >> all guys. >> girl power. >> [laughter] rishaad: that's it for us. stay with us for "asia edge." we'll talk to virgin australia's chief executive. ♪
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>> it's the middle of the asian trading day, a live, beautiful look of hong kong. stocks, little changed, poised for the biggest monthly drop in january. we are live in hong kong. this is "asia edge." top stories this hour. oil is heading for its longest set of monthly gains in five years, driven higher by the output disruption in nigeria and canada. it's a mixed picture in japan
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with industrial production and job numbers. production fell more than expected on a weak export market. and a bit short in china. the last bearish bets were so high, that bull markets turned into a $5 trillion rout.; also, version australia chairs take off as they take the stage. it would take a look at why the billionaire founder is on a global buying spree. and i am keeping my eye on what's happening with your money this tuesday. it's the last trading day of may, and despite what will be a monthly loss, it is shaping up fairly decent, a fighting chance, across asia-pacific, especially midday. the markets that are lower are off the bottom. what do we have? china is the outperforming market -- 2%. shanghai composite, other


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