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tv   Trending Business  Bloomberg  July 6, 2016 9:00pm-10:01pm EDT

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♪ angie: it is thursday the seventh of july. this is "trending business". ♪ angie: we will be live in seoul, korea, sydney, but first, here is what we are watching. weakening.eps on happened thisit fast, investors fled. samsung is enjoying a recovery with profit beating estimates
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thanks to the demand for the galaxy smartphone. position foring ipo's and southeast asia, raising more than $1 billion in the first half. thailand was the third. you can let us know what you think by following me on twitter. don't forget to include the #♪ ♪ #trendingbusiness. singapore and taiwan have just come online. david: malaysia is closed today. singapore opening to a mixed basket. we are up a fifth of 1%. still weighed down by valor-yen. i think that is the story. we have been moving sideways since brexit. dollar-yen is the most
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important to keep in mind. we went about that ever so slightly. the dollar is weak or by a third of 1%. modest.keeping gains look at that. a few minutes before we get that fixing. i wonder what w they know that we don't. ,ave a look at 10 year yields the opposite of what we saw this week, yields coming back a little bit. still all-time lows here. we had the minutes from the fed meeting overnight, showing are looking at two
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factors, the may jobs data and brexit. this could change. it is a moving target. march 2018 might be the first time the fed gets the second rate hike out the door. lower for longer. is thethe chinese yuan worst performing asian currency, but few people seem to be flustered. that is a major turnaround from six months ago. we have more on this. why do investors seem less concerned than last time? >> it is a big turnaround. two angles this time around, pboc has improved its communication strategy
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significantly. they are liaising with the , trying to inform and educate what this currency basket is all about and what they are trying to peg the yuan against. key issue in august last year was the unknown, what is china doing with the exchange rate question mark are they trying an outright evaluation? now investors are confident that china is letting it collide lower. glide lower. angie: how long will that continue if the yuan continues to weaken? >> the markets are in responding to what is happening to the yuan now. if people start to suspect china will let the yuan go farther from here and we have
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significant weakness, that would trigger capital outflows from china, puts pressure on policymakers, and raises suspicions around the world that may be china is trying to devalue on the quiet. angie: we are expected to get you in foreign reserves today, 3.165 is the estimate. expectation or do you think it will dip lower? becomes how the valuation effects it. there have then take moves in the yen since the last reserves. sterling has also moved. they impact the valuation of china's reserves. been intervening on the same basis as in the past, but it is more about watch and wait. triggersaker yuan
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outflows, that puts pressure on reserves going forward. bottom of the hour, 25 minutes from now, we will get our yuan fix of the day. >> that's right, daily fix. angie: thank you so much for that. let's talk samsung. rise, climbinga more than 2% after second-quarter results beat expectations. the galaxy smartphone, run us through the numbers. u.s.ind: 6.9 billion dollars against estimates for $6.4 billion. billion, so it is doing better than a year ago. at 40 $3came in billion, falling short of
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estimates. we have seen these preliminary figures, so the actual figures which are audited will come out later in the month and we might see more detail between estimates for sales and also the actual number, but one of the guests on bloomberg earlier said may be there has been a focus on profit margin as well. while sales may have fallen slightly, they have seen operating profit increased because of an increased focus on the margin. look at htc, a sales falling. shares falling after second-quarter sales fell, missing estimates of more than $728 million. once one of the top smartphone makers in the world, now struggling to achieve growth and maintain profitability. these products have been a hit with consumers.
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in 2011, it had a market share of 11%. 1.3% by 2016. smartphone market is aggressive and changing. angie: we will see if they can keep keeping up. thank you for that. we will take a more detailed look at that story later. we want your opinion. do you have a galaxy or an iphone? tweet us your thoughts #trendingbusiness, include -- your thoughts, include #trendingbusiness. for more u.k. firms have suspended trading and the wake of the brexit vote. they all stop trading due to exceptional liquidity pressures. cut the value of
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one of its funds by 17%. the fund is also holding with draws for 24 hours. investors are pulling money out of u.k. property funds. london officeng by you could fall by 20% within three years. movedu.k. firms have now to curb redemptions since the brexit vote. by theue of assets held singapore state investments firm have declined for the first time in seven years, driven by the slowdown in china and uncertainty over u.s. rate policy. 13% todings dropped by $178 billion through march, making it the first tech line since march 2009. the firm had more than half of its assets in china and singapore as of march 2015, leaving it particularly exposed to that slump in the year that followed. develop market investors were
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also disappointed. shares more than having during the reporting period. angie: the sister of korea's lotte group chairman has been arrested. the central district court says she is accused of bribery and investment. the 73-year-old is accused of accepting payments from a former head in return for giving because medic maker in duty-free stores preferential treatment. the eldest daughter of the founder is also suspected of embezzling 3.5 million dollars from a company that is owned by .er son they have not commented on those charges. the arrest comes as prosecutors widen their investigation into , 89 unitsmerate
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generating more than $86 billion in adding more revenue -- an annual revenue. angie: a microsoft apology. deciphering the terminology that may have the over 30's scratching their head. should we keep calm and carry on? our next guest leaves brexit will not cause a global downturn. we will ask why. this is bloomberg. ♪
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my next yes season no global downturn due to brexit. you say that global yields are at record lows across the board, investors don't seem to agree. >> you are right.
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rebound, and what we have seen this volatility since brexit. the market is trying to get a handle on where the global economy is headed. the u.k. accounts for only 2% of the world economy. that is not significant. for 12%. counts it will not result in a global downturn. it may shave 10 basis points of global growth, but the world economy is still going to be able to grow at 3.1%. it is still relatively decent. angie: that is if you don't ,hink that the flight to bonds the flight to safety havens, is not a capitulation of where we think this thing can go. think so. i don't think the flight to
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safety and bonds is an indication that the world is headed for deep trouble. it is not as gloomy as that. we have seen this happen before, the european debt crisis. initial reaction is always rather extreme, but bear this in mind, a lot of liquidity is sitting on the sidelines. fund managers and individuals are cashed up. if the market pulls back, the money will go to work. markets will see volatility, but rebound as well. the u.s. economy is still relatively healthy, so i am not as gloomy. angie: no doubt you had a cash pile when there was a rally a head of the brexit. where are you spending it? >> at this juncture what we are telling our clients is stay cautious.
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the course ahead is still not clear. the brexit saga is still unfolding. there will be possible political contagion. we are not sure. we are not negative either. we are saying the markets will be range trading. where we see opportunities, the u.s. stock market is holding up well. we still see opportunities in asia and japan. we have not turned negative on those regions, asia especially. they are looking attractive. that is a reason to keep it on your radar screen. asia willust settles, look attractive to medium-term investors. angie: i want to bring in breaking news as china sets it yuan reference rate at 6.68 against the u.s. dollar. that is versus 6.6857 a day earlier.
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weakening over the past two weeks, the lowest level since november 2010. the last time we saw this precipitous drop, it triggered contagion across asia, but were not seeing that this time. why do you think? >> the markets have gotten used to it. as long as china allows its currency to depreciate at a gradual pace, that will not spook the markets. the chinese authorities have shown they can hold the occurrence -- the currency relatively steady and hoping china will be able to engineer a gradual depreciation of the currency. if it is gradual, it is fine. if the current cc a significant decline more than 3% in a short span, then markets will the
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worry about a devaluation, capital outflows, and that will spill over to asia and the rest of the world. angie: thank you for that. joining us out of singapore. >> the latest first word headlines. the uk's decision to leave the european union could benefit emerging market companies facing maturing debt. >> it has delayed the rate hike of the fed, so cost could remain lower for longer, meaning companies won't pay higher repayment cost, resulting in untildefaults from now 2020. three of the world's top currency speculators say the pound may have further to run. there are predictions that sterling may sink another 7% to 11% this year. bank,n sachs, deutsche and city bruegger made that call on expectations that the bank of england will cut interest rates.
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china's growth fund is said to be discussing a $2 billion deal .o buy glencore's goldmine the $40 billion fund was set up to invest along the ancient trade route with central agent -- asia. commodity prices recover. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. angie: coming up, from his parents garage to an ipo that raised $37 million, we will discuss the road to retail success live from the debut. this is bloomberg. ♪
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exchangengapore stock
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has regained its top position for initial public offerings, raising more than $1 billion in the first half despite lackluster global economic growth and volatility in the equity market. turnaround.e a you bet. finally some good news. eight ipos in total so far, $1.2 billion raised, 29 times the amount raised in the first half pretty year, so impressive given the challenging market environments. two big ipos in particular contributed to the great performance. both were reits and account for 90% percent of the amount raised.
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-- 96% of the amount raised. some say it sets the tone, sets the stage for more ipos later in the year. the second half historically sees more listings, sometimes double the first six months of the year. the ipo market globally has been pretty patchy. activity remained significantly low versus the same time the year before, so fingers crossed it will continue. angie: what is the outlook for the singapore equity market? it has been smacked hard this year. our better days ahead? encouraging,g to down 18% year to date, lacking behind indonesia, thailand, the philippines. they are all in positive territory this year. singapore is susceptible to movements globally. it is an export-oriented economy, slower growth in the u k and europe all have a negative
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impact on singapore. some say there is also a strong correlation between performance of the index and oil prices, which are currently sluggish. looking forward, not looking too bright. angie: ok. thank you so much for that. live for us out of singapore. australian online retailer kogan.com will make its trading debut in sydney today. 10 years ago, ruslan kogan started the business and his parents garage. today, it will float after an ipo that will raise likely $37 million. paul allen joins us live from the a sx. >> that's right. it is straight out of the book of business mythology.
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the shares will be priced at $1.80. it was four times oversubscribed. forecasting revenue of $241 million. they recently acquired the collapsed of the reeler. -- retailer. in the next two minutes, you will see this room behind me begin to fill up and hear the ringing of that ballot the top of the hour. has come aan kogan long way and has had to win over a lot of critics, hasn't he? paul: yes, he has. it is probably due to the nature of the business when it started in 2000 six, offering discounts on iphones when no one else could, sourced on the gray markets, many products were things like televisions brand
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with his own name that he sourced independently from china. it all looked a bit shady on the service, but he has overcome that image over the last 10 years. he says this afloat will release capital constraints, focus on growth, specially private labels where he made his name. those are where he will make his biggest margins. angie: presuming raising $37 million here, what is he going to use that cash for? well, yes, he will focus on growth as i mentioned. that is the plan here. stake whichin 50.5% she will not be able to sell for a few months, but is quite comfortable holding on to that. growth is the story for ruslan kogan as it has been from his humble beginnings. angie: humble indeed. parents garage. thanks. coming up, after a record run,
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could the good times be over for chinese companies hoping to make foreign purchases? find out, next. this is bloomberg. ♪ get ready for the rio olympic games
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by switching to xfinity x1. show me gymnastics. x1 lets you search by sport, watch nbc's highlights and catch every live event on your tv with nbc sports live extra. i'm getting ready. are you? x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1.
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♪ angie: the top stories trending this hour, gold extending gains, the yen remained strong amid brexit anxiety. japan making modest gains along with crude. after fed minutes revealed officials were unnerved by mays week job number ahead of the brexit vote. ,heck out samsung shares positive territory, higher after profits beat estimates thanks to
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the success of its galaxy smartphone. operating income rose to $6.9 billion in the three months to june. apple has fallen to number five in china smartphone market. counterpoint research says while weight increased its lead with 17%. pboc set today's yuan fix a higher than yesterday's five year low. the chinese currency has fallen 1.7% over the past few weeks. unlike the selloff in risk arets, this time investors taking the decline in stride. stride, david monitoring the market in shanghai and hong kong. david: that's right. i was just talking about the yuan. it is in focus now because it has underperformed.
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-- moreallen against than a lot of these counterparts across seizure. -- across asia. you have the fx reserves, the different slow, i know, but these to tend to move in the same direction. tends ton why the yuan .eaken when fx reserves fall $25 billion less is what were expecting for china's fx reserves for june at some point today. have a look at where we are at the moment for the offshore renminbi. a lot of these traders told us that before markets open in asia that this was well bid. ,his underscores that statement 6.70 on the offshore renminbi.
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dollar-yen capping the gains on the cash market, back hello 101 -- below 101. 100 at oneell below point yesterday. came at about six akaka p.m. our time in asia, so a full yen weaker. index.look at the dollar fed minutes out, brexit, jobs .ata the dollar index sing a bit of a ing a bit of a bit. across asia, regional benchmark, should be higher at the moment. nikkei 225 down for tens of 1%.
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have a look at what is happening , accounting for a fourth of that gains, up 21 points. samsung is contributing five points to those gains. fortunes, alsos the kospi, samsung enjoying a rise, off its intraday high, down below 2%. the reported second-quarter results earlier that beat expectations. we have our technology reporter with more info. profits sharply exceeded market consensus. how do they do it? >> the result came as a big surprise to me today, the biggest profit in more than two years due to a surge on mobile earnings.
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duringiphones were out the second quarter, also helping samsung sustain growth as many mobile carriers had to boost marketing spending to drive sales, so that partly shifted from promotion cost away. altogether, they contributed to stronger than expected earnings results today. angie: the stock has been rallying for the past month. what does this mean? >> it means investors are businessbout samsung's performance going forward. many expect samsung to see profit growth from its solid-state disk drive and dependable screens in the coming ble screens in the coming years. for mogul competition
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will intensify when apple introduces its new iphone. investors are still adding -- componentssamsung's businesses. boost samsung may investment on components later this year. what makes you think that way? >> samsung introduced its new devices, smartphones with curved screens in 2014. that proved to be a big hit in the market. also considering releasing new smartphones with then th screens that can bend as early as next year. in order to keep up with demand, samsung has to ramp up its technology upgrades as well as production. cashng has a big
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borrow -- file, and now it's time to spend some of it to make some profit. so much for you that. i want to bring you live pictures right now from kazakhstan, we're a brand-new spacecraft is set to blast three estimates into orbit. as you can see, they are preparing for liftoff. it is scheduled for right now, 9:36 p.m. eastern time. , you areonds from now going to see this rocket launch. on board are three astronauts headed to the international space station. it will be quite a ride here. this is an upgraded rocket. this launch was actually scheduled for spring but was setback due to an issue with the spacecraft software.
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let's listen to the cap down and watch. >> 3, 2, 1. engines at maximum thrust. and liftoff. >> there you go. lift off for the three astronauts from three different space agencies on board and nasa russian, and a former japanese airline pilot of the japan aerospace exploration agency. wishing them all a safe journey to the international space station. all right, let's get back to the smart phone sector. samsung is fine, feeling good, but a fresh blow to apple, falling to number five in the chinese smartphone market as
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cheaper chinese rivals take the top spots. this is the latest in a series of china setbacks for apple. this is the biggest overseas market for apple. they have to get their act together. >> there are a number of challenges. there are the domestic players coming out with feature-rich products that rival apple. are muchhalf the price cheaper, so they have taken the market share. let's bring up the top five sellers in the last month. it is quite an interesting new table. apple falling to number five, number three a year ago xiaomi has fallen to number four, then a contract manufacturer for other brands now having their own brand up to number three. they have doubled their market share in the past year. they have come out of nowhere really.
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vivo is another name that has popped up recently. , solidifying its lead. it was number two about this time year ago. where is samsung? angie: where is samsung? >> they used to be at the top a couple of years ago. where is lenovo? are the names i remember. those top for chinese brands comprise 53% of the market. angie: apple is still a premium rest a there, all the lower market, but still very affordable. apple has had a lot of challenges in china. how did they drop to number five? we thought they would gain top
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spot. this is the commoditization of the smart phone market, where you can get feature-rich products and a lower price. apple goes for the high end, little crass -- middle-class consumer. they have lost a patent case, a trademark dispute, also regulatory issues with app stores, itunes, ibooks, being pulled out of the market because of patent regulation on content on the internet. angie: thank you so much for that. we have some breaking news right now from s&p. outlook fromng its negative of australia to stable now. the australian outlook change from negative to now --
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actually, let's get back there. that is the reverse. it has changed to negative from stable. it was stable, and now it is negative. apologies there. s&p changing its austria outlook .wo aaa negative the was expected after political campaign that has left a question as to who will control australian leadership with malcolm turnbull just hanging on. paring gains00 after it lowers its australian outlook to negative. the fews been one of bright spots in global mergers this can -- global m&a year.
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our asia deals reporter has been crunching the numbers. is this sustainable? that is the real question. we have been talking for the first half of that year about how we were going to hit the records. we hit the records. so we have been asking m&a wenkers and experts, perhaps are reaching some kind of plateau or peak. the answer being yes, actually. there is a real sense that maybe this china outbound wave will start hitting some speed bumps. will remain high, good momentum, but perhaps we are looking at some kind of plateauing. angie: where are the regulatory challenges? >> at home and abroad. at home, we look at the expense has been determined
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to monitor those outflows. privates, they have been delayed because the batches of currency that need to transfer are received. in europe and the u.s., even europe perhaps a little bit less friendly to chinese deals than we had thought before. there had been a couple of high-profile examples, robot makers for instance, getting government scrutiny. angie: you usually expect huge sectors with broad reach, but robots also feeling the challenge there. if chinese deals hit this plateau, how would that impact global m&a? on a global perspective, we are down 13% from last year. china m&a was one of the very few bright spots.
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there are a lot of bankers and lawyers that are relying on china m&a to keep at a good pace for the rest of the year. angie: thanks for that. next, japanese 10 year bond yields could drop to unprecedented levels. how low can they go? this is bloomberg. ♪
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angie: it is not in 40 6 a.m. in hong kong. these are the latest first word headlines. the former u.k. prime minister tony blair and the country's involvement in the invasion of iraq has been criticized in the official inquiry. the report said britain joined the coalition before these full options had been exhausted and used intelligence that was overstated. blair this fended is positioned and apologized, but not for the
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invasion itself. bankers advising small and medium businesses in the bid to chase fees. the ceo has been stressing the importance of bolstering businesses as interest rates crimp profits. and now messy has been handed a 21 month prison sentence, but is unlikely to go to jail. of or evadinged taxes between 2007-2 thousand nine and find $2 million. typically does not and four sentences of less than two years if the guilty party does not have a criminal record. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. angie: the uncertainty created
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by the brexit decision has push wary investors to become more risk adverse. yields across the globe have fallen to new lows every day. japan's twenty-year yield slipped below zero on wednesday. how much lower can things go here? let's discuss that. look, if you hold it to maturity, you will lose money, so investors are clearly making a bet that there will be more investors piling into the bond space driving up prices. current season volatility are in another bet as well. stimulus,expect more lower rates, and we have negative rates in five countries across the world, then you still have a carry trade. it's not just about bonds. it is about funding. the main perception is we will get more liquidity and stimulus
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across the world. angie: what is the most interesting sovereign bonds space? >> those already in the negative trap. in the case of germany, japanese government bond market just urging -- touching zero. we have only 12% of the market that is in positive territory in japan. there is no choice but to look overseas. that is one about the crystal-clear elements about grabbing for yield globally. into: people are pouring them, driving down yields. warnings,l these which s&p just confirm moments ago, that it is diminishing its outlook for the australian economy to negative now, down from stable. you expect people to just
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drop that off and still go for it? week, a wavelast of downgrades by the ratings agencies. what is the impact? lower yields, record levels. we are still talking about investment-grade status. australia still has one of the lowest debt to gdp percentages. angie: it is the lowest, 37% gdp, japan, 250%. size.not the many say it is the way in which it is growing. >> if you look in terms of valuation, people talk about yields are low. relative to other markets, it is actually a high-yielding market. is a lot more compensation than looking at ratings differences between the countries. angie: when it comes to rates,
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call it for us. when you think in terms of the fed rate rise outlook? >> it could be never forever, right? that might sound a bit extreme, next, thehis year and market has priced out prospects of a further rate hike. about the u.s. fed , brexit, currency exchanges, china and economic slowdown, etc. can welook at ecb, boj, talk about rate hikes on any time horizon? no. angie: how sustainable is that at central banks to keep it such record lows in negative territory? >> there is no choice and absence of governments picking up the baton.
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to me, i agree, there is may be policy makers that need to step in. until then, it is central banks. next week, highly likely the bank of england joins the fray for the first time by easing rates. that. we expect we will leave it there. thank you for that. chat box and sexy go-go dancers, microsoft is apologizing once again for its latest misguided attempt to get down with the kids. we will explain it all next. maybe with the help of an urban dictionary. this is bloomberg. ♪
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angie: welcome back. it has not been a great start .or tech companies
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we are here with a lat all the damage. let's start with microsoft. trying to sound like the cool kids and backfiring spectacularly. haidi: microsoft sent out this e-mail inviting company in turns to a party. it used, the way the young kids the today. it gets worse from there. drinks will be on offer and the ability to get lit. angie: encouraging getting drunk on a school night, monday night, but also a little inappropriate.
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up on socialnded media because someone sent the e-mail to someone else and he got on twitter. the current ceo has been trying to update the image of microsoft as relevant and cool. haiwei too?e photo, butoaded this someone said it makes taking photos and soft light conditions of pleasure. a $4000 canonth slr.
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angie: ok. i get it. thank you so much for that. coming up, bitcoin facing its biggest challenge yet. this is bloomberg. ♪
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♪ >> from our studios in new york, this is "charlie rose." hari: good evening. i'm from the pbs news hour, filling in for charlie rose, who innovatively. -- who is away this week. we begin this evening with the latest development in the investigation into hillary clinton's e-mail use. in an announcement, james comey recommended no charges be filed against hillary clinton. he did describe clinton's e-mail practices as "extremely careless." director

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