Skip to main content

tv   Trending Business  Bloomberg  August 7, 2016 9:00pm-11:01pm EDT

9:00 pm
♪ it is monday, the eighth of august. this is "trending business". i am rishaad salamat. ♪ we will be heading to tokyo, sydney, and singapore. asian-pacific markets rising after that strong jobs report from the u.s., their regional benchmark climbing 21%. signs of stability, china's foreign exchange reserves less in july.
9:01 pm
japan awaits an address from the emperor, the second time he has made his speech, live in tokyo. ,ollow me on twitter @rishaadtv and don't forget to include .trendingbusiness greater china markets underway and 30 minutes. indeed, a positive follow-through from wall street. derailedis rally got from that disappointment at the boj, but we are back on track. the nonfarm payrolls number added some clarity on where investors think the u.s. economy is going. the japan and rally under penned by yen weakness. rpinned by yen weakness.
9:02 pm
australia also extending, up 8/10 of 1%. the dollar steady with that data coming from china. some domestic activity indicators coming through this week from china. the kiwi dollar holding steady at the moment, stocks up by .5% ahead of the rbnz decision, expecting another 25 basis points to come off that cash rate. to 3%ion is below that 1% target. 8/10 of 1%,es up by a slight miss. malaysia up by 2/10 of 1%. a quarter of 1% when it comes to the kospi.
9:03 pm
hammered byce got the stronger u.s. dollar, signs of improvement in the u.s. jobs report. the biggest a kleiner's on the asx down by over 70%, others not far behind. decliners on the asx down by over 7%, others not far behind. thanks, right, signs of stabilization for chinese a,, pboc revealing fx reserves little change. the pboc burnt less of its money last month. >> that is correct. china's central bank churning through it less of its cash pile ahead of its inclusion into the reserve currency basket in october. also thanks to the weakness in the u.s. dollar, which boosted valuations. to $3.2by $4.1 billion
9:04 pm
trillion according to the pboc over the weekend, and is lined with the median estimate of economists. the stabilization and fx -- in fx reserve suggest capital outflow pressures have eased. haven demand pushing the yen higher. it is up 21% year to date against the renminbi. the brexit vote push the pound down and the euro higher. we spoke to commerzbank and singapore. he says while the pboc may have intervened in july following the it wasn'te "significant enough to move reserves." july trade figures due sometime today could point to further stabilization in the world's second-biggest economy. the man for exports remain tepid
9:05 pm
as other pressures add to global uncertainty. balance, $47.3de billion, down from $48.1 billion in june. are tipped to be down 3.5%. imports still sluggish, falling 7% and the last month. the weaker yuan should have boosted competitiveness, but global demand following the brexit vote likely have an impact on july's numbers. rishaad: we will have a more detailed look at that story. tweet us your thoughts at @rishaadtv, use #trendingbusiness. profit at singapore's biggest bank missed, dbs saying swiberns for overshadowed gains. is proving to be a huge
9:06 pm
deal for these banks. >> for this quarter, they took earnings miss of 150 million singapore dollars. swiber is not that big, total is limited, but it is the sentiment around the industry. oil services industry has taken a huge knock from the tropical oil prices. if oil goes below $40 and stays there, you will see some of these exposures. billion as total exposure to the oil and gas sector. that,you break out from the bond exposure, maturities of about $1 billion coming due in 2018, and that's where people will be looking. $40 or fallsbelow further, some of these companies might be in trouble. rishaad: the outlook is
9:07 pm
important for a bank like this. what are they saying. are waiting for their outlook. we have their earnings statement. in other areas, things are looking ok. we don't have their outlook just yet. rishaad: thank you. i look at other stories making headlines per we have the roundup with the boj to start things off. avid: let's start off with summary of opinions coming from the recent boj meeting, different from the usual minutes, a quick take of what took place and the important points discussed. it does not say who said what. one member said the bank should reject this idea that monetary policy "has its limits and side effects." i'm not sure how well that sits with the investment community. one board member address concerns that the boj is nearing the boundaries of what it can do. on that point, one member pointing out and warning that
9:08 pm
increasing the etf purchases, which they did, could feel concerned, so far as what the boj can do otherwise. a review of policy should be helps as something that the bank find out what can be done to achieve stable 2% inflation. based on what we have seen in recent months, inflation is well below target. members noted downside risk to prices with more uncertainties ahead. our own the survey points to the fact that the boj will need to --her change or complete completely do away with its time reference for that target. , the sunday times reporting the company is looking to buy the intercontinental hotels group, possibly make a bid worth more than $9 billion. anbang saying it is not true.
9:09 pm
there has been a lot of speculation in the industry because of so many mergers in the hotel sector. with a march, anbang drew their bid for starwood. withdrew their bid for starwood. finally let's have a look at shares of ono pharma. partners, one of its we were looking at a drug that failed a cancer trial. the drug basically failed to meet the primary goal of in ahening survival specific group of patients. ono maintains the failure will not affect earnings. markets have look elsewhere.
9:10 pm
the initial reaction, have a at shares of bristol-myers. most in 14 by the years. we are waiting for the stock to start trading. in cancer, approved but not first line therapy, where there is growth potential. athaad: right, where looking one man's big bet that china's currency will collapse on our website. it is a good read, we have bloomberg's olympic medal tracker saying bigger and richer is not always better. details later on. australia's treasurer warning of risks to the country's top credit rating. ♪
9:11 pm
9:12 pm
9:13 pm
♪ a quick check of the latest business flash headlines. the uk's serious fraud office has opened an investigation at some of airbus's consultants. there are over missions and misstatements in some applications by outside contractors. takata says quarterly profit tumbled by a third, net income $20.5 million. takata has yet to compensate , $127 million profit forecast. shares surging in tokyo.
9:14 pm
expectations low for 500 .com's earnings. expectations the company will be let out when lottery services resume after halted over corruption investigations. more than 4 million of traders shares were shorted after the stock plunged 11% this year. economist warning that cuts to our strays cash rate losing their impact. let's get over to paul allen. the reserve bank warned about this loss, didn't it? that glennhing stevens has been talking about repeatedly. paul: they have. the reserve bank has talked about this over the past month. the closer you get to 1%, the
9:15 pm
less effective cash rates are. we had a telling case study last week, the reserve bank lowering the cash rate to 1.5%, the bank failing to pass the cut on and raising on deposits. the prophecy is coming true. rishaad: what are the economist making of all this? the last time they cut the rate, they did so because of weaker cpi reads. the warning that the reserve tank is telegraphing what it will do next, a risk that markets expect that every time we get a bad quarterly cpi print , the reserve bank will jump. was the most scathing, saying i believe is zero impact will come from the latest cut. you have to wonder how many businesses were waiting for the rba to cut the cash rate before
9:16 pm
hiring a worker or buying equipment. sign theis there any government might take up the gauntlet and start reforms? we had the prime minister talking about this. paul: the government would like to. scott morrison was talking about it yesterday on local media, warning that it will be difficult to retain australia's triple-a credit rating under existing circumstances. he says what would make the job easier would be passing savings that would balance the budget. well, good luck with that. that is why the election was called early, to clear out what was viewed as an obstructive senate, and what we got in its place was potentially and even more obstructive senate with 11 cross benches instead of eight. that job of reform becoming so much harder for them. rishaad: paul allen force.
9:17 pm
-- for us. good of you to join us today, martin. what are you making about the australia loses its aaa rating. how much will it impact sentiment in the next 6-12 months? >> the government would like to maintain the aaa rating. in fact, there is bipartisan agreement to do that. moved to a negative outlook, which means a one in three chance of losing the , or two in a notch three that we will keep the rating. australia has the lowest budget deficit of most major countries. at the end of the day, we want to maintain that around the
9:18 pm
funding side. in a low interest rate environment, those countries ,ith lower ratings below aaa the funding costs have not are medically increase in the current environment. increasedundamentally -- have not fundamentally increased in the current environment. we don't want to be seen to be losing our aaa rating. the government is clearly putting a forceful case to get the budget through. they goances are how about it and the timing, and that is where the two major parties vary. rishaad: are there any investment implications on this, trading on the fear more than anything else? seee don't think we will
9:19 pm
significant movement of capital flows out of the country if we are going to go from a aaa rating down one notch, but it has some impact to funding costs . we have yet to gauge what that will be for the government and the banks. that rating will extend across the state governments, which are , exceptbudget deficits for new south wales and victoria. new south wales is basically rotating out of some infrastructure assets to reinvest funding back into new infrastructure. that would be viewed fairly positively overtime. rishaad: stick around with this. -- with us. more from him, coming up. the implications of that amazing blowout number on friday from
9:20 pm
the u.s. jobs report as well. this is "trending business". this is bloomberg. ♪
9:21 pm
9:22 pm
you are back with "trending business". about, we were talking australia's aaa rating, but let's move to the fed. that jobs number, does it move needle when it comes to a rate hike? >> it will probably move the probability. it has been our view that we would see a december rate hike. the federal has been spooked at times due to global market volatility and held off, but the numbers continue to improve. it has been pretty consistent and beating expectations, so
9:23 pm
when you look across the board in terms of the jobs numbers, wages growth, we think we are on track for a rate rise in the u.s. by december. how does this election play into all that? >> between now and election day in november, it's going to be mediasting to watch the closely on how the candidates conduct themselves. an issuel clearly be on not just investor confidence, but consumer and business confidence. we have to see what the actual outcome will be. we are watching that pretty closely at this stage. it might generate some additional global financial turbulence heading towards the november election. rishaad: and that is something which you could argue could be beneficial for the gold price. people are suggesting the gold
9:24 pm
rally is now done. what is your view? >> i haven't been that positive and missed this rally. the four key elements the drive gold price, the u.s. dollar, it inflation, jewelry demand, geopolitical events. only one of those has been driving the safe haven stance on gold, the geopolitical events. stability in the u.s. elections, then i think the gold price may have seen its best of the moment. we would be expecting the u.s. dollar to firm up. jewelry demand seems to be fairly benign. so it is around that safe haven status that has been driving gold, and it has certainly run pretty hard. rishaad: if the price of gold is a function of what is happening with the dollar, what is happening to the dollar in your view? it does tend to appreciate ahead of an interest-rate hike.
9:25 pm
have seen a couple of false starts with the u.s. but we would expect the u.s. dollar to continue its upward trajectory, and that would not be good for gold. it would not be good for other commodity prices either. we are expecting the oil price to head towards by $55 towards the end of this year. price is around $60 a time, rallying 17% in the last month. we expect the price it to hold at the $55 to $60 a level at this stage. rishaad: thank you very much food right, a look at other stories making headlines. everbright security setting the terms of its first share sale and hong kong. brokerage planning to offer 680 million shares at a price range of $11.80.
9:26 pm
proceeds toe the fund overseas business and develop wealth management. shares start trading on august 18. early is one of the proponents of electric vehicles and talking to panasonic to sell off its battery division. inwill dispose of its 51% the automotive energy supplier. the automaker is in talks with companies, including chinese ones, a spokesperson saying the reports are mere speculation. aec countries see resurrection to freeze output. they say there is no plan. are scheduled to meet next month. talks collapse after saudi arabia insisted iran joined the pack. iran said it would not do so in till it reached pre-sanction levels. the emperor of japan is to countrythe
9:27 pm
later, only the second time. will he announced the fact that he is abdicating? the start of the trading day and hong kong and shanghai. the opening numbers are coming up. ♪
9:28 pm
hey how's it going, hotcakes? hotcakes. this place has hotcakes. so why aren't they selling like hotcakes? with comcast business internet and wifi pro, they could be. just add a customized message to your wifi pro splash page and you'll reach your customers where their eyes are already - on their devices. order up. it's more than just wifi, it can help grow your business. you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. [ hip♪ olympics 2016, let ] me get you on my level. ♪ ♪ so you never miss a moment, ♪ ♪ miss a minute, miss a medal. ♪ why settle when you can have it all? ♪ ♪ soccer to wrestling. track and field to basketball. ♪ ♪ fencing to cycling. diving to balance beam. ♪ ♪ all you have to say is, ♪ "show me," and boom it's on the screen. ♪
9:29 pm
♪ from the bottom of the mat, ♪ ♪ to the couch where you at? ♪ ♪ "show me the latest medal count?" ♪ ♪ xfinity's where it's at. ♪ welcome to it all. comcast nbcuniversal is proud to bring you coverage of the rio olympic games. ♪ rishaad: a look at our top stories, asian shares taking friday's rally and rising alongside oil. japan leading gains with the dollar extending its rise against the yen. the u.s. jobs data bolstering that a fed right could be on. oil trading at $42 a barrel. up despite a 6% drop in second-quarter profit. firmd provisions for the
9:30 pm
swiber holdings overshadowing soughtver since swiber court supervision for operations. boj instigating a review of policy today, expected increase in the stimulus program. boj review will be presented to board members ne month. and the in hong kong open and shanghai. let's have a look at how we are shaping up ahead of that china data. >> you can spot the odd one out. coming online weaker, down a 10th of 1%. china ada blanche today today. blitz
9:31 pm
domestic activity numbers coming through as well, giving us a better indication of whether stabilization is on foot. the nikkei 225 close to session of the moment, underpinned by a weakness in the yen, i were spied after that stronger than expected nonfarm sprint on friday. most of the asian rally following on the back of that. tenthsstocks up by eight of 1%. declines on the back of dollar strength and improved outlook on the u.s. economy. kiwi stocks, expecting not just , butate cut from the rbnz also the bank of new zealand expecting additional cuts in september and november as inflation continues to track
9:32 pm
below target. some strong gains coming -- straightaight times index up over 1%. a quick look at some movers. we were expecting downside on gold futures. we are seeing that indeed. miners are the leading decliners on the asx today. another stock we are watching ,head of that china data dump huge export market in china, blackmores. gains of 2% when it comes to the price of iron ore. for dollar,upside 3/10 of 1%. the aussie dollar fluctuating today, downside ahead of those
9:33 pm
numbers from china. a line ofroving to be resistance, isn't it? some further signs of stabilization when it comes to china foreign exchange reserves. our chief asia economics correspondent is with me now. what does this tell us about the situation in china? result, quite a stabilizing, considering where we were a year ago last august. it shows the market is becoming more comfortable with china's exchange rate regime. rishaad: they were rifling through that money. howf you consider communications have improved. was coming the yuan off sharply over june july, they
9:34 pm
still managed to stabilize without having to spend too much. compared to where they are to where they are now, markets are more comfortable with china. rishaad: what about risks to this picture of stability? >> the fed is still a big part of the picture. to rate hikes before the end of the year could still be a possibility. other fed members make the point. was a hawkish fed and u.s. rate hikes are back on the table, strong dollar rally, that pushes yuan into pressure. rishaad: how will the trade numbers reflect the fx reserve situation? >> it will be interesting to see
9:35 pm
if there is any dividend from the weakening currency. they are not expecting too much ahead of this, just to see how key markets are going in europe, brexit, but the biggest picture remains a moribund trade story for china. rishaad: we will check on some other stories, the african national congress having its worst election results since 1994. urban voters turned to other parties, angry over a stalling economy, scarce jobs, and scandals around president jacob zuma. it's a support is now mainly rural, where voters depend on government services. approve aotes to constitution that critics say hands the government too much power and restrict civil rights. the election commission says the
9:36 pm
draft has been supported by 62% of voters. the leader says the result keeps tylan on course for a return to full democracy. japan issued a formal protest after chinese ships entered waters claimed by both countries. to vessels sailed close islands and mandarin, summoning the chinese ambassador for the second time in three weeks. 230 fishing boats and six coast guard vessels were claimed to be in the area. survey finds most economist to expect the boj to increase its a stimulus program and things the bank will stick with negative rates. the time for achieving 2% inflation could change. james, tell us more about this survey. out at thee boj came end of july with this review of
9:37 pm
policy, bits of information coming out. the review is not to come out and say the boj should taper stimulus or cut back on what it is doing. we spoke to an economist who follows the boj closely, the majority think that what will happen from the review is that it will lead to more stimulus from the boj, and the majority ,on't think there will be a cut the negative rate will not be abandoned. the bank gave no indication of that. what they have said publicly is the negative rates are working to stimulate growth. people are not expecting this review to change the direction substantially of monetary policy. the opinions about that were offered at the meeting? right, the boj came out with
9:38 pm
their summary of opinions today from the july meeting. a bunch of opinions without the name of the person who uttered them, so you are not clear how many people are saying or thinking the thoughts expressed there. they are in a wide range of opinions. one of them voted against the increase in the etf purchases, were opposed to etf purchases, increasing that, and the bank should cut them because the boj has reached the limit of its monetary easing. one other opinion said the only limit to what the bank can do with its monetary stimulus is the amount of jgb's issued, so a bullish statement there from one of the board members that the boj could continue to buy hundreds of trillions of more of assets. a very wide range of opinions, but i was majority of people
9:39 pm
think that increasing etf buys was the right decision and the majority agreed with governor kuroda that the bank could do more if necessary. tell me about this comprehensive review of monetary policy. what are economists expecting out of that? the expectation is that the bank will come out and cut or change the statement that inflation, 2% inflation, will be reached in two years. in boj came out with that 2013, so 2% in two years is ludicrous on the face of that, so i guess the expectation for many people is they will either abandon that two-year portion of that or change it in some way. there is no indication that the beinflation target will reached and no one is thinking the bank will start tapering
9:40 pm
asset purchase. on the surface of it, the biggest expectation is a change of the time for when the boj expects to achieve 2% inflation. rishaad: thanks for that. we will return back to tokyo. the japanese emperor will address the country after the state broadcaster said that he will be announcing his intention to step down. let's get to our managing editor in tokyo. what is emporor akihito likely to say here? he wants saything is the word abdicate, because at this point legally he cannot do it according to the constitution. however, he is likely to hand that he will step -- to hint that he will step down and that he is having difficulty staying on top of his duties due to his advanced age, which is a message that will resonate in japan.
9:41 pm
there is a lot of historical significance to this event, isn't there? >> yeah, this is hugely important. ule has akihito's allowed him to stay clear of politics. it is fair to say that he has .chieved the era the significant thing is that it underscores the fact that while he does occupy an important role as the guardian of japan's pacifism, he is not a living god. that mantle can be handed on even if he is still alive. it prevents any rift in the future that might seek to somehow use him as a symbol for its own agenda.
9:42 pm
in that sense, it completes his mission as a humanitarian, a living person who promotes peace and compassion. ithaad: i'm guessing that does not have a read through when it comes to the economy or markets? >> there are a few industries that may benefit. current erarom the to the next era, printing companies will benefit from that because a lot of documents will have to be printed. we do not know at this point even when he does talk about stepping down, we don't know would begin.period otherwise, for all intents and purposes, it is not an event for the currency markets or economy. rishaad: still ahead, a top ranked fx forecaster will talk about how a weaker dollar boost
9:43 pm
valuation of the chinese yuan. that is coming up. ♪
9:44 pm
9:45 pm
♪ a quick look at what we will be covering for you over the next five days. tuesday, the end of an era in india, the last policy meeting for the current r.b.i. governor, growing calls for a rate cut. his appointment in boosted investor confidence. we still do not know who will be seceding him. on wednesday,t the stock having a roller coaster ride, rattling 16% following a two-day drop, the first set of earnings under the new leadership of the co-ceos. replaced in may.
9:46 pm
expected to cut the benchmark rate to 2%. another cut and november to take rates to 1.75%. on friday, the latest picture of china's economy when it releases retail and industrial numbers for july. the previous month showing an increase. china capital outflow pressures may ease if you look at the foreign exchange reserves. data from july coming in, within market expectations. my next guest says the long-term prospects for the yuan depend on structural reforms. let's start off with your view of the fx showing stability.
9:47 pm
>> the reserve numbers were no surprise. showed a slight decline, it is clear outflow pressures are under control. there are still outflow pressures, but nowhere near the magnitude we saw towards the end of last year and early part of this year. effects helped, but the pboc likely intervene in the vicinity of 10-15,000,000,000 dollars in the month as they tried to keep it at that level. rishaad: indeed, that's a level we are hovering at. what are the implications for the trade numbers we are getting? slowing global economy to some extent reflected in export data we have had in the past. >> i think the export numbers will still show some contraction, but the fact that
9:48 pm
the authorities have allow the currency to weaken significantly over the last 12 months should provide some boost to chinese exports. contraction is still expected, i guess it could have been far worse if they had not allow the currency to weaken, but really what we are seeing right across asia trade numbers is the fact we are having as slowing global economy. trade is certainly slowing, and that is having a material impact not only in terms of china's exports, but also right across the region as well. rishaad: when they had this fixing mechanism in place, the yuan rate, it was criticized and little understood. do investors have a grasp on what is going on and are they letting the market dictate where the yuan goes? fixing mechanism was a source of much confusion when it
9:49 pm
was implemented in august last year. a couple ofthrough iterations, but since february this year, we have noticed the do to the fixing mechanism currently in place, so to some extent it is market driven in the sense that where the onshore spot closes the day before has a strong effect on where the fixing is, but that does not mean that the authorities don't have any influence at all. in fact, we do note that there have been on some occasions where the authority strongly guided where the fixing should oddshich is at complete with what the methodology suggest it should set. rishaad: your contention is that the future of the currency renminbi is going to be based on what happens in terms of structural reforms, that structural reform program in china, but where do you think it
9:50 pm
should be going and what should the priorities be for the authorities there? there is a short, medium, and longer-term view around the currency. the short-term is for the rest of this year. there will be further theeciation pressure on renminbi because the chinese authorities are encouraging onshore companies to expand overseas. flows are at what the showing, china is now exporting capital to the rest of the world , and of course china continues to deleverage, continues to reduce their foreign-currency debt levels, so in the near term, the outflow will continue to put some near-term pressure on the renminbi. over the medium-term, things like fdr inclusion, getting the chinese equity market and bond market into global benchmark indices.
9:51 pm
in orderl be important to attract global inflows into china to offset the outflows. if they can do that successfully, then we could start to see the renminbi unwind depreciation pressure and start to appreciate again, but of course we still need longer-term structural reforms in order to continue to rebalance the chinese economy, set it on a path of sustained growth, and make the renminbi a truly global reserve currency. only then will we start to see andrenminbi take its place embark on a more sustainable appreciation path. rishaad: thank you very much. have a great day. we have to take a bloomberg is this flash look at the headlines. has finished a review of last week's hack, saying
9:52 pm
plans will lose 36% of deposits. the exchange will offer tokens be the redeemed and its parent. it will reopen with limited functionality. it sent bitcoin value down. bond trader has won a lawsuit against unfair dismissal. .e sued after he was sacked he says his bosses made him a scapegoat in several failed lost $40er nomura million. blmart aims to close a three and dollar acquisition of as early as monday. sources say walmart ones the founder to head the retailers online division as part of the deal. the acquisition would help walmart challenge amazon by tapping into proprietary technology and customer data. up next, the olympics well
9:53 pm
underway, and traditionally wealthier countries win more dals, but not according to bloomberg's olympic medal tracker. that is next. ♪
9:54 pm
9:55 pm
♪ right, you are act with "trending business". bloomberg keeping track of the medal tally., closer to the top. , first, what it does show is an updated tally of who is doing well at the olympics. it depends on which events are finished. at the moment, china is leading, next is australia. typically the wealthy countries tend to do well, taking home the most metals. -- medals.
9:56 pm
we have made an adjustment and thrown in the size of the economy, population, so you can derive medals per 100 billion population. nowvo is doing much better because of the size of the economy. we are now looking at five medal s. they won a gold medal in judo. that translates to five medals per $100 billion of gdp. obvously they have a small economy and population. north korea also won an olympic medal. rishaad: there is no way of knowing what their gdp is. say they areould
9:57 pm
not sure. silver,e north won a men's weightlifting. rishaad: thank you very much indeed. talking about china's economic momentum in the next hour. ♪
9:58 pm
9:59 pm
♪ it is monday, august 8. this is "trending business." i hammer shot salamat. -- i am rishaad salamat. ♪ rishaad: right. let's have a look at what is really making headlines out there. asia-pacific up, the jobs report, the benchmark climbing 21% from the low in february. signs of stability? little change in july, as the pboc word through less cash in defense of the -- burned through
10:00 pm
less cash in defense of the yua n. for the stories, follow me on twitter. my hashtag. and wall street, for the -- -pacific reporter: yes, that stronger than expected nonfarm's number out of the u.s., some clarity, and we are seeing pretty close to session highs, the moving underpinned by that weaker yen and the stronger dollar. it comesarticular when to some of the japanese exports. about 8/10 of 1%. miners are liking. financial and consumer stocks up, and the kiwi dollar is up by about 7/10 of 1% today, the bank
10:01 pm
of new zealand saying that not only will be get a 25 basis point cut on thursday, but they two more rate cuts for the rest of 2016. here is what we see elsewhere pigot i have the numbers out of china, the shanghai numbers down, and elsewhere, the hong kong stocks, the hang seng. some good gains in southeast asia, as well, and jakarta is coming on line, about 3/10 of 1%, and we are getting export numbers out of the market closed today. they are expected to show extended weakness on the back of this china demand story that we have been seeing. taking a look at some of the big movers, gold stocks in australia leaving those losses. these are all folly as the question remains, has that gold rally come to end?
10:02 pm
we are seeing the strengthening u.s. economy coming into play. we are also seeing good gains when it comes to the iron ore miners. seeing those gains being tracked through in the australian session. now, let's look at where we are sitting in terms of the aussie dollar. as he said, it seems to be at a holding level at the moment. we are seeing a little bit of australasian ahead of the chinese numbers. bitre also getting a little of weakness in the asia session for gold, as well, although that has corrected and is looking pretty much flat at the moment. taking look at the japanese he seeingthe japanese yuan, greater losses down by about 2/10 of 1%, and the japanese yen, driving those gains in the tokyo market. we have got the summary of opinions from the bank of japan,
10:03 pm
showing very much a divergent set of opinions over the easy program and also the effects going forward, but it does seem to suggest, the bloomberg survey, that we will see further stimulus coming from the japanese central bank. it is up when it comes to this, about 3/10 of 1%, and that is really underpinning sentiment across the broader market. rish? pboc revealing fx reserves are little changed. this is ahead of the july trade balance numbers that are out a little bit later on today. hasing at the pboc, it earned more of its cash last month, certainly. that is rightd pew we are waiting to see what these come through on the terminal, as well. this is defending its and , andncy -- its currency
10:04 pm
the currency of course thanks to weakness in the dollar that really changed evaluations. down, 3.2 trillion, according to a statement released by the pboc over the weekend, and it is in line with the median estimate of economists surveyed by bloomberg. now, the stabilization to just the capital outflow has started to. there was significant strengthening of the yen and the july.n of course, haven demand really pushing the yen higher, and the pound is weaker by 9% against the yuan. to someone from commerzbank in singapore, and he said while the pboc may have intervened, it was not quite significant enough to move reserves. meanwhile, of course, we are waiting very much for the july trade figures that could point to further stabilization.
10:05 pm
we are demand to exports to to otherirly tepid due global uncertainties, and the , $47.3 trade balance billion, from 48.1 billion in june. exports, and imports, as well, still sluggish, the survey showing that they will have fallen 7% in july. now, the weekly one should have boosted competitiveness, but this is following the brexit vote, which is likely to have had an impact. and they are heading for a fourth day of declines today. rish? rishaad: thanks very much for that, juliette. the stimulus program, looking to stick with negative rates, and 2% inflation could be changing, as well.
10:06 pm
editor joins us from tokyo. tell us more about this survey. reporter: well, the survey is showing that 22 of 33 economists that we spoke to think that the review that would be happening at the september meeting means there is a much greater likelihood or a likelihood of further easing, that they think the fact that this review is on the table means that they will take further easing action at that meeting. ] welcome let's have a look at the opinions. those that actually proper these opinions. opinions. these jodi: the summary of opinions is something that the bank of japan provides, one member thinks this, one member thinks that,
10:07 pm
and what we heard in the summary, they think that -- one thinks that -- these are not identified. one thinks that the boj has or will soon could reach the limits of its program. one thinks that the review that is important to do a review as a policy, and and other things that things -- these could be the same people. it is just one number. forgs that the timeframe reaching that goal needs to be discussed as part of the review. that will happen at the september meeting. more detail, what do the economists expect? what do they want, as well? di: those we spoke to think the review makes easing more likely, and also, the timeframe for reaching the 2% inflation target, the two-year timeframe needs to be deleted or changed. more than two thirds of them said that.
10:08 pm
then another question we asked think28 of them of the 32 that there will be the negative rates that will be kept in effect, that the negative rate will not be changed, so there is a lot of thinking that easing will continue and that this review makes that even more likely. rishaad: thanks very much for er in tokyo.chneid other stories we are following looking atvid is this. what used to because the developer and bank of singapore. david? david: 1.6%. of course, releasing second-quarter earnings on monday, and profit fell 6% from one year back, so we are talking 780 million u.s. dollars. this is the story. first, we are looking at a core out ofs, and analysts
10:09 pm
singapore describe it that the core business did very well, quite strong, that income is up 5%, and then commission income, which is part of the business, smaller, up 8% there, and that interest margins expanded slightly to 1.87% from 1.75% a year back. now, another part of the story which is garnering a lot of attention is this $110 million , the bank appearing to cover their exposure here. there is a company that provides engineering and construction services in the oil and gas millionso that 110 dollars accounts for part of that. this is to have times from a year back. now, they already flagged this and said that the bank will only be able to recover half of the exposure. not bad, but not really.
10:10 pm
not really that good over five years. all right, other things to talk about. the sunday times reported that the company is looking to buy a group, possibly making a bid for seven billion pounds. that is just over $9 billion. now, they have responded, saying it is not true. we reached out, and they declined to comment. now, there has obviously been a lot of speculation about consolidation in the hotel sector. lots of deals, of course, back in march, when another drew their bid for starwood, and we know how that ended up. this is a marriage that is not happening at the moment. all right, let me just wrap things up you are a we are watching shares. very, very closely this monday. we will talk about this in just a moment, but have a look at this. the shares are basically poised to go off a cliff.
10:11 pm
we are talking about a drug failing to pass a lung cancer trial. this is a 20% drop from the last close here. muchl not get into too detail, but the drug basically failed to meet the primary goal of lengthening the survival, and a specific tool of patients. now, nomura had an outlook on , -- this stock, and they said it is not going to affect it. we showed you earlier, another japanese pharmaceutical company that basically makes the rival drug. now, have a look at this. bristol's wickmayer's. squibb.ol-myers it plunge the most in 14 years.
10:12 pm
now, just to clarify, and let me be clear of this, it is approved in lung cancer treatment, but not as a first-line therapy, and that is really be huge opportunity when it comes to cancer drugs. rish? well, coming up later on the show, the warren buffett $5 billion profit, a discussion behind the berkshire hathaway klein, and in the company of the chief china economist and what it is like for future policy. ♪
10:13 pm
10:14 pm
♪ right, you are back with "trending business," as we have a look at the business news. investigation into alleged fraud and bribery and corruption at some of the consultants, informing credit
10:15 pm
agencies of what it called misstatements and omissions regarding contractors in some export financing applications, with an internal inquiry. and finishing a review of last week's $70 million hat, slotted 36% of its deposits. opening again with limited functionality in the next day or two. and they halted trading and deposits. by down and quarterly profits at takata tumblr, related to its faulty product. they have yet to compensate carmakers for the repair costs for the profit forecast for this fiscal year.
10:16 pm
surging by the most in two months in tokyo. we are awaiting trade data out of china for july at any moment. a chief china economist at ubs is coming in. , it might for this come out while we are talking, but the fx reserves. they point to stability. did that surprise you? this cash that china has? no. i think since january, when everybody was panicking, and the government went under tighter control, but also, china has been lucky in that the u.s. economy was not so strong, and the u.s. that has become much , and the dollar has weakened with the expectation of depreciating. it has faded. rishaad: right. how does that get reflected in
10:17 pm
your trade view? playing at what the exports, we are seeing them kind of ratcheting lower. but it is, again, stabilizing. wang: yes, the second quarter exports is improving to about positive 5%, compared to the negative or close to zero in the west quarter, so for july, are expecting -2%, -3%, and there are also some positives. i think the nominal weakness in exports is largely due to global demand weakness. behaad: deterrence he should helping, to some extent. wang: yes, the depreciation of the trade weighted exchange rate and currency is moving along with improvement in the u.s., although i think it is still too
10:18 pm
early to see how much it is helping. rishaad: further weakness for the renminbi? they say possibly it is something that the pboc is not likely to go below. wang: we think it is 6.8% that they will not go below. six point 7% is probably a temporary threshold at some point before the g-20 finance minister meeting. and then the g 20 summit in early september, but i think what china has been trying to do is to show that there is actually two way volatility. it weakened again by 200 basis points today. it when the dollar weakens, it can be relatively stable. right.: with what is going on, 6.8 -- right? we got that. but would that set off any alarm bells in your view?
10:19 pm
complaining about china and labeling the currency as a manipulator, as they have done in the past? those cries have been relatively silent this time around. been, i think, because there are other things going on elsewhere. it is the big move in the euro and so forth. however, with the u.s. elections heating up, i think people are very much focused on -- theaad: we know one of candidates will certainly be going on about it. will yes, many politicians be wary of the number, and that is why we have 6.8. like when obama came to power. right.: talking about reform, structural reform, in china being important, and very important for the currency. what would be on your shopping list, and what would be at the top of your agenda?
10:20 pm
wang: i think at the moment, the most import thing to help with market confidence is reform, especially the part about getting rid of excess capacity and to let some closures happen, some backups these happen and write off their debt. even the politburo on july 26 big knowledge reform, structural reform, it is a key to market confidence. i think for exchange rates and also in general for the economy and this doc market. -- with the stock market. rishaad: with that in mind, you could see some of this happening behind the scenes, or you cannot see it because it is happening behind the scenes. is that right? it has picked up since may havene, and i think they to pace, and they have a target to meet this year as well as the next year. we actually see some reaction. a little too
10:21 pm
optimistic of a reaction, but we see them all running. part of that is a prediction that supply-side reforms are going to be effective. really quickly, does this change anything? tao: not in any real way. i think, yes, the decision was already made. rishaad: it is a done deal. deal, but in done practice, it will be included in october, so you can, i guess come up with a period at that episode, and china, of course, has tried to open the domestic bond market quite significantly at the moment, but i think investors are still wary about where the exchange rate will be somelso may be wary about of the domestic rules. they are afraid of rule changes,
10:22 pm
so they are reluctant at the moment. rishaad: tao, thank you. and policy decisions losing their impact. ♪
10:23 pm
10:24 pm
♪ you are back with "trending business." i am are shots salamat. salamat.d rates? reporter: we have got a few options on the table, and we will get to that in a moment, but yes, cutting rates to one and a half percent, and we saw a real-world example exactly of what they are talking about, that the banks failed to pass this on, and instead raised
10:25 pm
interest rates on term deposits, and you're quite right. themeserve bank has warned in the past, and these cash rate cuts, rish. rishaad: what are they saying, paul? well, there is a risk, and they say that the rba is becoming a bit ridiculous. they expect the rba to react to the week cpi with the the last two cuts that have come on the head of deflation. the next one is in about three months' time, and they say they are going to cut again, but andrew put it very well when he's that i believe zero in that will come from this latest cut -- when he says that i believe zero is what will come from this latest cut. rishaad: they were asking them to undertake it.
10:26 pm
paul: this topic has been coming up, but they were talking at the risks of the aaa rating over the weekend, saying it will be difficult to maintain this rating under existing circumstances, saying that the job would be easier. it is not looking terribly likely anytime soon. the election delivered an even more divided situation. problems there. he has got australia on a negative watch for a reason, it seems, rish. indeed. paul allen there. let's take a look at tokyo as we head towards that lunch break, of course, three or four minutes away from that. naked 225 higher, the hang seng with similar strong gains -- the nikkei 225 higher. the jobs report beat everybody's , and this is down
10:27 pm
by about 2/10 of 1%. and issuing an ultimatum to vigilanteicials with killings. we will take you to manila for the details. ♪
10:28 pm
10:29 pm
♪ asian equities heading towards a one-year high after u.s. jobs data lifted american equities and the dollar on rising expectations of a federal reserve hike this year. the kiwi dollar losing ground, crude oil near $42 a barrel. china capital outflows east, the $3.2 trillion foreign-exchange reserves.
10:30 pm
in june, the figure rose by $13 billion. today's numbers are in line with estimates. , a losssplays tumbling $1034 million, guidance million profit, lower lcd sales. japan displays says it is not the source of report that it may seek support from a leading shareholder, icj. regional equities on the up. story of tells the rising risk appetite in this market, global bond rally continues to unravel, a number entities seeing downside today. 20 year and 30 year, all hitting
10:31 pm
highs. the 10 year potentially turning positive. the yield on 10 year spiking nine basis points. we are also seeing short a thames turning as well. that is painting the other side of this risk rally, investors embolden by the stronger than expected nonfarm's payroll number. this is what we are seeing. tokyo shares closing out 2%, close to session highs, underpinned by the yen weakness we have seen, the bounce and the dollar providing breathing space to japanese exporters. looking at sydney stocks up gains for, strong financials and consumer stocks. southeast asia also involved in
10:32 pm
this rally, singapore up, good gains from hong kong as well. the hang seng up 1%. shanghai flat, off earlier lows. tie one tepid ahead of export out after markets we are waiting for that data from .hina we are expecting imports and exports to can you decline at an east pays. later this week, further data from china domestic activity indicators. as well as key credit growth numbers, telling us whether this stabilization is not on account of authorities having more money into this economy. this is what we see and terms of they arency front
10:33 pm
seizing a downside of a 10th of 1%. some swings and the session so far as we await china data. the aussie sensitive to that. the chinese currency seeing downside after the pboc set it weaker today. we are also getting support in broader market sentiment. crude looking like this. up 3/10 of 1%. gold, a one-week low, although we are coming off that a little now. gold stocks amongst the worst a decliners. evolution down by close to 6%. this is another stock sensitive
10:34 pm
to the fortunes of china, blackmore, they make vitamins, organic vitamins, and other products. 9/10 of a percent. rio tinto, bhp billiton, up right 2% -- by 2%. this is how we are looking in terms of the regional markets, a nice rally, shaping up. seemingly investors pleased with a little bit the clarity, the nonfarm jobs report from the u.s., a sign the economy is doing better than expected. risk appetite returning. sign of a stabilization. pboc confirming reserves change little. having a look, kicking things
10:35 pm
off, look at trade figures, show , don't have yet, have we? >> we are watching those to come through. stabilizationng in the world's second-biggest economy when numbers come through. tepid for exports remain amid global uncertainties. the overall trade balance at $47.3 billion from $48.1 billion from june. exports fell in june, down 4.8% come expected to be further downward pressure, down by 3.5% according to the economists we have surveyed. imports were expecting to a fallen by 7% in june. the weaker yuan should have boosted competitiveness, but the blow to global demand following the brexit vote is likely to have had an impact.
10:36 pm
china's central bank turning through its cash pile last month to defend its currency a head of its inclusion into the currency basket in october. also, thanks to weakness in the dollar. to 3.2rves edge down trillion, according to a statement over the weekend. in line with what the market is looking for. reserveslization in fx suggest capital outflow pressures have east. there was significant strengthening of the yen and the euro in july. haven demand pushing it higher. it is up 21% year to date brexit the renminbi, the vote pushing the pound down and the euro higher. we spoke to a couple of analysts
10:37 pm
, including commerzbank in singapore, saying that pboc may have intervened last month, but it was not significant enough to move foreign reserves. we saw that was quite a big stabilization in terms of fx reserves. still waiting on these figures, the survey expecting $47.3 billion trade for july, so pretty stable, down slightly from the june figure. rishaad: thank you very much indeed for that. let's have a look at other stories we are following. approve a new to constitution they say hands the military government too much power and restricts civil rights. official results are not expected for several days, but it has been supported by 62% of voters. the resultsaying keeps highland on course for a return to full democracy. issued a formal protest after chinese ships entered waters around islands
10:38 pm
claimed by both countries. to vessel sailed close to the chain in mandarin. the foreign ministry summoning the ambassador for the second time in three days. claim 230fficials chinese fishing boats and six coast guard vessels were in the area. opec nations he little hope of resurrecting a global deal to freeze out, saying there are no plans to revive the agreement with nonmembers after talks were aborted in april. the cartel is scheduled to meet next month. the talks collapsed after saudi arabia insisted that iran join pact. iran ruled out a freeze until its output reaches the sanction levels. has stepped up his campaign against drugs, accusing current and former officials of involvement in the trade. let's get over to the philippines. what is the president saying here? quite simply, he is saying
10:39 pm
the drug problem in the philippines is no longer at crisis proportions, but has become a pandemic, and he needs to do something right now without waiting for the judicial process to kick in. than 150 niness judges, lawmakers, mayors, military personnel, and police officers, some former, some current, named by president rodrigo duterte over the weekend on national tv. he has ordered the gun licenses of those on the list be canceled and security exports be withdrawn. all the defendants were given 24 hours to surrender to the investigation or else be hunted down by the armed forces or local police. some have turned themselves in this morning. some spoke to the media first, but essentially everyone has come out to deny the allegations, saying they are worried about vigilante attacks,
10:40 pm
others saying they are just a victim of dirty politics here. usingd: he is presidential immunity, isn't he? that is something that quite often makes you a few enemies. >> absolutely. this or that assassination plots before, and him being himself, he said, look, i'm not scared. i will go ahead and do my job, and this is the way forward for the philippines. the first pick problem this time around for human rights advocates is that your akoni and theby -- the tro coney in the way they were picked up. he describes the licenses being canceled. he says go out to the world and show how crooked you are,
10:41 pm
addressing all these suspects. the other issue is that the full list of seems to be working off of raw data. some of the names are incomplete, meaning they are lacking first names, just the affiliation or location, which puts a lot of those people who have similar names at great risk. to havee who was presided is now eight years dead now. the president himself he may or may not have gotten all of the names right, even though they were revalidated a couple of times, and that's causing quite a bit of confusion as well as discontent over here. rishaad: there's a lot of popular support for his tough stance. what are the critics making of all of this. ? been addedics have as well, certainly that image of the woman cradling the body of
10:42 pm
her fallen partner that went viral, that is something used as leverage. both international organizations, international media, local organizations have pounced on that and use that as reason, but, look, there is only so far they can go. we do know at this stage that some of the lawmakers are trying to sort of reason with the we should saying allow due process and the rule of law to take its course, charges must be filed if there is evidence, and all the accused must be given the opportunity to defend themselves, exactly the words of the chairwoman of the philippines commission on human rights. basically all the critics calling for checks and balances here. rishaad: thank you very much. joining us from bloomberg tv. going for gold with a record number of chinese athletes, the
10:43 pm
growing influence of beijing on the olympics. ♪
10:44 pm
10:45 pm
♪ a quick check of the latest business flash headlines. wins a lawsuit. he sued after he was sacked. he says his bosses made him a scapegoat. a spokesman for the bank says it is disappointed with the judgment. walmart aiming to close a $3 billion acquisition, sources telling bloomberg that walmart once the founder to head the online division as part of the acquisition, helping walmart to challenge amazon.
10:46 pm
nissan was one of the earliest proponents of electric vehicles, said to be talking to panasonic to sell off its battery division. nissan plans to dispose of its stake. nikkei news says automaker is in talks with companies outside of japan, including chinese companies. a spokesman says the reports are mere speculation. olympicsup to the rio was concerned about zika. china has long used for to highlight its soft power. it could be the savior of the games if it so chooses. adam has written about this today. how can china stop the erosion of the olympic brand? it is like a death by a thousand cuts. >> right. there are a couple of approaches they can take it one which they
10:47 pm
started taking last year when they agreed to host the 2022 beijing winter olympics, committing to spend less, making this a less grandiose investment in real infrastructure. making use of venues they already have. they have the ability to start cleaning up the doping problem, which we know because of the keynt russia scandal, a thing to make the olympic image improved. nature of its governance and the fact it has a state run athletics program would be in a position to implement biological passports. instead of requiring athletes to be tested for drugs in their system, this is a system that variables and the bloodstream and watch how they change over time. this has been tried in cycling, track and field, and it works well.
10:48 pm
china could mandate it for all athletes. is chinathe thing being a force for good goes against its background. exactly nott been suspected of having doping issues. >> that's exactly right. is history of chinese doping the history of their involvement in the olympics dating back to the mid-1980's. somee 1990's, they set incredible track records, and then those athletes disappeared here it in the last year, we found out they were doping. the chop chinese male swimmer who won a silver medal the other night was found doping in 2014. in that sense, china has not been a trailblazer, but for them, these kinds of problems are actually political. for china, the olympics are all about comparing it self to other
10:49 pm
countries. they see it as cheating, that political usage of the olympics falls off. in the last year, china is starting to take this more seriously. last september, they agreed to engage in cooperation with the wada to shut down producers of anabolic steroids in china. china is the largest producer of powders that are anabolic steroids. the fact china is willing to collaborate shows political movement. they are willing to accept that their image is being damaged by the doping problem and they will move on it. is that adam, the thing it is very important for china to use this form of soft power. way ofve almost a unique using sports in this manner. >> they absolutely do.
10:50 pm
one of the things we talked is the personiece who won the 2004 gold-medal in hurdles in athens, completely unexpected, after he won it, he referred to the victory for yellow people, that they can do the things that around and white people do. unique way of looking at the olympics, but for china it is a way of comparing its national rise to other great powers. that can sometimes be racial, political, but in so far as doping undermines that message, that chinese people, asians are not competing on a level playing field hurts them. so there is a real interest in leveling this out and improving that image. rishaad: thank you very much indeed. we will stay with the olympic look at another way of tracking success in the games.
10:51 pm
bloomberg has its own medal tally. david: we are still using the , but doing anls adjustment to show that bigger and wealthier does not always lead to success. when you run the function, you get the screen, number 10, our bloomberg medal tally. down, you typically still have the usual medal tallies, gold, silver, and bronze. there we go. there we go. we have added a few things here to make it more equal for the smaller countries. if you scroll down and have a look at medals per gdp. you take the number of the medal s, the size of the economy, do some simple math, and come up
10:52 pm
with a metric. at the moment, the leaders are kosovo and north korea, very small countries. kosovo just one a gold, north korea won a silver in men's weightlifting. the other thing i want to mention. so for the moment of these olympic games, have a look at this, making its rounds online and social media. two gymnast from the north and the south caught taking a selfie together. retweeted over 15,000 times. it is what the olympics is all about. rishaad: thank you very much indeed. coming up, smiles at berkshire hathaway, warren buffett big second-quarter numbers. this is bloomberg. ♪
10:53 pm
10:54 pm
♪ rishaad: you are watching "trending business". i am rishaad salamat. berkshire hathaway profit rose 25%. berkshire hathaway posted numbers in a statement released from 4.1, $5 billion billion dollars net income from a year ago, a 25% jump in profit. income from manufacturing services and retailing climbed
10:55 pm
from 14% to close $1.5 billion. precision and/or sell really paid -- duracell really paid off. it was amiss. 2803 per share versus the 2911 estimate. how berkshire hathaway performed, the shares are up 10%. its insurance base of portfolio companies are under pressure. rescission cast parts, help to boost the bottom line. geico was also a strong player, but a slump in a railroad and energy units, chemical units also, and insurance businesses took kids the wildfires in canada. versus rivals, they did ok. they posted an underwriting gain of 227. assetss of book value,
10:56 pm
minus liabilities, a strong point for the company, rising to 160,000 a share in june, a boost from 157,000 three months earlier. that's it for this edition of "trending business". "asia edge" is coming up. getting views on markets and which way they are going. the nikkei two to try concluding with a gain of 2% and some strength in hong kong as well as sydney. and singapore as well. this is bloomberg. ♪
10:57 pm
10:58 pm
10:59 pm
of the it's the middle middle of asian trading day. figures in china just raking through. live in hong kong, this is "asia edge." ♪ the top stories this hour, asia-pacific stocks climbed towards a one-year high, lifted by the strong u.s. job numbers. the dollar is higher since news the fed will hike. hong kong at the strongest in three month as we await the latest key trait developers.
11:00 pm
survey the same, a expects the bank of japan to step up its stimulus program. the emperor of japan preparing for his second ever national address, amid speculation that he wants to abdicate. we will be live in tokyo. china's trade balance out, we are taking a look at the figures. ofan absolute bait in terms the trade balance figure. the trade surplus coming in at 340 at 2.8 billion yuan. do the math, that is $51.5 billion. the market was looking for different numbers. that is better than what we are expecting. a big miss in terms of imports, which were expected to fall by 1.1% year on year. they are down 5.7%.


info Stream Only

Uploaded by TV Archive on