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

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♪ it is wednesday, august the 10th. this is "trending business". i am rishaad salamat. ♪ rishaad: right. taking you to melbourne, sydney, and singapore this hour. asia-pacific equities falling from one year highs, regional benchmark retreating, haven assets extending gains, oil falling once more. to energys exposure and cheap oil, thousands of jobs linked to the sector, spending is falling. happier meals at mcdonald's
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japan, pokemon go helping the chain snap its losing streak. do follow me on twitter at @rishaadtv and use #trendingbusiness as well. ,aipei, kuala lumpur, singapore a start to this trading day. , somef these newcomers momentum to the sluggish start. it is welcome given this tepid start. a steady session in the u.s. overnight that hasn't carried over to asia. take a look at the open, singapore playing catch-up, offer the day for the national day holiday. analysis to suggesting singaporean banks following the selloff on the back of the dbs
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report, looking the cheapest. malaysia down a quarter of 1%. elsewhere, australian stocks down by point 5%, extending losses, close to session lows. we had a spike in the aussie dollar, seems to have broken through. elsewhere, japanese stocks getting pushed down by that stronger yen. we had a two day retreat, but money flowing back into haven assets, gold, yen, and government debt. thee stocks weaker ahead of rbnz decision tomorrow, with a rate cut bait 10. baked in.e data -- it's not that the klein we saw in the previous two months, coming in stronger than
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expected, but ppi suggesting deflationary effects are continuing to way, flat in july. let's look at movers we have been washing in the session. we are looking at australian banks, results coming through, a positive report, australia's largest lender, a record seventh year of higher earnings. that hasn't an interest investors. elsewhere, anz extending on its rally from yesterday, nab getting some of that shine as well. these are some of the movers. cutting its full-year net income forecast, citing stronger yen and concerned that the flow of terrorist from china coming into japan and appetite for its beauty products could be waning, down 10%, the biggest decline since 2008. 2%,nald's, down about
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reporting better than expected , profit upsults after seven consecutive quarters of losses due to pokemon go. that stock is in a correction mode after surging 25% when it announced that collaboration with pokemon go. we are seeing that stock lower in the tokyo session. samsung getting very close to set ing record highs january 2013. it has come off a little bit today. still, we could be hitting a new record high for samsung electronics. rishaad: we have shares of commonwealth bank as we saw down in sydney.hidde a strong result, but indeed a slight miss none the less and a
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slight move to the downside as well. paul: that's right. the bar is set incredibly high for australian banks, cash up 3%. yet, 50 million dollars short of what the market was expecting. never mind a record profit for a seventh year and a row. it is driven by growth in small business and consumer lending. the retail and business banking 4.4 billion. the bank itself notes that the environment is getting tougher, weaker demand, strong competition, increasing regulation. part of that regulation has seen all of the banks required to carry more capital. the banks to your one capital ratio 10.6%. it has been hit by loan impairments, bad debt charges up 27%, $1.4 billion. interest margins also shrinking
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two basis points to 2.07%. the dividend came in as expected, two dollars $.22, but the shares drifting sideways right now despite that record profit. oz minerals, how did they get on? we have the chief executive on and about an hour and a half. can shed more he light on it than i can. the profit down 43%, hit by a big charge, $24 million to settle a class-action suit 2008, all toack in do with how the company itself was founded, so that is out of the way, profit $29.5 million, revenue up 1%. net cash balance, $564 million, gold outputecting
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to increase by 2019 to between 150,000 ounces 260,000 ounces. rishaad: a lot going on in australia. tell me about clint stevens? 10 years at the helm. i think he has been getting good marks. paul: yes, he does have good reviews. most of the attributes in the media have been overwhelmingly anitive, but it has been interesting ride for a man who calls himself the most boring man in sydney. you don't want your reserve bank evan are to be too interesting, do you? the feeling is we will get a backward look at the past 10 years in charge, and glenn stevens will want to avoid printing anything the incoming governor might want to do. rishaad: that is paul allen.
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executive willef be a long later. right. sagaber socce is making banks a bargain by. some are indeed seeing an opportunity here. juliette: certainly. 's credit issues emerged in july. dbs lost $2.7 billion in market value. at the chart, singapore bank stocks trading cheapest since the financial crisis. ,bs down 10% year to date lowest level since january 2013,
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relative to the msci asia-pacific index, 0.9 times asset. ocbc down 3.5%. most of the bad news is priced in, so we should be looking at lying. banks are strong and valuations reasonable, decent dividends. they will prove resilient to debt exposure. fair chunk ofs, a bad news is priced in. the exposure of these lenders to energy related companies that is the chief cause of concern, cutting spending, and that is something that people will say will not return soon, right? right. it is too early to knebel on
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these stocks. default in the energy sector is nibbletarting -- to on the stocks. default in the energy sector is just starting. the sector accounted 6.9% of singapore's manufacturing output last year. it is also the largest oil trading hide and the world's two biggest oil rig builders are singaporean. both companies reported significant net income, so issues in the energy sector will have a knock on effect on the broader singaporean economy. dbs losing .5%, ocbc making gains. rishaad: let's look at some other stories we are watching for you today. it is the magic kingdom and focus first. david: or the happiest place on
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earth. disney earnings, before the theme park, pretty descent thanks to the box office unit, third-quarter sales and profit forecast that beat estimates, following strong results from those titles. they are all sitting the slower growth in consumer products and tv, where losses continued. the studio entertainment unit is the only business unit to have beaten revenue expectations. i also want to mention when were talking about newt is that bob at filming for th the eighth star wars movie has wrapped up. mr. eiger was pleased to say that the disney shanghai has over one million visitors. estimates, but were guessing on how we would do
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because it is a brand-new product in a brand-new market, but we are extremely pleased with what we have seen so far, well over a million people have visited the park, and the prospects for this business look strong, so much so that we have already broken ground on expansion. i was looking at the disney lamp in the background, very nice. bankkong, former deutsche trader suing for unfair dismissal. he sang the payments they got him fired were approved by top managers according to internal documents seen by bloomberg. there were two list that contain false information which resulted in payments. he says senior executives, including the current head of global markets for asia and the coo of the unit were involved in approving those lists. responded and said
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the information provided to bloomberg was actually incorrect, out of context, and provided by somebody who has little knowledge of what is going on. the bank has no more further comment at this point and has rejected those claims in court. a bit later on, we were supposed of an electronic casino operator, but it has asked for its shares to be suspended from trading and manila, and it has been confirmed or will be no trading until september 1. shares have been whacked silly, the share price, just over four pesos. that operatesany and manages electronic and see nose. it is -- electronic casinos. that contract ins today and the government has said it will not renew or extend it. in fact, the company has said it will start winding down its operations. the company plans to meet the
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head of the gaming commission and will be sitting down with shareholders tomorrow 4:00 p.m. local time in manila to discuss its future. the background is that early july, the new philippine president ordered a stop to online gambling, so we have the x german of the company -- the ex-ast week chairman of the company resigning last week. sayaad: find out why they it is the perfect time to be investing in the city startup scene. the global stimulus will give a boost to commodities and emerging markets, we will hear from ig markets in just a minute. ♪
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♪ rishaad: well, a look at
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asia-pacific and what is going on as far as stocks go. yearreat from almost one highs, emerging-market stocks extending their rally. improvement in chinese data suggesting stability out there. let's get to melbourne and the take of ig analyst. what are people asking you these days? a toe back andg markets? is confidence returning? that we saw such a big rally post-brexit in expectation of significant new monetary easing and fiscal easing globally, and many of these expectations have steadily been accomplished. we have seen monetary and fiscal easing out of japan, monetary easing out of the u.k., and likely we will see a bigger fiscal package announced with
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philip hammond's autumn statement. there is the prospect of further stimulus from the eu and likelihood that china will will have to stimulate strongly to growth targets in the second half of the year. that scenario, commodities compelling, as do emerging markets, bond yields are pushed down by respected easing programs across europe, japan, and in the hunt for yield and the bounce and commodities all makes emerging markets look compelling, as well as a range of material companies as well. rishaad: when you look at relative valuations for europe and the united states, emerging markets become that much more interesting to look at. >> certainly, certainly. markets, someging of the biggest gainer so far have been argentina, brazil, verying the year off on
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low valuation terms. of course, still a lot of uncertainty as to how those economies will play out, but the toire for yield and the hope find a reasonable place to has seensome funds rallies in those downtrodden emerging markets as well. rishaad: tell me about your thesis when it comes to the aussie dollar. you are seeing positivity, testing $.78, and the rationale being if the rba cuts further, it will not make a difference, but it would even come across as background perhaps of a strengthening u.s. dollar here, so what gives? thatthink the big story is domestic factors have had much less impact on how the aussie dollar trades. we did see the rba cut rates last week and have a minimal and temporary impact on the dollar,
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then it started rallying up again. andin this global monetary fiscal stimulus framework, that is very aussie-dollar positive, the rally and commodity supports the aussie dollar, and the hunt for yield seize funds flow into australia despite an easing buys from the central bank with the possibly of one or two more rate cuts in the next 12 months. even then, all of that seems to be supporting the dollar, the hunt for yield and expectations haitians of further gains in commodity prices, all likely to see the aussie dollar retest that key $.78 line of resistance. rishaad: you are saying a couple more rate cuts. before we come to that, what himself,nn stevens
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what is his legacy? >> i think it is a solid legacy. he steered australia through the gsc. longesta now has the record of any country in the world for going so many years without actually experiencing a recession. a small part of that is down to his work as governor, but i think we are starting to head into different territory with more difficult times ahead, and even though philip may be more hawkish, no one would say that glenn stevens was a dove in particular, but the direct effects we are having particularly with regards to australian inflation and the ongoing weakness in wage inflation is likely to see some further rate cuts, and perhaps even the possibility of quantitative easing in some form. rishaad: angus, great talking to you. have a great day. we have to take a break.
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up next, how chinese banks are getting a boost from outbound mergers and acquisitions. the details are coming to us live from beijing on that this is bloomberg. ♪
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♪ rishaad: you are back with "trending business". i am rishaad salamat. let's have a look at chinese banks as they wra ramp up m&a activity. this is according to data we have compiled a bloomberg. let's find out more on this. tom, why is this happening now? it is partly down to the lack of investment opportunity here in china for the country's banks, but also linked to this chinain m&a deals from corporate. outbound deals died at $157
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billion so far this year, compared to the record last year of $109 billion, underpinned by government encouragement, policy, to go out and buy assets , and that has a knock on effects for fx and the country's banks. a 4.4%ve carved out stake in the market for deals,ted loans for m&a compared to 1% last year. rishaad: bright. china'salking about biggest vendors, or are the smaller banks getting into the action? it was the top-tier banks that used to lead the way on financing, but we have seen second-tier banks starting to play their share, take heart. one example is china pacific bank, helping with the financing for the 43 billion dollar takeover, pulling together a
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loan of $4.7 billion as part of that. forysts say this is a way second tier banks to grow their business in china and abroad, but also to grow the investment banking arms of their businesses as well. rishaad: now, let's talk about m&a financing in a global context. where do chinese banks fit into all that? even the top-tier chinese banks have some way to go. they have made up a lot of room, but have catching up to do, even the bank of china, ranking only , butmber 24 outbound m&a in terms of the context of china banks and efforts to grow their footprint abroad, they are opening up more offices, even second-tier banks, in offices like london to provide services. china's corporate start increasing the -- are
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increasingly looking to chinese banks for financing. rishaad: right, let's tell you about what we have on the way. mcdonald's japan with its first courtly profit in more than he year. how much of that is down to pokemon go? ♪
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♪ rishaad: well, asian stocks falling from a one year high, japan leading losses, haven assets extend gains. mining in health care taking a hit, oil slipping, increase in u.s. stockpiles, dollar down for a second section, increasing the possibility the fed will raise interest rates in 2016, stocks below 50% there as well. bankshares dipping after record cash profits for a seventh consecutive year driven by higher earnings from its retail division, cash profit just shy
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of the $9.5 billion level. annual profit growth slowest since 2009. bad debt charges jumping 27% on exposure to the resources industry. disney beating third-quarter sales and profit estimates. offsetting a slowdown in television. bob iger says one million people visited shanghai disney, expansion plans under the way. we will hear from him later in the show. hong kong, strong session for chinese stocks on tuesday. are we seeing a followthrough in this rally? seeing some strength when it comes through the early minutes of the session in hong of 1%, but some weakness at the open. we are waiting for the next
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china data to drop. we are getting everything from foreign direct investment to money supply, credit growth, key thisking a look at whether economic stabilization we have been talking at length about, how much is still driven by money pumped into the chinese financial system by the authorities there. elsewhere, australia, sydney stocks down .5%, expecting the rba governor to deliver his swan song speech in a couple of hours , so we are seeing a little bit of risk aversion ahead of that. also spikingllar this morning. the nikkei 225 down, a couple of strong sessions and gains, so giving goes back a little bit for the first time in three days. underpinning that risk aversion, we do have a stronger yen, which is started to come up again after two days of retreats. gold is up, government debt up,
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japanese yen as well. new zealand, kiwi starks down decisionting for rbnz to mark, 25 point base cut baked for 50 some calling basis point cut to make a point to the markets, so we will seek whether we get that through or not. korea, pretty flat at the moment, weakness coming through malaysia, down .25%, singapore stocks playing catch-up. the national day holiday there. let's take a look at the fx space, a surge when it comes to the taiwan dollar, back in favor with asian investors. we had a strong import-export number from taiwan. that is attracting the bulk of the regional inflows. risk this is where aversion haven buying is coming in, coming off lows and looking
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4/10 of 1%, oil lower, one report suggesting the supply glut will continue. expectations ahead of that in formal opec meeting in september, knowing expecting a supply cut to be much of a function of those talks. i look at the aussie dollar, looking like this, up 3/10 of 1%, that level looks like it could get broken. one stock we are watching is samsung electronics, it hit its record high in january 2013, eating very close to breaking that threshold and hitting a new record high. rishaad: thank you. let's have a quick check on mcdonald's japan, shares on the down by 1.3 percent, declining
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market, profit in the second quarter, broke its streak of seven consecutive losses, going to the numbers, a hawaiian inspired burglar and pokemon go, -- is it better to travel than arrive here? a lot of promotional items getting customers through hawaiian inspired berger, american barbecue chicken. million,e of $2.9 sales topped $500 million for the first time in two years, same-store sales up by 20%. mcdonald's japan will pay shareholders an interim dividend of ¥30 per share, and leaving forecast unchanged. one analyst said the worst is over for mcdonald's japan, the ceo saying they are in a vastly
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different position than a year ago. 2014, 2015, a lot of food scares for mcdonald's japan, causing more than 100 stores to close. only reallyemon go got going in japan a few weeks ago, so does that have anything do with these results? juliette: nothing to do with the second quarter because it did not launch until july 15, but we did see a huge spike in july sales, up 27%. mcdonald's has created a number of elements that should help in the third quarter. you can see the white line here is nintendo. the yellow line is mcdonald's japan. there was a big spike up in the correlation of share price when pokemon go launched in japan and tied up with mcdonald's. that has been all but wiped from the share price. one analyst says the pokemon go business is helping to drive some business in mcdonald's
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japan, but does not fundamentally improve the outlook for the company. rishaad: anyway, thank you very much indeed. right, a look at the chief executive of disney. weeks after the opening of doors of the theme park there and , bob eiger says things are so good that there are so good that they're already looking at expansion. >> it is one of the most important steps the company has taken, one of the biggest investments we have made outside the united states in the most populous city in the most populous country in the world. mewas a 17 year journey for from the moment i stepped onto the property to when we cut the ribbon, so i was quite involved. large, built something complex, unique, in the sense that there is a lot of original product in shanghai disneyland. it open flawlessly.
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the reaction in china has been great. the visitation has come from all over china. it is taking great advantage of shanghai as a tourist destination, particularly in the summer. awareness is extremely high. people are staying about to longer as per visit than we expected. that people are enjoying the product a lot, and the per cap spending is strong. we had estimates, but we were just guessing about how we do because it is brand-new product in a brand-new market for us, but we are extremely pleased with what we have seen so far. well over a million people have visited the park since it opened, and the prospects look really strong, so much so that we have already broken ground on expansion, feel great about it. us some advice. we talk a lot about china and ,oing business with china western companies, u.s. countries in particular in china. you spent 17 years and have had a lot of success with working
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with the most senior leadership in china. other companies have had a tougher time. what advice do you have for others who want to do business in china? you know i have thought about that question. i have been asked it a few times. it is not an easy answer, because a notch or any two situations are the same. as a knownchina entity in china, not only a trusted brand, but a trusted company. it took a tremendous amount of communication, candor, patience, perseverance, tenacity. there were many times when it would have been easier to fold our 10th, it will take too long, too hard, but we did not do that because we truly believed in the market and believed in how our product would perform in the market, so we never back down. we created a tremendous rapport
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with not only our partners, but multiple segments of the government from beijing to shanghai, and ultimately build up a trust with a believe what you are saying because you are speaking the truth and you have some faith in them. in fact, frankly, as partners, they have been great partners to us throughout this process, so my only advice would be that it is a big complicated market as anyone knows. has a lotrket that that does not meet the eye, in the sense that though you may expert, theren are a lot of surprises that come from a variety of different directions him and not necessarily good or bad, but they exist, and you have to have real patience and commitment to be there. i think the patients we showed paid off, not just because we hung in there, but we are respected for having that patients. it was not an easy deal to negotiate, and it was not an easy project to build, and yet our partners have been with us all along and i think we all
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feel great about not only the partnership we created, but the product we have created. right.: getting due to sydney, the austrian prime minister, malcolm turnbull, giving a news conference. it is about these allegations -- and we have the small business minister telling reporters that the data collected by the bureau there is secure. it was an online survey shutdown last night here at they were saying it was not an attack. nor was it a hack. it was an attempt to frustrate the collection of bureau of statistics census data. this is malcolm turnbull. >> thanks, prime minister. they have are to given a detailed account of events last night and this morning. the point i particular want to stress is that the senses is a
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critical collection to support economic planning, government policy and planning, not just by government, but by other agencies working out in the community to properly plan their services. that is why it is so important we are able to provide these assurances today and encourage theralians that as soon as website is up and running again that they can go and participate her. this process runs through the 23rd of september. people can rest assured on those issues. the other issue i want to assure austrians about is that there is integrityise to the of the collection of the census itself. there is no requirement or any need for any statistical reasons and credibility of those reelections for any rerun. that is clear advice by the
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statisticians, so the senses can as it always has, referencing a particular base, and i would remind people that the minister has to complete that form. there is the opportunity to do that, and that opportunity will be there in the not too distant future. integrity of the census itself has not been compromised by the events of the as the hours, just integrity of the data itself has not been compromised in the last 24 hours. the austrian bureau of an unblemished record when it comes to the protection of the security of that data, and that is a highly enviable record in the world today. they took every step last night to protect that. rishaad: right.
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that is the treasurer they're defending the bureau of statistics, saying the website taking this census was closed down, not hacked. people's details are indeed safe and the data was not compromise. well, we have national security concerns and a protectionist backlash preventing china from getting its hands on one of austria's largest electricity distributors. tell us about this dispute first of all. it's all about foreign investment, and specifically foreign investment from china to australia. fors a very perfect issue lawmakers here because foreign investment is so vital to the development of the country, and yet there is this protectionist
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backlash. of rules around ownership of residential property from foreign buyers, the largest cattle ranch in the country, the government blocked of that sale to a chinese entity, and now we're seeing it around whenever of the biggest electricity distribution companies. you just heard the treasury speaking just now. he has talked about national security issues, and he is the guy that makes the decision as to whether to allow this deal. certainly those comments about national security being his primary consideration have given some people the belief that the government will not allow a state owned enterprise to own these assets. rishaad: thank you. having a look at his concerns, protection is concerns, in australia. present,ike the venture capital firms pulling back on investment. we will hear from one singaporean firm doing quite the opposite. ♪
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venture capitalists say they are facing challenging times, something they regularly say. the report saying investment in asia down a percent in the first half compared to the same time last year. our next guest says now is the time to hunt for deals and take advantage of declining valuations. thank you for joining us. let's start off with what you actually do and what your investment philosophy is. >> well, thank you for having me here. we are a global firm investing singapore,globe, u.s., china, israel, sub-saharan india.
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i focused on southeast asian markets and information technology sectors. with that in mind, what is the next big thing? is there a trend emerging when you look at the space you are investing in? asia we in southeast believe there are a lot of opportunities in terms of the consumer tech sector and the financial technology sector, and also business to business software services sector, the three we see and southeast asia. -- in southeast asia. inhaad: you are an investor -- as well, correct? >> yes. sorry, i was going to ask you what attracted you to them first of all, how much you invested, what you are looking at in that space.
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>> well, we first invested the and the company three years ago. essentially a smaller company focusing on providing allowing people to book a cab in malaysia. we like him. he has had a lot of passion in the business. and with otherim people's money, we can grow this into a larger regional player. we reached agreement and started investing in the first round. then, the company has had many rounds of financing from softbank another people. terry on, sorry.
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-- carry on, sorry. , it is goodof uber news for the local players like ourselves toward didi. it shows in this business of shared economy, local knowledge, local capability is important. people like ddr able to di arete in the -- di able to focus on the region and dominate in the sector they are good in. rishaad: you mentioned local knowledge. you also mention anthony. he has been on this program. that thetant is it person who is leading the company to come to you and present? how important is that? >> i think it is very important. atently we went back to look
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portfolios that had succeeded and failed, and we can look at market, technology, but ultimately it boils down to people. i think he is a very important element in our valuation and analysis. we put a lot of investment in other people. rishaad: before we leave things, what investment have you made recently that you are most excited about? recentnvested into a financial one is technology company based out of singapore trying to disrupt the business using technology. we are transmitting cash across borders at a lower price and lower cost and reliability. this company is based out of singapore. interesting company.
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the singapore time in exchange, we invested last year, trying to disrupt the diamond industry and bring price transparency to the market. rishaad: thank you so much for joining us. up next, high tech in china, the details on the way. ♪
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♪ rishaad: you are back with "trending business". one chinese company trying to introduce a more hands-on approach to the classroom, willng ultimately teachers not exist. something we have to look at. virtual teachers, why do we need them? >> basically there aren't enough humans. rishaad: in china, there are. is harder andy it
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harder to convince people to take on the low pay and high hours to be a picture. rishaad: high hours? u.k., my mother would probably hit me for saying that, because they do work hard. essentially you need virtual teachers to train the next generation of people. there is coming a turning point when increasingly all of the india andespecially china, places where there is a boom and younger generations come a well, maybe not china, but certainly india. we need to educate them. the only way to do that in an affordable manner is with computers. rishaad: we can see some video of virtual reality being one way. >> virtual reality is one way. imagine putting on a headset and interacting with the teacher
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based on your characteristics. let's say you are looking in one direction because you are bored, the teacher says let's change and do a quiz. and key countries, like saudi arabia, they change it to becoming a man because male teachers are more easily understood and accepted in that country. rishaad: you are referring to the cultural norms and values. >> that's the basic premise. the way you do this is by using tracking technology that watches in humans behave and reacts certain situations and you have curriculum that adapts, artificial intelligence that draws on the individual student history to create new lessons a new topic plans. rishaad: good stuff, david. ok, and the next hour, a look at what is going on at oz minerals. the company saying it will have
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strong cash flows in the next few years. does that mean whether the modded slump is over with? we are asking that of its chief executive. ♪
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>> from our studios in new york city, this is "charlie rose." charlie: we look at trump's economic plan. he delivered a major policy address in detroit, michigan. he stressed to bring new jobs and prosperity to those who have the very least. in contrast he tested hillary clinton as the candidate of the past. mr. trump: in short, the city of detroit, is the living, breathing example of my opponents' failed economic agenda. [applause] i'm proposing an across the board income tax deduction for middle-income america.

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