tv Daybreak Asia Bloomberg August 14, 2016 7:00pm-9:01pm EDT
♪ it is just after 8:00 a.m. in tokyo, the first major market opens across the region. the economyour, how performed, that in the second hour. this is "daybreak asia". ♪ signs of stability, china says the economy remains on track, despite the stumble. >> the latest data expected to show the economist load last --
economy slowed last quarter. >> bulls and bears collide, with some believing the stock has reached its peak. >> trump earns praise from an unlikely source. coming to live from bloomberg's u.s. and asian headquarters. 7:00 here in after new york. trading was mixed on friday. yvonne: it looks like things in asia will open slower, not to much conviction. we did get david disappointments on friday with china. u.s. retail sales were also a letdown, pretty much flat on the kiwi dollar as well as new zealand stocks.
counting down the open to australia and japan. futures in australia with modest losses. the aussie dollar at $.76. could also see a pullback in stock split. dollar-yen did see a surge after u.s. retail sales disappointed. south korea marking liberation day inand independence india comes so no trading in those countries. that was an early look at what we can expect. how do we expect wall street to play in this week? betty: judging by how futures are trading, it's not looking like much directions so far. for the bulls, hard to agree on where this market is headed. let's get to our top story. a leading member of china's central bank has sought to allay
fears, saying a slowdown in not had any has effect and fundamental support is stable. is looking into the story for us. what else did the central bank say? were comments from the top economist at the pboc research bureau. he was commenting on saturday and talk about the risk of corporate debt in china. he talked about the need to rein in some zombie companies. he is reiterating that. as well as reining in zombie companies, he said we have to have more of a focus on job stability, the growth and stability of the jobs market in china, saying there should be less focus on the gdp target. those were a couple of his points. he said if you look at the imf
and their comments on china's gdp forecast, 6.6 percent this year, six point 2% next year, stillhows there is internationally level of competence in china's economy despite the challenges posed by normal riskhan levels of corporate debt, saying higher than men ♪ ♪ any other countries around the world. you mentioned the imf warned about high risk credit in china. what have they been saying about this? yes, debt in all its forms and china on the top of the agenda for so many people here, whether analysts come investors, or policymakers. the imf was warning about this this 2.9 trillion in debt.
if there areng defaults on these, there is greater risk of a liquidity shock than if there was a , therate loan default imf's and corporate default can be unwound and manage easily more so than the shadow credit product. there is a warning from the imf. 11% of these product yields to 14% compared to 3% to 4% on bonds. after those data points on retail sales, factory output, and fixed asset investment, all missed. so that is the basis on context of the comments from the pboc. >> thank you so much.
let's get to first word news with paul allen in sydney. the uk's with draw from the european union could be delayed until 2019 as new ministries for the transition may not be ready to start talks as early as expected. saysunday times departments are still recruiting staff, making it unlikely that article 50 will be invoked until later next year. egyptf has agreed to help . cairo was looking for 21 billion over three years. fundsition to the imf, are expecting from the imf and bilateral a deals. they expect the agreements to be finalizing coming weeks. police in time and say the suspects behind the bomb blast are probably still in the
country. officials say the devices used in popular tourist resorts were similar, and one group may have carried out all the attacks. no one has admitted to setting the bombs, but the prime minister said it was an attempt to destabilize the country. reports from japan said the government will defend ground to air missiles to defend islands also claimed by china. they expect the system to be deployed by 2024. tinges have been rising ahead of withmonth's g-20 in china talks of a meeting between the prime minister of japan and the president of china. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. thank you. the bulls and bears seem to be colliding. it has rewarded investors with more than a doubling, weibo.
the short-sellers seem to be increasing their bats as well. what are the bulls and saying? this one is looking at the bears in the bowls. forbulls see the results the second quarter, better than expected, second-quarter earnings per share, $.16 adr. a $.11.expecting revenue and user growth also steady, if not stellar. the key here to drive the stock further, which has been on a scream, third-quarter guidance $173evenue upwards of million, better than expected. ,hey are adding partnerships average user growth for weibo has been 30% for the last couple of years. the long investors see more upside to the business. let's talk about how
overbite the stock may be. >> yes, that's where the short-sellers have then increasing their bets, and positions are at record highs. 151%stock surging 119%, up since that spinoff back in april of 2014. the forward pe exceeds the average of 10 global peers. the pe is now 132 times earnings, 70 times forward pe, more than double facebook, double alibaba, and some investors are looking at the a backdoor way to get exposure to weibo because sina is up only 33% since that spinoff. increasing,ts are
so we will have to see if this is hitting a tipping point. yvonne: thank you so much. time for a check of key events to watch this week in the u.s. su keenan joins us now. we ended friday with a whimper. >> we had lackluster retail sales that did not give the market are reason to move higher after blowing it out on thursday. if you look at what happened, a little bit of a pullback. the big drug was the banks, earning speculations. hit in thehat really of movers, nordstrom's, one the retailers that did well, yahoo! also a winner, but check bull,idia, like a runaway crushing earnings, up 90% year to date. who knew?
we will start off by saying the fed minutes. more on what you need to know. throughs are we stick for clues. u.s. consumer prices and housing starts are ahead. economists a both expected to change a little in july. consumer prices continuing to show low inflation. check out a chart we have for current conditions minus future expectations. focus on is the blue line, consider -- consumer sentiment, moving higher. , lot of national events flooding taking place in the south west and midwest, big focus of the presidential campaigns heat up, likely to get
a lot of attention. president obama declaring missouri as the latest emergency area. controls, two companies holding shareholder meetings and in the spotlight. betty: you mentioned some earnings. what are some that you did not mention that you want to look out for? >> some specialty retailers, walmart, this will happen on thursday, analyst say last quarter they posted an 11% earnings surprise. they've been investing a lot in e-commerce as they take on depot, also home reporting on wednesday, analysts see an increase of 13% year over year. in the retail space, these companies appear to be doing well. also, cisco, nestlé, tencent holdings, all out later in the week.
watchingty: you are "daybreak asia". the imf urging japan to adopt a policy of direct intervention and wage setting. it wants the government to use tax breaks, persuasion, and companies toget grant bigger pay raises to stoke inflation. as a sign of how worried the imf is about japan's stagnant economy, they have resisted
other measures. a tax amnesty program could attract money stashed overseas, which could fun and for structural projects in indonesia and finance a widening deficit. it follows last week announcement that repatriated funds can be invested in gold and property. energy became the latest victim of the collapse in energy prices. the oil and gas producer reported a second-quarter loss one debt mayn and come under stress. let's look at the key economic data driving markets.
i will take the u.s. side of this conversation. one event is the release of the fed minutes. do you expect that to be an enlightening as to where the fed is going to go in raising rates? investors will be going over the minutes of the july meeting, trying to look for clean use -- clues of a hawkish tone. the fed decided to keep rates on hold for a fifth consecutive meeting, which is unprecedented for a tightening cycle. investors were looking to see whether some of the hawkish undertones of this statement will be more pronounced in the minutes this week. that could have important implications for asia as a dovish fed helps to fuel yield and promote capital inflows into emerging economies in asia. yvonne: of course we had
anticipated inflows. i'm curious what you think about what we have seen so far as we close out earnings, whether you think that hawkish tone, judging by what we have seen, whether that hawkish tone is justified. the toneected that will be more hawkish, definitely. first of all, the external environment is more stable than it was a few months ago, so the spillover from brexit has been and stabilization of the chinese economy and the second quarter which gives the fed room to breathe and focus on domestic factors. see recovery and upside surprises in the u.s. economy. yvonne: should we be worried
about those chinese numbers? we are expecting the economy to remain stable ahead of the , so noeting in september need to worry for the time being , and that will also influence publishdecision to hawkish minutes. i would like to stress that a more hawkish tone could open the door to another rate hike in the remainder of the year. it is highly unlikely anything will happen before december so they will the unlikely to make a move. let's talk about japan. were getting gdp figures. how bad are we expecting? we don't have a leap year of outflows byl as
foreign tourists, so could be a big downside surprise. >> correct. performance in the first quarter was an upside surprise. the japanese economy has been affected by an array of downbeat data in the second quarter. to put this into context, industrial production was down by 2%, exports down by over 10%, so we expect the weakness going forward and it could affect second-quarter figures. we did that story about imf alternative measures for the boj to consider, one was the wage target policy, because they were saying helicopter money has too much risk. do you think this will work, people companies to give a raise. without help japan? step back,ke a
downside pressure on growth and a strong yen has put pressure on the bank of japan. newaw earlier in the month monetary policy stimulus, rather muted, primarily an increase in -- purchases, and the announcement of a stimulus package. it will only account for a small percentage of gdp, which is substantially not enough, so the focus is on boosting wages and to spending domestically. expect what should we from the boj if we get a bad gdp figure and the fiscal package is not as optimistic as some hope it will be. terms of monetary easing, it was disappointing. investors were expecting more measures. boj did not touch the
inflation target, which is 2%. of monetary easing is not on the table, but what we are looking for are structural reforms, so the measures the imf put forward are what would help to pick up the slack in the japanese economy going forward. yvonne: thank you so much. we appreciate your insight. gained, donald trump unlikely support for his claims about president obama. we will talk about that next. this is bloomberg. ♪
enemies. bolo -- r of has the how will voters see this? will it be bad for trump or bad for clinton? >> voters are having difficulty as it is parsing the comments donald trump made. whether are not as makes a splash, we have so much back and forth about the contrast between the two. are notrican voters interested in the international politics of the middle east. be ant think this will issue that is a flashpoint for him. betty: i would say what
dominated the headlines was the issue of tax returns that has come back to haunt donald trump, because clinton and tim kaine both released their tax returns. will that affect the poll numbers? >> hillary clinton did release , showing herreturn making with her husband $10.6 million and paying a hefty tax of $3 million. it draws a contrast with donald trump. at the end of the day, it cuts the other way, people saying $10.6 million for a democratic candidate for president, raising questions about how much money she and her husband are making. think back towill her comments about how they were dead broke when they left the white house, and people would look at that number -- >> they are certainly not broke.
betty: briefly, tell us about the events happening this week. >> this week will be a chance for donald trump to get back on message, what he is trying to sell. both be in battleground states and try to make this case in ohio and pennsylvania. for him, this is a reset moment. he has had a bad three weeks. we will see if the next week can be better, as she sees if she can solidify gains. they will both be preparing for debates in september. betty: thank you so much. megan murphy a bloomberg news. i want to show that we have a elec, where you can see
>> join us as the exchange rate is stabilizing. there is little change and it indicates that the yuan is in equilibrium. it is a case of bowls and hairs rallying 120%r beat theasts estimates. the number of shares for shortselling rose. dipped with emerging-market equities coming off of a streak of gains.
there is a massive fledged , if that islus and lower, that will suggest the sentiment is difficult to shape. we have had weak retail sales pushessumption and if the gdp number to the downside. >> there are other economic numbers expected today. this paints a better picture. this will be a little week with and chinaore economy has the second quarter gdp
was a decline of nickel and we are going to be watching some of expecto see if we can downsides from this with the dwindling chinese demand? -- chinese demand. down and seeing a slow we have more. brian, describe what we are likely to see. >> good morning. as you said, the growth is expected to be low and this is a second straight quarter of expansion and we expect the demand to be on the plus side. a negative and a plus this is a vague
,oncern to the prime minister who wants to convince companies to invest in the future and we will be looking at this closely. host: you mentioned the minister. how will he respond? saying a lot, given the potential growth. they do tend to flip-flop every quarter and this is a positive thing. a couple of stories in this backdrop and a misery index is at the lowest in decades. and he good for mr. a may look to build on this. joined the cabinet
after this reshuffle and he said include targets need to wage increase and it will be interesting to see if the prime minister pushes for the tax incentives and convinces them to lift the wages. in terms of corona -- kuroda, there is a policy review of the boj next month. they may look to do further asset acquisitions. one thing that we could see is more flexibility with the and i wouldrget expect flexibility with the
factors and the oil prices and slagging -- sagging growth. host: thank you. we await those gdp figures in 10 minutes. profitsn third-quarter was released this morning. let's go to paul allen. cash being with weaker. the $1.6 million trade and they were up in the third quarter. they are facing similar issues to other banks and there has on the mortgage we have seen june
>> the earnings season is starting to ramp up in australia and tell us about those result. read thea day where i numbers out to you. 4 billion and they are stopping their share buyback and there that news a couple hours drive to the south of us in sydney. >> all right. thank you so much. paul allen with the earnings coming out.
celebrating their first gold medal. butterfly anden's he defeated michael phelps. did you see that? >> i did not see them meet. i did see the response. parliament andby stockes from good olympic from love these pictures eight years ago. andas at a training camp and he phelps showed up says he will continue to take pictures like that in the
mark carney may add to the stimulus announced and bring the rate to .1%. the rate of the u.k. sliding into a recession is at 40%. of -- ng to gain control state anda combined the utility. the deal is likely to be announced in a few weeks and australia rejected a bid. pessimism --e there is more pessimism about job security. it is at a seven-year low. singapore lower the growth forecast and the economy expanded less than estimated.
there was a poor employment outlook. the dollar is weak or and traders have cut after the short sales drop and fell of forecast. we are here and we talk about what was reflected in the stock markets. what do we read into this? >> the federal reserve is not want to raise interest rates this year. thee are projections in upper left-hand side of the nearly 50% andas not everyone agreed that this would be hike. the market traders are mispricing the fed.
>> the market is not pricing the thato move and we think this is too far. >> the economy is doing well enough and fed wants to move this year. >> how badly did they miss the forecast? >> they were flat and they were supposed to rise. the gasoline sales and the auto sales are strong and the gasoline sales were down across the board with other things and we end up with retail sales falling and the producer prices are not as important. they are down 0.5%.
economy continuing. there is a number that is flat deflator is little bit better than expected and the deflator is coming and you can keep in mind that this is near the bank of japan. gdp is comingof in flat. -- thethis has been business has been in a second quarter of contraction. , there is an annualized
this does not look good. is ashink that it expected and it is neither good or bad. the economy seems to be stalling and the disney's investment is negative for a second ifsecutive quarter and private entrepreneurs do not invest in japan and business is sid ng, that is a warning gn. thehere is not reaction in yen and we have seen the volatility come down. .t is hitting the 102 range numbers? these
the gdp numbers for the bank of japan are not very significant and the question is that the policymakers have stagnated and we see a switch in the policy priorities. was a negative tax hike and this has been turned upside down. the leadership is fiscal policy and what role the bank of japan should be playing. that is what september is all about. announced that expanded thinkrchases and they
the is this expenditure is negative and, at the end of the day, what leads the economic growth has to be private companies and investment in the country, which is not happening right now. they made aook like mistake in the last meeting by not putting more ammo into monetary policy? i think the issue is a switch in the policy leaderships. everybody who advised the prime minister has come to the conclusion that monetary policy will not do the trick and there is fiscal policy leadership that needs to work out and there is a switch of monetary policy into
fiscal policy and this is no longer about the bank of japan. that on you so much for the economic numbers coming out. hearing this and what and the bank of japan do what is shinzo abe going to do? more of the same that is a big question about how this will be reflected in and there could be a bit of a pullback again.
asian markets getting underway, disappointing gdp figure out of japan. two markets are close, india and korea. let's take a look at how things are looking so far. we were looking for a slightly lower open given we had strong gains friday. we had disappointing numbers from japan. u.s. stocks did not give much of a lead, marginal gains in friday's session. open, nikkeiean 225 down, not too much reaction in the yen, but second-quarter gdp numbers showing the japanese economy struggling to gain traction.
growth narrowed from the previous quarter. some declines from sydney, australia, down a 10th of 1%. commodities player starting to weigh given that selloff on the disappointing china data. new zealand has given up earlier gains, pretty much flat. space, the that fx japanese yen looking weaker ahead of those numbers over the past few minutes. 101 .25, so weat have strengthened in the wake of those numbers, setting up for a disappointing session for japan. been a bigrength has part of the story in that slow down, preventing the japanese recovery from taking place. they aussie dollar declined in friday's session following the
china data released, flat at the moment. andill be watching movement oil today, because those gains are continuing into the asian session and set up the energy sector for strong gains. thank you so much. let's take a quick look at numbers from japan. tokyo, what stands out to you? >> it's definitely a disappointing report. net exports were a drag on growth, and capital expenditure fell for the second straight , sood at a fast pace negative signs for the economy. prime minister shinzo abe is trying to convince japanese companies to invest in the future by spending at home and lifting wages, and they have not done it on either of those
fronts. we had some big companies posting record profits, toyota, and now we have the currency effect acting as a drag on growth. it points to a bearish picture for what is ahead for the economy. prime minister shinzo abe will be happy that he compiled a fiscal stimulus package, and a lot of hopes will be that that stimulus will carry us forward throughout the year. that,: you mentioned prime minister shinzo abe has tried to invigorate the corporate sector and invest more, but we are still not seeing those numbers, declining abe respond toill the latest figures? >> our sense is that the demographic dragged from an
aging and shrinking population is too big to overcome by standard policies he has employed. the boj made a good effort trying to reflate the economy. prices have not taken off as intended. prime minister shinzo abe has come through with fiscal stimulus, which is the main focus of policy. what we have not seen is structural change. ever since he first announced the three arrows, one of the big problems is the lack of mobility and the labor market, so it will be interesting to see if mr. abe takes definitive steps in that area. yvonne: where does that leave the boj, as there is that shift from monetary to fiscal stimulus from the boj to the government, and they are preparing for this conference of policy review now. >> there has been a shift.
the boj was the focus of the policy for the longest time, and then we saw ahead of the was not that mr. abe talking about the boj and what he could do for the first time in several years, and then he came through with this 28 trillion yen stimulus package, so the boj has been put on the back earner. we don't expect them to back away from policy, but we do expect them to take the foot off the pedal. banks have complained about negative interest rates, and that is a message that mr. abe and mr. kuroda have heard. may be adjustments to asset purchases, more etf purchases, otherwise more flexibility and terms of the inflation target. joining us live from tokyo, thank you. let's get to first word news. reports from japan say
the government is to develop ground to air missiles to defend islands also claimed by china. it is expected the system will be deployed by 2024. tensions have been a rising over the islands ahead next month's meeting of g-20 ministers. santos will take a write-down on its liquid natural gas project due to lower oil prices and a slowdown in output. the non-cash charge will be reflected. it is the latest sign of strife, with major gas export project struggling under low prices. panasonic may be getting set to sell cheap smartphones in emerging markets. it is planning to sell devices for as low as $99. panasonic is planning to sell
the phones in kenya, gagne, nigeria, bangladesh, and myanmar, while expecting to expand to another 10 markets next year. another stock we are tracking, sharp rising by 9%, up currently 8.5% after officially becoming a foxconn unit. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: thank you so much. shares and national australia bank down 1.1% after a trading update this morning showed a 3% drop in third-quarter profit. let'swrapup of earnings, get over to paul allen in sydney, australia. what happened? another story of , up to $228nab
million in the third quarter. a cash profit of $1.6 billion, down 3%. the third of the big banks to report, a trading update, not full-year earnings, but does illustrate the problems that anz and commonwealth bank of phase. -- commonwealth bank have faced. the ceo says we saw higher qualitycosts, asset remains strong, cost control pleasing, but shares off by one 1.25%. yvonne: a drop-off in new crest mining's after coming out with their full-year earnings. how did it do? too bad. underlying profit down 24%, 320
$3 million, but that is what the market was expecting, in line with estimates, reflecting lower gold and copper prices realized, although price in austrian dollars has been doing extremely well. new crest shares over the year have been doing very well, up 90%. revenue, $3.29 billion, gold output for the coming year expected to be between $2.4 billion -- 2.4 million ounces and 2.5 million ounces. earnings season and australia starting to ramp up, and also a rail operator out with full-year results. how do they look? great, netis not so profit down to $88 million, npat.lying impact --
izon also paying a dividend and stopping their share buyback program to invest in growth opportunities. they have won a contract for coal haulage. thank you so much, live from sydney. up next, the hunt for returns. emergingguest says markets still looking attractive. we will hone in on where. this is bloomberg. ♪
government needs to raise revenue for an infrastructure program, but struggling with cheap commodity prices and a slowdown in china. earnings,ports analysts expecting a strong showing, second-quarter sales may have risen 39% and operating profit up 42%. growth is being helped by strong social network presence, online games remain the growth driver. we will watch to see if exports decline for a 10th straight drop, unexpected 13.6% and overseas shipments from japan. australia releases to light figures-- releases july , up from a must 8000 in june, the data is notoriously unpredictable, job advertisements fell 1% in july.
capital guest says returns look attractive in emerging markets, particularly asia. he joins us now in the hong kong studio. great to have you. your take on these gdp figures out of japan. is there any upside to this at all? >> i think it is more or less as expected. in japan, we don't see much growth in that economy. the key for the market is we do need to see a weaker yen, but we are not seeing that happen. we are still waiting to see what the boj will do. hichne: with the currency, we has failed in terms of bringing down the yen, but in terms of etf purchases, it's a good thing they were trying to tackle inflation from buying into the etf market, but if you look at how it has been doubled down,
some say this is an issue of orporate governance, because they could end up as major shareholders for these stocks. you see this as a buying opportunity? >> down the road, i think it is more a concern. the government has been buying lots of bonds and the stock market, so what is next? people are talking about helicopter money or debt monetization. the tools available for the andtry is getting less less, more limited right now. these are the ones they are estimated to own. you would not be buying fast retailing now? an market, we are keen on those companies that can deliver return. market, we need to be
selective there. yvonne: let's talk about the broader region. least for u.s. stocks, s&p 28 times earnings, indonesia with a you care about phony rations anymore or is central bank liquidity going to keep fueling things? supportay to argue to market valuations is that interest rates continue to come down. in indonesia, interest rates are expected to come down more. the key for the equity markets is that we need to see earnings growth come through. bad as we thought as before, earnings stabilize, and in fact the bending on which markets you look at, we are seeing some positivity coming through, whether that will be sustainable is the next question.
we do need to see earnings come through. expensive can equities or bonds get? so far are ok, but what will you be telling clients? -- thekey is the markets way i look at the region, i believe those countries will carry out reforms and continued to be positive on. india, philippines, these are the markets where i continue to see structural reforms come through, so i expect over time that earnings will be stronger. for other markets, and we need to be very selective. we need to look at the names, the companies, and whether they can continue to deliver earnings. yvonne: we have seen a lot of inflows into emerging market ons and credit, but for stocks as well, but not as much. do expect that to shift or there
is a spillover effect from bonds into stocks? >> it will come through when we start to see more positive earnings. right now we are mixed right now. certain companies we look at, but not the whole market, so i think time will tell. money continues to flow into bonds as the spreads tighten. yvonne: we also got some disappointing data on friday when it came to china with factory output, retail sales, fixed investment, u.s. retail sales week as well, do you think this will change what the fed will do now? december has been pushed back quite a bit as well. does it matter? >> this year, how many times when the numbers come out and people say there will be an interest rate rise in the u.s., but it keeps being postponed, so it is difficult for the u.s. to
increase interest rates even with where we are with the state of the economy. the other thing i noticed is the , despite market expectation on no interest rate rise, the u.s. dollar has not been stronger, so the currency market is telling us the economy is not as robust. yvonne: you think the dollar will continue in a downward trend? >> i think the dollar is difficult to hit new highs. yvonne: what high could we be reaching? what trading range? what is that mean for asian currencies? will that still be in the stable range? >> trade weighted dollar is isck in a range, and that beneficial to asian economies and currencies. if we have a strong u.s. dollar, then asian currencies are subject to these pressures. if the dollar trades in a range, that will be support for asian
currencies. yvonne: we continue to see good news out of asia. thank you so much. a quick check of the latest business flash headlines. a deal to gain control of after majorpany shareholders agreed to sell their 45% stake. the deal is likely to be announced in a few weeks. chinese firms buying foreign utilities at the fastest pace in eight years. ast week, australia rected bid from state grid on national security grounds. bulls and bears colliding for weibo, with short sellers thinking the stock has peaked. the highest ever. the stock jumped 19% last week, while the shares borrowed for shortselling rose to a record 4
million. warner bros. superhero film suicide squad remains on top of the north american box office despite a panning from critics and competition from three new releases. the movie collected an estimated 43 point $8 million over the weekend, down 67% from its debut. suicide squad brophy august record when it opened the previous weekend. up next, the latest dictum of the collapse in energy prices, live to singapore for the details. this is bloomberg. ♪
false start? is a small energy company that produces 17,000 barrels of oil and gas a day. even new zealand uses about 160,000 barrels a day. they have said that debt facilities that may come under stress. discussions with third parties to strengthen their capital structure, including equity issuance, restructuring, could even include a sale of assets. it seems like we are seeing a similar picture in singapore when it comes to these other companies. is it a similar story? >> absolutely.
swiber, an oil and gas services tom, is also going struggles, looking at liquidation, discussing with courts how they might restructure. this goes back to what we have been talking about for the last two years, this massive collapse in energy prices. ,etting back to krisenergy they're acting ceo says it is the worst downturn he has seen and 38 years. energy is a business where all the costs come up front, riggs, and all thering, revenue comes on the tail end, so you're taking on in norman's debt and hope -- enormous debt and hoping the operations work the financialt picture stays the same as when you got into it. a lot of companies around the world are struggling right now because they made these really 2013, 2012,nts in
back when oil was $100 and gas btu, and now oil sells for $40 and gas is going for five dollars, and they have to pay back of this debt on revenue that is coming from a world that is completely different. picture there. thank you so much, live from singapore on krisenergy. some of the news for singapore, celebrating history, its first ever olympic gold medalist. the 21-year-old won the men's butterfly and beat michael phelps. singapore is going mad. he will be honored by parliament and an open top bus ride through the city. his uncle was the first singaporean to take part in the
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because after all we should fit into your life. not the other way around. yvonne: good morning. singapore,a.m. in half an hour away from trading, retail figures expected out this afternoon, looking for a growth of 2% for june, falling from the previous month. you are watching "daybreak asia" . ♪ let's get to first word news with paul allen. asian stocks have started the week in the negative,
japan's economy expanded slower than forecast, u.s. shares pulled back. benchmark had climbed, oil extending gains after its best week in april. japan's gdp expanded just 2/10 of 1% as business spending contracted. the medium estimate was for .7% growth. business investment decline .4% from the previous three months against estimates of a slight gain. property makers have struggled to find a strategy. bulls and bears colliding for with shorts increasingly convinced the stock has peaked after rallying 120%. bearish bets at their highest ever even after earnings and estimates beat. the number of shares borrowed for shortselling rose to a record 4 million. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg.
yvonne: thank you. inf an hour to trading sydney, tokyo closed today. how our markets digesting this gdp miss out of japan? the immediatethan aftermath of that disappointing number. everything essentially came in worse dan expected. the annualized number indicating the japanese economy growing, but starting to narrow in pace. the nikkei 225 down, often session lows, but looking at the yen unchanged. if you are expecting weakness out of the yen, you did not get that. new zealand is looking flat at 1%.moment, up 1/10 of australia down 1/10 of 1%, often session lows, but in terms of
that market, we were expecting more of a boost in that oil sectorthat the energy would be outpacing losses, but that is not what we are seeing. here is one stock listed in tokyo doing well, sharp up 17% at one stage, this after we had the news that the chinese ministry of commerce had agreed to that cash injection by sharp. that injection was completed. foxconn isunit of now complete, so sharp up on the news. hai down, having quite a time of it with that miss on earnings and the smartphone demand weighing there. some of these minors and minerals-focus companies in , atralia, fixed investment
slew of disappointing data in china. that way the most on these commodity futures producers and minors. -- arhead a four session poor session. q, rio tinto, bhp, the miners not doing well today. japanese gdp looking the way it is. , 101 point a change 30, range bound all morning, and that is where it is sitting. downare aussie dollar was six tens of 1% following the china release. a little bit of weakness. the other thing we are watching is oil. april the best week since
, this opec story dominating, the idea that perhaps the market stabilization -- prices stabilization measures might be on the table at the september meeting of opec taking the headlines. the saudi oil minister saying it would be on the agenda. on topcontinuing gains of what we saw in u.s. crude in the overnight session, up by 3/10 of 1%. we did see shorts get out of the market. that is starting to accelerate. we will be watching to see where that goes. haveny, just a gauge of demands, gold higher following , $1337.nese data yvonne: thank you so much. a leading member of china's central bank has sought to allay fears about the economy, saying
a slowdown in money supply has not had an effect, and the fundamentals support a favorable exchange rate. we didn't get that disappointing data on friday, were these comments in direct response to that? comments were from the top economist at the research ineau, and they were direction and referencing the fx reserve we saw the previous week in and the money supply, credit supply, but it is probably no coincidence he posted this note after those week data points that we got, particularly retail sales, industrial output, and the fixed asset investment. talking about the fx reserves, the fact they came in at $3.2 trillion in july, roughly in line with june, shows the inhange regime is
equilibrium. there had been concerns, and it is now a key gauge, that fx reserve number for people looking to see how big the capital outflows are on the back of concerns about weakness around the renminbi, but says the exchange rate is roughly in equilibrium. he also talked about credit supply. the broadest measure of credit supply in july came in below forecasts. you have aggregate financing at ,487 billion yuan about $73 billion. upey supply also came in, 10.2%, but the lowest number we have seen since april 2015. then new loans, and they were about half of the estimates forecast.
said it is, analysts likely down to the fact that the central government level and policymakers are concerned about asset bubbles forming. also, you may have seen a pullback in new homes lending, central to these new loan numbers reduction in july. he is saying there is now stability here and the yuan exchange regime as well remains balanced. coming to the defense after that week data on friday. were there any other comments? debt,referenced corporate saying high by international standards. he again said this is something policymakers have reiterated, an
emphasis on tackling zombie companies. he also talked about the debt equity swap plan the government has been rolling out, where banks will take company struggling to pay back loans. he wants to see that rolled out more quickly. he also said there should be less focus on the gdp target and more focus on job market stability. tom mackenzie joining us live from beijing. the imf warning that urgent action is needed by china to contain growing risks in the world's second-biggest economy. thosee been following lines from the imf. what are they worried about? juliette: it was discussing its article for on china when it was mentioned. the imf is confident that china's economy continues to move towards a sustainable growth path, but vulnerabilities
are rising on a dangerous trajectory, and that is eroding place and fx barriers in to contain growth. the medium-term outlook according to the imf is clouded by rising corporate debt and structural excess capacity, and warning that without reforms, china could face a sharp slowdown or financial crisis. the imf talked about the shadow credit products as well here it how concerned are they? have about $2.9 billion in shadow credit products, high risk a, but i return loans, so the yields are around 11% to 14%, compared to 6%. managed ore not unwound properly, they had and have huge ramifications, so while these loan losses can be managed gradually, the defaults on shadow projects could trigger risk aversion. worth noting that the imf did
say the chinese banks capital ratios are sufficient and stable. yvonne: it's not just china that the imf singled out, right? juliette: they are worried about japan, inflation a real concern. the imf has put on a call asking for two japan to resurrect the president nixon, ford, and carter in the 1970's, but in reverse. a lot of economist are for it. rather than use it to contain wage and price pressures, the imf once tax breaks, moral persuasion, and penalties to prompt companies into granting pay increases and push inflation higher. a director who was part of this white house policy in the 1970's , he says it won't work and will have little impact. has done this abe
time and time again to try to integrate companies. thank you so much. we areher stories tracking, police in thailand said the suspect behind the bomb blast are probably still in the country. the devices usedn popular ,ourist resorts re similar and one group may have carried out all attacks. no one has yet admitted to setting the bombs. the prime and asked her said it was an attempt to destabilize the country. the uk's withdraw from the european union could be delayed until 2019 as new ministries for the transition may not be ready to start talks as early as expected. the sunday times says departments are still recruiting, making it unlikely article 50 will be invoked until late next year. that is required to initiate the process taking the u.k. out of the eu. here is a chinese stock where the bulls and bears seem to be colliding.
, china's answer to twitter, has rewarded investors with a doubling. short-sellers are increasing their bets as well. the good side first. earnings for at the second quarter, better than expected, adjusted earnings per share, $.16 a share, the estimate was on $.11. revenue and user growth also steady, if not stellar. the catalyst was the guidance for revenue, higher than most forecasts. this stock has rewarded investors, up 119% year to date. it is up 150 1% since the spinoff and 2014, those gains coming in the last couple of months. basically they have been adding tv and video partnerships.
that is expected to add to the user base, growing every year by about 30% of the last couple of years as they add more services and attract those viewers. -- the longors investors see more upside given the growing business. yvonne: in these markets we see our valuations going to be too high for you? is that the same for weibo? >> it is a little frothy according to short sellers. there's bets at the highest level ever now, 119% rise year to date is twice as much as the second-biggest chinese stock listed in the united states. the forward pe exceeds the average of 10 of its global peers, a pe of 132 times pe,ings, 70 times forward
ore than double facebook alibaba, which both trade at 60 times or 32 times forward earnings. some investors say given that , it spunture of weibo off from another chinese company listed in the u.s., its stock is up only 33% since april 2014, 151%, soweibo is up maybe invest in its parent company. a look atking recommendations, unleavened buys, three holds, and zero cells. >> they are beating on revenue, profits, and steady user growth. they are just trading at a high multiple right now. why bond investors may be wrong about the fed's next move. we will hear from pimco, next. this is bloomberg. ♪
latest business flash headlines. the imf agrees to help in egypt plug gaps in its economy before approving a $12 billion loan. imf, funds to the are expected from the world bank, the bond market, and bilateral deals. indonesia considering setting up tax haven areas to keep billions of dollars in the country. the government said a tax amnesty program could attract money stashed overseas, which could fund infrastructure projects and finance the whiting deficit. it follows last week's announcement that repatriated funds can be invested in gold and property. singaporeans growing pessimistic as concerns rise about pay in job security, with mastercard consumer confidence index
plunging to a seven-year low. the report comes up to lowered its growth forecast and the economy expanded less than estimated in the second quarter. hong kong has the week's reading things to a poor employment outlook. one of the world's biggest bond funds things traders have got it wrong. is emphasizing treasuries because the market is too pessimistic about the likelihood of a rate hike. some investors are buying treasury simply because they are trying to get dollar exposure, so it could be a currency play. look at what the alternatives are. the tenure rate in japan is -10 basis points, the 10 year rate in germany is -10 basis points, european rates have come down significantly, u.k. rates have come down 100 basis points, 10 year sterling government bonds are now 50 basis points, so the 1.5% in the u.s. looks good on a
relative basis to what is out there. looking at the pimco total return holdings and related debt, and they are now almost 50% of total assets, so as you make the case that we have had weaker options, then maybe there are other places to be like emerging markets, so are you reducing holdings? picture call is we want to deemphasize interest rate risks in developed markets at these levels and tilt our portfolio to taking slightly more credit risks. we are seeing significant opportunity in credit markets, u.s. credit markets can offer 3% to 6% yields for investors, and we like emerging markets. we think emerging market bonds can offer 5%, 6%, 7%, so in a relative world today, credit in emerging markets looks very attractive. >> does that mean you are backing off of u.s. treasuries and changing allocation out of those?
.> we have been deemphasizing our view is the fed will move higher than what is priced in. basis point rate hike is not projected for another year and a half. we think that is too pessimistic, that the fed will alternate lift rates. because of that, we don't want to take as much as interest rate risk at the front end of the curve, but we are seeing yield and opportunities in non-agency mortgages, corporate bonds tied to the consumer, and we have also increased our emerging market exposure. >> on the issue of credit, take a listen. borrow a phrase from a couple of great singers in ishous., feeling bubbl will workis demand and tell it does not work anymore. like we saw pre-financial
crisis, it usually does not end well. about conversation was the fact you can't take a view on treasuries without the same view on credit. those two classes within fixed income seems to be the same. if treasury selloff, credit is going with it. what is your view on that? that is true because the beta is there with rates to spread. if you look around the world, corporate bonds are the richest in the u.k. because basically now you have a central bank said to buy corporate bonds and subsidize the market. corporate bonds are rich in europe, where they have started to buy corporate bonds. they are buying $8 billion per month, the ecb. the fed is not buying corporate bonds, so if you look at the bases between credit default swaps and corporate on spreads, they are richest in europe and the u.k., and actually they are still cheap in the u.s.. if you want credit risk a, the u.s. market and emerging markets are going to be the most attractive place to get credit
claims that president obama created the terrorist group. >> voters are having difficulty parsing the comments. we have the leader of hezbollah supporting donald trump. have had so much on national security and contrast between americanbut most voters are not in tune with the international politics of the middle east. this could be the kind of issue that is a flashpoint for him. it gives more to the issue of does he have the temperament that are right right now from a national security standpoint. i would say what dominated the headlines was the issue of tax returns, coming back to haunt donald trump, because clinton and tim kaine both released their returns.
without affect poll numbers? hillary clinton did release her 2015 tax return, which shows are making with her husband $10.6 million for 2015, and paying a hefty tax of $3 million. it draws a contrast with donald , but at the end of the day, it cuts the other way with saying $10.6 million for a democratic candidate, raising the amountbout of money she and her husband are making. people will think back to her comments about how they were dead broke when they left the white house. "trending business" is next. a deep dive into that
number out of japan. reaction to the equity trading session. mitsubishi, analysis. the new york stock exchange, the head of global capital markets joining us in 45 minutes. also, looking at container shipping, what does it tell us about the global economy? that is "trending business" over the next two hours. ♪
♪ rishaad: it is monday, the 15th of august. this is "trending business". i am rishaad salamat. ♪ live in beijing, tokyo, and sydney this hour. asia-pacific shares pulling back from highs, disappointing data from japan curbing risks. gold moving to the upside. foxconnving since the completion. the cash injection has gone