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tv   Trending Business  Bloomberg  August 16, 2016 9:00pm-10:01pm EDT

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♪ rishaad: it is wednesday. it is august the 17th. this is "trending business". i am rishaad salamat. ♪ right.: live in tokyo, beijing, and shanghai this hour. bojyen weakening, a former official said they are going to need to change tact. link, china
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approving the hong kong-shenzhen connect. let us know what you think of our top stories. follow me at @rishaadtv, and use #trendingbusiness. straight to the market action, a flavor of what is going on, headwinds from new york. we have tokyo seemingly shrugging that off. toid: this comes down dollar-yen. in an ominous position when you see money flowing out of the dollar into the japanese yen. intervention from the finance ministry, they push the button on intervention. down,s next, on the way two pieces of important data. the jobless rate in new zealand, better than expected, 5.1%
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unemployment. participation rate on the way up as well. very healthy job market. have a look at japan. , we will talk more about the currency in a moment. up 30ilippines open minutes from now, revised lower its gdp for the first quarter to 6.8%. i will be back with more. rishaad: china loosening that grip on domestic stock markets while lifting restrictions on assets. the shenzhen-hong kong stock connect will remove quotas. steve has more on that. what are the key takeaways? >> they have given approval for the second stock link with hong ,ong, this time with shenzhen
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following the debut of shanghai-hong kong connect. that and the lifting of quotas will open up china's financial markets. the stock link and shin will start in four months and give international investors access. china security regulator won't impose an aggregate quota on the will bed that total cap scrapped for the existing shanghai link. as significant as it sounds. the current quota not fully used , foreigners using about half of their quotas. chinese investing in hong kong? of their used 20% quota unfilled. there will still be a daily limit on purchases for both programs. link had been
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expected for more than a year, but delayed by china's market turmoil and capital flight. the decision indicates that beijing is confident in the stabilization of the economy and stemming of outflows. the ceo says predicting volatility is a tough chore. anticipate at this point or i do not wish to engage in a spectator of description of the market volatilities we will see. markets go up and down, crises happen all the time, elections happen all the time, and we may have a new president later this year. we could have a lot of things happen. >> limited access to domestic markets was a key reason the msci did not add mainland shares to its indices and its latest review. the opening of that link potentially takes its quest a step forward. rishaad: thank you for that.
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currency traders certain that the boj will not stand in the way of further yen strength. .et's get to tokyo here at the chances moment of people coming in and actually buying the dollar to support, or i should say weaken, the yen a bit more? >> it is quite clear that japanese officials want to raise that specter in the market. they can jawbone it as much as they want, but what is key is the u.s. response. the vice finance minister saying he has been in touch with his g-7 peers, but we have not heard from jack lew yet. that will be a key thing, is the u.s. at this point open to intervention by japan, because the permission of the
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u.s. side, this will not work. that is very clear. be thes not seem to level where people are really worried yet. maybe 95 or even 90, those are looking at. you know, we have just seen that it has been one-way path of leaste resistance has been for yen strength. is there anything that can stop it in your view? >> we saw some hint overnight with what might get in the way. part of the problem is the weak dollar, and in the absence of any sign that the fed could raise rates anytime soon, that just really opens up the lane for the one-way traffic, but the new york fed president saying don't be too complacent. we could raise rates next month. if that kind of rhetoric
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strengthens and if the data on the u.s. side actually improves to support that, because it has been mixed and lately, then certainly we could get some support for dollar-yen, but really right now on the boj side , stimulus on the fiscal and monetary side has disappointed. that is not to say that the boj is out of bullets, but right now people don't think governor kuroda can pull another rabbit out of his hat at this time. rishaad: thank you for that. strength andn talking of foreign exchanges is where the action is following record low rates. let's get over to david having a look at some of these moves. david: a good point there, the fed is also involved in this equation. it's not doing any favors -- we will talk more about that. in the meantime, look at dollar-yen.
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this chart takes you back to this time last year. the fall started in november and the trend channel is solid and clear. the green line is the 100 level. the blue spot was the post-breaks at low -- brexit low. we are above that at the moment. the question is how much of this is down to yen strength? how much of this is to the markets unwinding dollar positions? have a look at this function. this is how asian currencies have done for the past three months. u.s. dollar. it is a case of both. , not just asia, but major currencies as well with the exception of the pound,
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which has weakened for obvious reasons, but a function of the japanese yen strengthening as well, 8.5%, not worth laughing what iten you look at has done to the outlook on the japanese economy. a lot of this comes down to global uncertainty driving money back into havens like the japanese yen. you look at the bit gold has gotten so far this year. let's talk about the fed. yeah, people have started unwinding long dollar positions. but that has done is that it has driven yields lower. it has driven a lot of money back into emerging markets, bonds, stocks. that is another function i want to bring up. let me just get that, here come a bear with me. net portfolio inflows into markets in asia, and you can sort them based on asset classes.
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the top twoat markets in asia that have attracted the most inflows. you're looking at taiwan and south korea. from the start of july, between $13 to markets alone, billion. don't forget we are also seeing strength in the south korean won and taiwan currency, which is why there is another story we will talk about in a moment. the top forecaster for the taiwan dollar are expecting gains to end because of enter pension -- because of intervention. they are both export dependent economies. rishaad: thank you for that. some other stories we are watching, here is a round up. a shakeup at the top of the 100-year-old company? centennialuite the
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-- centenary for csl, an 18% drop. billion profit. share slumping, the market seemingly unconvinced by its earning guidance for full-year 2017. rebound in a 10% profits, saying the recovery driven by a sharp reduction of losses in its influenza business and demand for plasma products. csl shares have done well in slump, up to today's over 10% since the start of the year. directors declared a 3% final dividend at $.68, and said they would consider a further $500 million buyback, an increase in
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that dividend. evolution mining share slumping in sydney in a down market after reporting and $18.6 billion full your lost. a one-offue to acquisition cost and impairment charges related to the sale of its mines. the results missed expectations of a $179 million profit, but the underlying profit which strips out volatility and gold prices rose 114% to two 226.9 australian dollars. , aay's share price dropped drop in the ocean, more than 80% year today. bhp billiton rising after the world's biggest miner said they can see light at the end of this downturn. commodity prices have rebounded since tumbling to a 25 year low in january. bhp reported a record full-year
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loss of $6.4 billion, but toerlying profit jumped 95% $803 million. php shares rose in london trade after the announcement, up 38% so far this year. andrew mckenzie telling bloomberg that a lot of longer-term the you investors are buying back into this blue-chip stock. rishaad: coming up on "trending business", google taking aim at facebook and apple. just ahead, new comments from , doubt on whatls the doves have been saying. ♪
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rishaad: you are back with "trending business". what's happening with markets
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and analysis. watch, fedn on fed officials being pretty hawkish. did not definitively say when they are going to move. >> this is an open question. towardsets have shifted december. it is an interesting scenario because what we are starting to was the buildup of inflation pressure in the u.s., making people questioning as to whether we would be back on the table with september. the truth is we have seen from the proprietary data we look at, a bit of a slowdown in terms of price pressures. we had the q2 gdp print, which was not supportive of another imminent rate hike. the jobs numbers >> in isolation.
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at the will look underlying strength of the u.s., me and headline inflation numbers as they stand today. it can afford to wait and is happy to wait. the dovesing to get and the hawks fighting against each other, but it does not change the picture. we are still on a holding pattern. change: the pressure has from an international point of view. britain is no longer with the u.s. as it was before and raising rates. they are in the camp of more stimulus, more dovishness come if you will. what does that do in terms of limiting the scope for the fed to raise rates? >> it depends on how much emphasis the fed puts on international events. comments from janet yellen in haveast 12 months or so
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indicated a far more important role for global factors. i don't think that is the central point behind the decision-making. they will look at what is going to raisehe decision rates in the u.s. comes down to u.s. fundamentals bottom line. even though the normalization growth andthere, the inflation numbers are not strong enough for them to go in september, so why go early when you can delay and go towards the back end of the year or early part of next year once the election cycle is out of the way? print puts mark carney in a difficult position. abouteing forced to think cutting rates instead of raising them. >> that is the weakness of sterling feeding through. there are plenty of ford looking indicators telling us of the uncertainty on investments, the impact that will have on activity going forward, so i
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think he has one eye on inflation, but the other is on a potential slowdown, investment in particular, and how that feeds through into consumer confidence. i think he is more focused on that than one information print come of it does complicate things a little bit. the scenario in the u.k. is not as weak as what you might expect and eigh environment -- an environment of interest rates. rishaad: we are just getting rate, thereference strongest since june, 6.6056. it is reflective of dollar weakness. >> it is really a reflection of dollar levels, though strength, and dollar weakness. i don't think the picture changes in the medium-term outlook as far as the yuan is concerned, that the fixing is partly a factor of what has
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happened to the dollar. it is a dollar move in that respect. most global currencies are being driven by the dollar, so strengthen weakness of risk currencies depends on what the dollar is doing on a particular day. rishaad: would you say that about the yen as well? >> certainly. we are seeing the shift towards a delay in terms of hiking having an impact. seeing a paring back of expectations in the u.s.. if you look at the rates differential perspective, that is working in favor of japan. the surplus environment is another factor, and also this view in the markets that japanese policymakers, we keep saying this, they are out of ammunition, but they are limited in terms of what they can do right now. this surface environment and paring back of expectations in the u.s. is having the usual impact on the yen, gradual strengthening.
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rishaad: it seems no matter what they do, that they cannot get it to weaken. actually, going in there, they've done a bit of that on the qt, but do they do more of it? >> it is probably a futile move. the only way to get the yen weaker here is two ways. one is external, and one is domestic. the domestic one is they have to surprise with policy. they have surprised on a number hadccasions and it has nothing but a short-term impact, so questionable if that could work. if the fed becomes hawkish come the dollar-yen becomes higher, but the likelihood is low. treading watere tradin in terms of what they can do. when you look at surplus
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currencies, a lot of demand right now, so the yen is probably range bound. ofon't see a breakthrough 100, but if the japanese want to weaken the currency, there is nothing on the horizon that says it is coming. rishaad: great having you on the program as ever. coming up, a busy year in some of the megamergers and the scrutiny they face from regulators, next. ♪
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china's antitrust watchdog usually takes a tough line on proposed mergers between dominant industry players. didi. with uber and tom mackenzie has been looking into this. why would the watchdog give them
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such an easy ride? top of the list is the fact has turned itself into a national champion, and the government would be unwilling to derail the deal because of that, but there are other important factors. the regulatory environment is maturing, officials trying to get their heads around the laws and rules of the sharing economy. i inrtainty benefits did this respect. also comes under the threshold that would trigger an antitrust investigation. the company has been spending money on subsidies to carve out market share. then, the regulators may also consider didi as part of china's wider transport system, 90% after this deal of the ride isling sector and if it
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considered part of the larger transport sector, that helps as well. things differo for big multinationals with an eye on china? they have not had an easy time of it, have they? >> that's right. inbeve up between ab and miller. they looked at two areas, one was the regional impact. the second one was looking at the portfolio rands owned by both companies -- brands owned by both companies. things should be a warning sign for other multinationals looking to buy assets or do deals in china. rishaad: nice one. tom mackenzie in beijing.
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shenzhen making the connection, ubs securities here to discuss the link with hong kong. we have reaction to do that. shanghai underway, hong kong as well, the opening numbers are next. ♪
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♪ gaining regional stocks , brent crude near $49, the yen retreating after breaking $100 per the second time this year, snapping a two-day drop, energy shares helping things along there. declines in u.s. treasuries after the new york fed chief william dudley said a rate hike could come as soon as next month. afterore dollar down exports plunged the most in four months, non-oil shipments dropping 10.6% in july from a year ago. orders from china, indonesia, and the nine states all down.
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itsapore cut the top end of 2016 forecast after the economy expanded less than estimated in the second quarter. removing quotas from its exchange trading links and a step towards opening markets, regulations won't oppose an aggregate quota on the shenzhen-hong kong exchange opening in four months. shenzhen link has been delayed for more than a year. markets, reaction when it comes to that connect story. complex story. we will talk more about this. think back to when we did get the hong kong-shanghai connect. 2014, but it was not until april when the market peaked. four months from now come in december, then four months, we will flesh it out for you and a moment. the nikkei 225 outperforming
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today, oil and gas. oil above $36. have a look at what is happening , a decent bid for oil and gas, .71%. you have the services and the explorers all seeing a bit. have a look at the open, any reaction? roughly a down day. have a look at the early movers. some of these casino stocks on the way down. aia leading things off. watch out for tencent, hsbc. forextion is in the markets. given the broad
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dollar weakness in the past 48 hours. reaction you are seeing a cross the offshore space. dollar strengthening, then , 6.6324 is your level now. we talked about these horrible export numbers out of singapore. you see the weakness in the singaporean dollar. we are touching the 10 day moving average. very quickly, dollar-yen is your , 100.4n the fx space sixes or level. level.46 is your if they see extreme moves, they will act, of course without defining what that means. kong-shenzhen connect, we will follow it in the next four months. given thehina
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greenlight for the connect, our next guest thinks the link could be a sweet spot for stocks. thank you for joining us. well, what was your reaction and what is the message it is sending out? um -- canaad: i don't know if you hear me. let me try again. let me try again. when you heard the announcement about the link, what was your reaction, and tell me what you think the messages that the chinese regulators and the government there is sending out? yeah, the news itself is not a surprise. the market has been expecting that. is --proval it self
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there is in no longer a big concern on the capital outflows situation. in fact, the shanghai-hong kong in 50 billioned renminbi net flow. the regulators are fully happy to launch a new program, which could facilitate more offshore investment for chinese investors. rishaad: absolutely, when you link, thee shanghai northbound quoted tends to be used more than the southbound, but when we get -- this reflects china's support for hong kong, but there is a political dimension because the shanghai connector was announced before the occupy protest in 2014.
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us, ok, hong kong, right, things are forgiven now and this is a way of patching things up? regardless of the political concerns, the desire for chinese assetsrs to buy offshore -- we estimate for the chinese , it istional investors on the offshore assets. for the chinese individual investors, less than 1%, so either in hong kong or other markets, i think domestic -- and the connect program is very well designed as for experienced investors to test the water. from that perspective, it is a
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very welcome move to hong kong and chinese investors. rishaad: what about msci? thisthey be looking at closely? does it pay the way for them to reopen perhaps the dialogue there about including chinese ?hares in their basket t , the impact is mainly on the southbound trade. the msci inclusion, there is the valuation and the liquidity. these are due to some issues in asian markets. stocks, the shenzhen trade around 40 times pe. i don't think global investors would be interested to buy these
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very expensive stocks, even though growth could be a above 15%. the regulators have tighten the regulation on speculation of small companies. this time they actually exclude the very small companies by putting a minimum market cap threshold. trades areeculative no longer, global investors will be interested and the msci inclusion will be more realistic. right, the hong kong exchange down 3%, extending losses. thanks for that. a keyarket stability is concern for the pboc, known for being ok, but has cleared the air recently. what is with this new openness here? >> this month, we have seen
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numerous statements from the pboc guiding the markets, speaking on things like credits. that is unique for the central bank. at theere all those cars beginning of the year to improve communications after that shock currency devaluation this time last year. theeast when they feel market is getting something wrong, they are doing it. we had those terrible numbers on we had but that night reassurance from the pboc research departments chief economist to say hold the line, everything is ok here. had a pbocwe statement saying the same, so there has been increased chatter on the domestic policy front to clarify expectations of policy. rishaad: communication is key. a lot of western central banks have been aware of this, china, are they coming around to this? >> perhaps.
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the one thing they have not communicated is why they are communicating. maybe they are taking on board fromriticisms and analysis outside parties saying we need to hear more from you. they have cut their interest rates to record low levels now. once you have less firepower in terms of benchmark interest rate, you need to use your mouth more to guide the market. one key difference for the pboc is that it is not an independent central bank. it can be overruled by the leadership and forced to do bengs that it may not advising the leadership to do, so there's all only so much for guidance because of the limitations of leadership. rishaad: thanks. you make of this newfound openness from the pboc? of thisdo you make newfound openness from the pboc? the regulation on
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the cross-border flow? rishaad: in terms of them upping the ante and communicating more with the market participants. think the boc has made a lot of efforts to make the pricing mechanism of the exchange rates very transparent to markets. right now they are quite with somethat even global, external shocks, there will be no panic capital outflow, and they indeed have quite successfully restricted the capital outflows and the capital accounts. tohink the pboc is ready relax a little bit on the cross-border investment vehicles. rishaad: absolutely, but they want to talk more about their monetary policy. they say they are going to do that.
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that must be welcome for investors are people who invest with you, for instance. >> yes. the pboc is quite alert on the so that asset bubble, is a major reason for them to be on monetary policy at this stage. the chinese real economy demands for new loans, new liquidy, is weak, so if the monetary growth is very rapid and the liquidity becomes excessive, it could easily lead to asset bubbles, so at this stage, the pboc needs to make a with respect to property prices and commodity prices, and at the same time manage exchange
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rates. it is a delicate balance, but so far it is a helpful move in terms of guidance and the excessive liquidity to offshore markets in an orderly way. rishaad: thank you very much indeed for that. joining us from shanghai from ubs. a quick check on some other stories, crown resorts saying work continues on its proposed de-merger. 406 million austrian dollars, slightly above estimates. 39.5perator paying austrian cents per share. chewingice, investors that one up, 5.3%. in gm resorts, well, acquiring more shares in its china division in a deal worth $325 million. the agreement sees the casino operator increasing its stake in
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mgm china to 50%. both companies will be paid $100 million and 75 million in stock. and talks with singtel about selling its stake in thailand's in touch. sources say the parties see improved political and economic stability and the country, and as an opportunity for this deal. both sides did hold discussions. it has a 41% stake and holds 51% of singtel. apple,squaring off with but will its chat app have the power to catch up with its rivals? ♪
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asia's largest internet
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company may hit a new record winter report second-quarter sales. $.10 net income is reported to rise. we have a look at what you will be looking at. profit expected to rise 30%, sales 42%, people looking at the growth momentum and their mobile gaming revenue sector and the advertisement business. economyoverall larger might have impact on growth in that sector, but in terms of market value, an all-time high. rishaad: what are the key indicators people should be looking at? >> if you break down the mobile sector, 7% growth quarter on quarter. the, in terms of
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advertising sector, the company has added social advertising, and so are a lot of expectations and growth momentum from that sector. rishaad: absolutely. i guess it is a tough environment to some extent, isn't it? we do have a lot of people though. that is the thing. >> they do have a lot of bargaining power when it comes with mobileplitting app developers for game makers, taking the lion's share often when they do split revenues. if you look at the margins, that is expected to be impacted because of the inclusion of more licensed games on the mobile games sector, but overall people are looking forward to what kinds of titles they have to add going forward and the new quarter. rishaad: ok, looking out for tencent, right. there we go. we are shrugging off what we saw on wall street.
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up twoadvancing, nikkei thirds of 1%. let's look at what is trending on social media. google launching a service rival to facebook and apple. this is google's answer to skype, and facebook's messenger, and face time on apple. take a largero share of the market because this mobile app will be used on android and apple's products. at the moment, facebook messenger only if you have a facebook account, and facetime only if you have an iphone or ipad. it allows you to call anyone in your phone. also quite a stalker-ish app that let's you see it live
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video of the caller before answering. if i called you now, i could see you are looking at your ipad. they are saying the quality is improved, but requires separate apps. google said they see communication as essential, whether that is text, picture, or video call. there has been mixed reaction on social media. one user saying why would we use google when we have hangouts. only difference is if you have contacts who don't have a google account. the other person saying this aock knock function is dealbreaker, seeing a person before you pick up. he can video chat his wife, who is resting upstairs, while he works in the basement. rishaad: get a life. appes, a different mobile
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to rival apple's facetime. push intotrying to markets by a loving anyone in your phone context to chat with them on this video call with this knock knock app. rishaad: the jury is out on that one. right, a quick look at business flash headlines. workforce,20% of its pointing to unnamed sources saying the chewing 9000-14,000 job cuts expected within the week, a cisco spokesperson declining to comment. they have been looking to shift from hardware to software based products. it is reporting fourth-quarter earnings wednesday. apple planning a new research and development facility in china. tim cook visited beijing. it will bring engineers from existing apple facilities, more than the number of corporate sites doubling since 2011.
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in china overtook the u.s. in 2013. whatsapp valued at $1.4 billion after raising funds, including tencent and foxconn. million in one of the largest series d rounds. hike integrates shopping coupons, gaming, and users and 40 billion messages every month on the platform. world'sell, the second-largest economy poised to become the world's biggest box office. china's movie magic is next. ♪
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shanghai films so
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surging on their trading debut, chinag the popularity of as the movie industry expands. it operates cinemas in china. , a performance to date market very of more than $820 million. it comes against the back drop of the country rewriting the box office bluster, poised to become the number one movie market. how are they evolving. to becomes projected the world's biggest movie market next year. they are tracking ticket sales on projecting what will happen in the future. that white line steadily increasing, and they are predicting ticket sales will 10.4 billion dollars
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next year, ahead of the $2 billion forecast for the u.s. rishaad: you have a per capita number vastly exceeding that of china, sorry. >> it's an example of the growing middle class in china and their spending power. movies are one of the fastest growing sectors as the country moves away from manufacturing and industry to a service-led engine. this is a perfect example of it. rishaad: hollywood was the biggest film industry and the world, churning out hundreds of movies. about the movies popular in china and what's driving the growth? >> earlier in the year, over the lunar new year holiday, a key time to release movies, the mermaid was released and took in $276 million over the holiday, hugely popular, ticket sales
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later this year, the latest the jason bourne movies, the star trek franchises, expected to drive up attendance. , we sawuarter falls in ticket sales, but overall they are growing, up 30% in the first seven months of 2016. billion in the movie and entertainment history. everybody is trying to get into it, especially locally made films. disney has said it wants to make a locally made film and out why next year. debuting onm today the stock market. they did well partly because it is an ipo, but in general the entertainment industry is saying -- a fast-growing one, and it
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will continue into the future. rishaad: coming up, cathay turbulence,for more a policy putting dent and profits. we have a look at what to expect. ♪
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♪ >> from our studios in new york city, this is "charlie rose." charlie: we begin with the 2016 presidential election . donald trump is seeking to stabilize his campaign after weeks of stepping on his message. hillary clinton continues to widen her lead in key battleground states. trump's campaign manager is also under fire. the new york times reported he received $12.7 million for consulting with the ukrainian president.


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