Skip to main content

tv   Asia Edge  Bloomberg  September 18, 2016 11:00pm-12:01am EDT

11:00 pm
could be two years away. gold climbs from a two week low amid speculation the fed will indicate a rate hike is coming before the end of the year. also, the u.s. conducting its biggest ever wargames in the pacific. we have a special report. haidi: watching the markets on the central bank bonanza week. boj, a plethora of other banks due out with monetary policy decisions this week. this is the only story in town. you would expect some caution, particularly japanese markets. they are off on holidays today. we are shaping up to see some pretty good gains. bye a look at taiwan, up 2.4%. well,suppliers doing very
11:01 pm
continuing to search on the back of that positive reception to the new iphone. here in hong kong, firmer footing. shares rising the most in two months. through,numbers coming very strong, driving developers in this part of the world as well. story, ae other major rebound from friday's low, driving the risk sentiment and asia. yvonne: thank you so much. our top story, august a bumper month for china property sales. despite attempts to cool down the market, the value of home sales jump 33% last month. let's go to tom mackenzie following this for us. yes, we saw some red-hot prices in august for property sales in china. cities, 64 saw
11:02 pm
price rises, compared to 51 in july and 55 in june. month on month gains. shanghai, 5.2% increase in prices month on month in august. that despite the fact that both of those cities have introduce curbs to rein in prices. we have had other cities as well putting in curbs. that points to concerns that analysts have said were there, which is when you put curbs and plays, it asked as a green light for some buyers to say these prices will only go up. there will be concerned at some levels that these curbs are not having more of an effect. we have this bifurcated property
11:03 pm
market, where certain cities are off.g prices ebb efforts by policy makers to spur prices they're apparently not having too much traction. this will prove something of a headache, even if positive for developers and construction materials in the short-term. yvonne: that's right. despite these curbs, it seems like prices gained in almost all tiers in china. our policy makers running out of options when it comes to the property market? bloomberg intelligence that this is a conundrum for policy makers very difficult to strike this balance that becomes a one-size-fits-all approach. it will not work. they have tried to differentiate
11:04 pm
place to put curbs in one and then to try to relax conditions and others. it was always going to be difficult to get that goldilocks approach. to be having at the central government level more focus on reining in some of these credit bubbles. mortgages pick up in august, surprising many. all eyes are on any action from the pboc as a result of these very strong numbers in august. yvonne: that's right. the pboc calling it a bubble. tom mackenzie, thank you so much. nobles seeking a strategic investor as the singapore listed commodity trader says it will take as much years to return to profit. let's get the details from haslinda amin. it looks like noble is looking for new capital. haslinda: can you believe it?
11:05 pm
looking for capital at even as to be asny is looking smaller trader with fewer assets. it is searching for a new strategic invested her and new capital. the issue is with finances. despite plans to raise $2 billion on track, it has cut jobs and sold shares, sold assets, even holding back cash from parts of businesses which are profitable, so the search is on for a strategic partner, but the founder of noble says it has to be at the right time. it has to be the right candidate. it has been difficult for the company for the last one and a half years, losing almost 90% of market you. its investment grade rating and has been slammed by debt and slumping commodity prices. is not over. watch out for what may be its biggest challenge between april and may next year. noble has to refinance millions
11:06 pm
net debtt lines, increased to $4 billion at the end of q2 from 3.7 billion at the end of the quarter before. all eyes are on whether noble will be able to. yvonne: a strategic partner is still possible. commodities have recovered some ground in 2016, so have shares of noble benefited from that recovery? haslinda: short answer, no. in fact, noble shares have extended declines because of liquidity concerns, debt burden, asset sales. i want to show you this chart. noble shares have spiraled down almost 60% this year alone. at one point, reaching the lowest level since 2003, but if you look at what analysts are saying come all six have a buy or hold rating on the company. on track tot is reposition itself as an asset-light company with high
11:07 pm
returning businesses, even though it has been a tumultuous 18 months. as the company sells parts of its business and sells others, it shrunk from eight $10 billion company to $1.5 billion. yvonne: haslinda amin live from singapore. thank you so much. a closer look at markets, almost green across the board. >> it seems that risk is on the table despite caution to be expected given that it is boj week, fed week, and other central banks around this part of the world set to release their monetary policy decisions as well. there is a sense, at least when it comes to the fed, that we will not get a move in september. this note that came out from goldman sachs points out that the election risks aside, there ine been only two times
11:08 pm
history that the fed has raised without market pricing being at least 70%. at 55% for the end of the year, so it does look like the fed has more work to do when it comes to guidance if they do want to move. the boj, markets closed today, the yen trading stronger. is the dominant story when it comes to what is moving the markets. pretty much a sea of green, a lot of weakness from australia, down .3% after that false start, the technical glitch that prevented the asx from trading in the first hours of the monday session. take a look at some of these movers. some names we are watching, hanjin shipping due back in court this week. returned 13 ships to their owners. they want to offload some of their ships.
11:09 pm
the wall street journal saying they won't likely sell half of their fleet. that a jump ofng 90% for the korean cosmetics sold in china and hong kong, said doing very well. company seeing pressure to the downside, reporting its chairman has been summoned by south korean prosecutors, part of this wide range ring corruption and bribery probe into the conglomerate. yvonne: thank you so much. the policy decision from the fed and boj are dominating discussions at the investors forum here in hong kong. said the markets remain sensitive. the consequences of the financial crisis of 2008 are still spreading out here at interest rates ready to rise in the states. we could get something in december as well.
11:10 pm
it is a very sensitive market. the market is reacting every time you get a number. yvonne: a big shout out to my oma motter, northwestern university, pessimistic on growth prospects. >> what we have all been talking about way too much is a quarter-point increase in the federal funds rate that will have virtually no impact on the i think we have had had much too much pessimism. american growth is about the , why our productivity .rowth cannot be sustained can central more banks due to boost growth. we asked joseph stiglitz. and theare trying hard, fact is there is a limit to what
11:11 pm
monetary policy can do. they have said that from the 2008 crisis. policy andly, fiscal other policies have not been there, so they have been the only game in town. what we are now seeing, particularly in japan, is not enough. they will have to do something else. yvonne: that is the word on central banks. we have more next. we will ask warren buffett's energy company, the top investments that are fueling discerns -- returns. this is bloomberg. ♪
11:12 pm
11:13 pm
yvonne: china postal bank on track to become the biggest shares sale in the world this year. the ipo institutional sale attracting big interest. point 4 billion shares set aside for international
11:14 pm
institutions, five times oversubscribed. 80%erstone investors have of shares set aside for institutions. shortlist two or three potential buyers next month. has put itself up for sale as it deals with the biggest ever safety recall. it has asked bidders to submit proposals by this week. kkr and the carlyle group said to be among the suitors. opects from algiers say may call an extraordinary meeting if members reach consensus this month. says he isry-general optimistic about the upcoming informal talk, which he described as "consultation, not decision-making." talks will also be at the , fanning speculation that a deal to cap output may be agreed.
11:15 pm
berkshire hathaway is a household name, certainly among bloomberg viewers. it's energy arm is a major player, $80 billion worth of america's natural gas, wind, solar, and renewable. tell us more. what are the projects in this region. let's ask right now. berkshire hathaway energy, everybody knows his boss, warren is what but that vision is integrated into renewable energy. this kind of attention to the consumer, the end user. tell us about that. good startingery point.
11:16 pm
as an american utility, you are consumer centric. we have seen renewables as good for consumers. number one, they are a hedge against inflation. with a zero fuel price, we know what the cost of a solar or wind farm is the next year, 10 years, in 20 years. you can't say that for a natural gas plant. want renewable energy. some for environmental reasons, some for branding. they want the stable prices. we are seeing tremendous economic development with renewables. in iowa, we have factories building wind turbines. we are paying farmers as a secondary stream of income for these families. important for environmental compliance in the united states, but lastly and circling back in the most important point is we are seeing the prices of renewable energy at what we call grid d
11:17 pm
parity. angie: what is behind it? >> countries like germany aggressively pursued renewable energy policies and forced market changes. take a country like china, tremendous manufacturing come of which 10% was for domestic use. 90% exports of panels. that was not in a surly good for a large number of american tradecturers and lead to disputes, but ultimately terrific for customers and good for utilities that have wanted to deploy solar panels. angie: when we talk about adoption rate, we are not seeing it as quickly as a low price would suggest. is this a u.s. consumer driven applicablewould be
11:18 pm
to a growing middle class in asia? talk about that. what is driving renewables in the u.s.? first of all, we don't have energy policy. we have tax policy and environmental policy. those together drive energy. incentives, all the production tax credits or investment tax credits, that gives a benefit to renewables. number two, individual state policy drivers, renewable xrtfolio standards, producing percent from renewable energy. translate those two other countries, you have the paris accord as a large overlay, but it is hard to see -- individual countries have to decide on their tax policy. in the u.s., we have this sometimes ae,
11:19 pm
federal government that has not energy policy, but the state has been filling the vacuum. you have to go country by country. in asia, china making big strides in renewables. interested inare asia, what would you need to see to stoke that fire? >> first of all, i cap talk about individual acquisitions or anything like that. we are u.s.-based with assets in the u k, canada, and a legacy investment in the philippines. and a minimum, we would need to forhigher returns on equity a non-us investment just from a risk management, a political management, point of view given the fact we are u.s. centric. that would be a general comment. angie: finally, renewables, will it ultimately this place fossil feels? >> we will have to see. this election could be rather telling. a president clinton will
11:20 pm
continue the years before that of growth. by the way, president bush as goingor of texas got wind in texas, and texas is the largest wind provider in the u.s., so we have a long tradition in the u.s. a president trump has publicly expressed different views and even outright hostility towards president trump, we might see different policies, but remember you have the federal policy, states like california and many others that will continue to pursue renewable energy policies. angie: the will of the people drives the political leadership. back to you. yvonne: great stuff. some breaking news. interbank rate jumping the most in hong kong since january. spiking once again. we will continue to watch this
11:21 pm
one as markets digest what comes next with the fed and boj later on this week. raising itsiemens earnings outlook, but it could be a different story in 2017. we will speak to joe kaeser next. this is bloomberg. ♪
11:22 pm
11:23 pm
has raised its earnings outlook twice this year, but in the face of geopolitical uncertainty, joe kaeser is remaining cautious. he spoke about life after brexit , negative rates, and a new era of adaptability. >> i want to make sure the company becomes more adaptable, not necessarily bigger, not messerli faster, but more adaptable. in the future, speed will become faster. is even higher.
11:24 pm
it is a tough environment because everyone is after efficiency, not so much capital spending. there is a lot of uncertainty in the marketplace. this is created by the geopolitical tightness in the world. anotherl be yet complicated year. youinda: what exactly are concerned about geopolitics and what impact on your sales or earnings? guidancee laid out our ,or 2016 in november 2015 people ask me what is the single biggest concern about achieving your guidance. competition, technology? i said it is neither. it is about the geopolitical environment which gives a lot of uncertainty to our customers about investing into the future.
11:25 pm
if people don't invest into new manufacturing or renewable energy or new health care technology, these are our revenues and bookings. unfortunately i have to say i wished i was wrong at that time, but if i look back from then to today, the geopolitical uproa has beer has been rising. haslinda: how has it impacted your decisions for the future? >> we have to deal with brexit. must nother hand, we jump overboard and say it is all terrible. it is not. however, we do need to know the milestones going forward. yes or no about the brexit or need to know what exactly it is. all i need to know is how long
11:26 pm
it will take until people make certain decisions about something. it is a concern. i wish brexit would be the only concern we have. haslinda: like perhaps negative rates. >> if you have money and no yield, what does that tell you? temporary, new normal? i don't know. need a fresh look from the capital markets about what is a desired yield. haslinda: with the negative rate environment, what will be your priorities for cash? >> invest, invest. invest in opportunities, innovation, requalification of our people. yvonne: that was joe kaeser talking to haslinda amin in singapore.
11:27 pm
markets in the asia-pacific, hong kong seeing some solid the yenp close to .8%, overnight interbank rate jumping the most since january. ♪
11:28 pm
11:29 pm
yvonne: the top stories this hour, attempts to cool china's hot property market having limited impact here at home prices continue to rise and all but six cities. the value of home sales rose that the fastest pace in four months, up 33% year on year. and lendingchases have yet to offset sentiment. noble group shares enjoying a lift after the commodities traders said it is seeking an investor and is on track to raise $2 billion. it warned it could be another two years before a return a profit. the commodities route and a second-quarter loss have cost
11:30 pm
shares to slump. shipping will return , but vesselsiers still stranded at sea. court hears the company's application for receivership. shares have tumbled 60% this year. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. let's get the latest from the markets now. up in whatre shaping is turning out to be a good day of gains for asian markets. there is caution ahead of this week of central bank activity, the boj, also decisions from new zealand, due out with monetary policy on thursday, giving back earlier gains.
11:31 pm
we are also getting central-bank meetings for indonesia and the philippines. missing is japan from the session, on holiday today before the boj meeting kicks off. that, take a look at gains in hong kong, driving .8%.r, the hang seng up by a lot of buying from chinese stocks listed here in the city. property developers doing well on the back of strong property numbers for august. h shares jumping the most for those companies. korean stocks also seeing upside, .6%, tech stocks driving the way regionally. taiwan, the apple suppliers pushing the market out. this recovery in oil is driving
11:32 pm
the markets. the comments from the opec secretary-general's and could get a formal meeting. there are hopes of the supply glut being resolved, and not is driving sentiment for the monday session in asia. boj begins a closely watched policy meeting on tuesday. observers can't agree what the central bank will do, some predicting a complete overhaul of stimulus. analysis indicates a further rate cut is highly unlikely. david is on boj watch and will be in tokyo for the decision. is there anything we can say with confidence? david: we have to make this quick because i have to catch a flight. there are lots of things they can play around with. that's why this meeting is quite important and relatively closely watched. there is a policy review going , crating speculation they
11:33 pm
might do an about-face. we don't know. a few weeks back, governor haruhiko kuroda said there won't be a reduction in stimulus. will they take rates below zero further? have a look at my bloomberg. compares the slope of the curve, especially when you look at it now compared to where the curve was before the last meeting in late july. it is steeper. that is one thing. one thing i want to point out are those two boxes in the bottom left. the blue one was the distortion created in january when they took rates below zero. what we have seen in the past theweeks or so is that markets start to price out that distortion. in other words, we are no longer looking at an inverted curve. more of an upward slope, especially at the shorter end of the curve.
11:34 pm
that is number one. another thing i want to point out, have a look at my forward rates on the japanese yen. let me adjust this. the circles right here represent when the meetings took place. there is your latest one. essentially what this shows you is that markets are not pricing in as much a move in interest rates as they were in july. ,et me end on one more chart which marks the population right now, the oldest population in the world. a lot of money is being thrown at the problem, but it will not solve this, that japan has the world's oldest population. it will not make the population any younger if you throw money at the problem. yellow is where the world averages. at 18%. is 15%, europe
11:35 pm
or 19%. thank you. gold has risen from its lowest ahead ofwo weeks policy meetings at the fed and boj this week. trading higher.hanging we saw hedge funds dumping gold at the fastest rate in more than three months, adding to speculation that we will get indications of a rate hike before the end of the year. our bloomberg commodities editor joins us now. the rebound now. what is going on? bit of there has been a a rebound this morning, but the inflation data on friday was higher than expected, pushing up expectations of the fed raising interest rates in december. 50%, odds are now above meaning a strengthening dollar,
11:36 pm
and also goal does not pay interest like the dollar and other us-based assets, so it will be bad for gold going forward. yvonne: that is bad news for gold in the short-term and long-term possibly. how are investors behaving? is it basically don't fight the fed? said, there was a big selloff last week, hedge funds and other investors reduced their long positions in gold by the most in more than three months. gold in had exchange traded funds come off the most. also interest on futures has fallen for the sixth straight day, so certainly investors voting with their feet there. it is hard to say what the picture will be over the long term. what are analysts saying
11:37 pm
when it comes to a longer-term outlook then? ofthere is still a lot long-term gold bulls out there. bill gross said recently that golden real estate are the only real investment options at the moment because of the level of on the yields. that people are saying gold is the only place to be at the moment. you do have hand, people who are bearish about it and don't see much of an option for rallies. several are not so bullish about gold, so there is division. and negativeof low interest rates, a lot of people are still bullish about the gold price. certainly we do see some people taking profit ahead of that fed meeting and imminent rate hike. twitter sued by a shareholder
11:38 pm
over claims it has misled investors on its growth prospects. the company has failed to live up to his 2014 promises of hitting 550 million users. twitter had 300 million users as of june. the case is seeking class-action status and comes has twitter is struggling to compete. , steadily rising and japan since shinzo abe took office. employees that major companies got a boost of more than $8,000, while services and energies producers saw a 15% increase in bonuses, manufactures and still makers took a 10% cut. takes over at the reserve bank of australia today. he joined in 1980 while still at university. he was deputy governor under
11:39 pm
glenn stephenson's 2012. challenges on inflation targets, but is also known for concentrating on asset bubbles and financial imbalances. in theckdown on handling philippines has done little to hamper the ambitions of one casino mogul, who has announced plans for a new $418 million resort. 's rulesthe president have helped his business. >> it helps the casinos. the licensed casinos that have invested a lot of money. to see you. the president's crackdown on online gaming has not
11:40 pm
deterred him. >> no, it hasn't. help the large-scale casinos. the crack down is focusing on the small-scale online operations. can cost up tono $1 billion. the focus on the crackdown is due to the fact that small-scale operations are sometimes near churches are schools and hard to tax a regulate. omberry could benefit. yvonne: it sounds like he is doubling down on the philippines. tell us more about this new investment. ry plans to build a
11:41 pm
$418 casino and the northern part of metro manila. it could take up to two and a half years to build out. it gives them access to markets north of the metropolis. this is in light of a pullback from certain markets. expansion plans in cyprus and south korea. it all about the slowdown we see in macau? >> i think so. signs that the local gaming market is showing the recovery. the tables and slots are currently at. full capacity. it is the first time they recorded profits after five straight quarters of losses.
11:42 pm
some analysts are betting on the president to deliver on its infrastructure promises. phase one of the project is set to open on september 22, but this does not mean there is zero upside from foreign gamblers. they have seen growth in foreign visitors from countries such as china, which has been the trend since the election. he notes that improving relations between philippines and china can be a boost for bloomberry. yvonne: all right. thanks. where should investors place their money? it is the question we will be putting to our guest next. this is bloomberg.
11:43 pm
11:44 pm
11:45 pm
a quick check of the latest business flash headlines. resident putin hails the victory of the united russia party with polls giving them half the vote. his popularity remains high. sanctionsternational helping to push the economy into recession. turnout was 40%, down from 60% five years ago. iran expects washington to grant licenses that should clear way for the purchase of 200 new planes. its aginggrading fleet and agreed to by 80 boeing jets. airbus jets have 10% american content and require export
11:46 pm
licenses from the u.s.. looking to delay the recall of one million vehicles fitted with takata airbags. they want to push back the recall by a year saying certain designated models are less risky than those linked to death and injury. it will continue to conduct a long-term study. welcome back. great to have you. boj and fed top of mind. much to do about nothing. will we cancel david's flight tonight? if nothing happens, i will still see you on friday. >> nothing then? any reason for either of them to do anything at the moment. i think the boj has gone through their review, and people should
11:47 pm
be reminded that they are awaiting a huge stimulus fiscal package from the government, which will be an active starting in october. the boj loves bonds. i think it is the right move to take a little bit of the load off the shoulders of monetary policy and loaded onto fiscal policy. little foreign debt, like china, so it is not an issue. i am not too worried about that. >> we talk so much about the fed in japan. i want to talk about something different. you continue to like emerging-market that. what market should investors be putting money into? >> our favorite market in the
11:48 pm
last 4-6 weeks is india. after getting a new governor for the reserve bank of india, who mold, acally in the same ol well-liked and together guy. that has given everybody the confidence they will not blow out the fiscal situation. i think it is very good and positive. indonesia,iland, basically the same reason, fiscally conservative, but not a stranglehold on fiscal policy. should not be concerned with currency exposure at the moment? indonesia, india? >> i don't think there is an issue there at the moment. the indian currency has been
11:49 pm
appreciating. currency has been appreciating more than they would like to see. so iesia has leveled, don't think there is an issue with emerging-market currencies at the moment. you are thinking if the boj does not active this week, october is the meeting you will watch. there is all this talk about how they want to steep in the yield curve, dell ieper into negative rates. deeper into negative rates. cpihe thing is you had a higher than expected, right? there is a situation where the short end of the curve, the yield went up a little bit. nobody expects the economy -- >> you are saying it is a one-off? it's not affirming of price
11:50 pm
levels? >> look at the actual annual inflation, 1.1%. it's half of what it is targeting. you talk about monetary policy handing the baton to fiscal policy. we are seeing the start of that in japan. ecb and the fed, do you see that being a global trend? >> they all have the same problem. , ultra-loosecy monetary policy was an emergency measure. this that, you cannot take away from the government's responsibility. governments have to stimulate growth, not central banks. that is not their job. >> we put so much on central banks, but what should the government be doing in japan? >> the government is already doing something. that is one of the important
11:51 pm
things, but the same thing should be happening in europe. germany is running a surplus. what is the point of that? german thinga very to do, and being german i can sympathize, but nonetheless at the moment, germany has ample room for maybe a tax cut to provide fiscal stimulus and that fashion, and that should be done. they should not be sitting on their banknotes. way that in the longer term you can have a situation in which central banks alone are running the world economy. they cannot. it is not doing the right thing. >> we will leave it there. coming up, a special report from as u.s.s above guam forces hold their biggest ever wargames in the pacific. this is bloomberg. ♪
11:52 pm
11:53 pm
♪ president obama's
11:54 pm
so-called pigot to asia has prompted rising tension with china, also intent on being the major player in the region. china and russia are holding joint or games that coincide with the biggest ever u.s. maritime drills in the pacific stephen engle's reports from lguam. is simulated wartime. the tarmac is a traffic jam. we know who has the right of way here. ♪ strato tanker's old tech, built in 1962, but a vital part of u.s. air superiority. extending flight and flight time is critical. >> without air refueling, their time would be cut in half,
11:55 pm
spending half as much time in the air. and dog fight, they burn the fuel quicker and we are allow them to continue to fight-tank-fight, allowing them to extend training time and maximize their time in the air. >> we have to go fill up the birds right now. the fueling station in the tell is cramped quarters. >> here she comes, the f-15. >> they call it parking as the supersonic f-15 crawls to the pond at 360 miles per hour, practically stall speed for these birds. they need to keep it steady, only 10 feet separate the two aircraft flying 25,000 feet over the pacific. to bouncether started and i had to focus with the receiver to make sure it did not pop up. i'll biggest threat is ourselves
11:56 pm
because of situational awareness sure we maintain positive separation from the tankers, receivers, and our super. >> i hope this never becomes routine for you. the fighters get their fuel 41-5 minutes on before rejoining their dog fight. we offloaded 88 thousands of ,000 pounds of fuel today. we headed home and did intercept a b-1 at where else? a traffic jam. ♪ maverickloomberg's stephen engle's. welcome back. are going on the fast
11:57 pm
track with the conversation around what the federal reserve could or could not do at its upcoming meeting. from thet to expect boj this week. apart from monetary policy discussions, an exclusive interview with the president and ceo of one of the leading hotel brands in this part of the world. we will get his take on the health of the hospitality industry in the united arab emirates and their plans for the region and beyond, including iran. this is a brand that tends to be a first mover and a lot of these markets, so that one worth tuning in for. yvonne: we will talk to you soon. thank you so much. in the region right now, hong kong, shanghai, and korea looking like this. green across the board. the hang seng up .9%, the yuan interbank rate surging in hong kong, adding to speculation that
11:58 pm
the pboc could be intervening b inclusion inn the basket. the shangh
11:59 pm
12:00 am
oil is on the rise and they will meet in our jeers at the end of the month. coolhe actual attempts to the market have had a limited effect. >> counting down to janet yellen indicating that a rate hike is coming this year.

44 Views

info Stream Only

Uploaded by TV Archive on