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tv   Trending Business  BLOOMBERG  September 27, 2016 9:00pm-10:01pm EDT

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♪ it is wednesday, the 28th of september. i am angie lau. this is "trending business". ♪ angie: here is what we are watching for you this morning, debut day for china's postal savings bank, listing in hong kong. erases losses ahead of opec talks. saudi arabia says it is unlikely to freeze production today. elon musk planning a human colony on mars with tickets at
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$200,000 a pop. you can let us know which you think of today's top stories by following me on twitter. don't forget to include #trendingbusiness. today, butins close singapore, malaysia come online. here's a look at what is happening so far this morning. counting downre to the biggest ipo we are likely to see this year, china postal savings bank at the bottom of the hour. have a look at malaysia and singapore, both up by .1%, so a little upside to the asian markets. we are weighed down by the , japanesef by 1.3% equity stocks rallied monday post-presidential debate, so we have factored in that rally on
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the back of the presidential debate with markets perceiving hillary clinton as the winner. we are seeing the yen back in favor today, so weighing on the nikkei. in japan 1000 stocks with the dividend as well. we are often korea, some upside in australia. we are seeing a rebound in the crude price. new zealand is holding onto its gains, up by .2%. let's look at what is weighing down japanese equities. , oilu look at the topix and gas stocks down, both brent and, oil and wti in the off source session about 2% lower. off 2.7 percent, so
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widespread selling in the japanese equity market. having a look at the other the aussie is stronger, and we have seen more upside in the gold price, falling to a one-month low. it is down .1%. a mixed picture coming through for asian equities after that rally on wall street, some upside in our markets yesterday as well. is on oil, in focus a racing some of tuesday's losses ahead of opec talks. the cartel gathers with saudi arabia indicating a production deal is not likely. oil minister told
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bloomberg he is confident that rising demand will lift prices. >> three countries have special libya,ons, namely nigeria, and iran, having been constrained for their own respective reasons, will be permitted to produce at maximum level that makes sense, and generally would be the level they have achieved recently. this, then a to freeze will take place. angie: with iran unwilling to cut output, any freeze will have to wait till the meeting in november. opec ands that leave its desire to stabilize the market? saudi arabia and iran have
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killed off the prospect of any deal today. what we can look forward to will be more talk about what they may or may not do. angie: talking about talking. what we have seen, especially from saudi arabia, is softening in their hard-line stance towards iran, which makes the possibility of a deal in november better. the energy minister said there is a possibility, but it all has to come together, and getting consensus with opec has always been a problem. the prospect of a deal to stabilize markets seems more positive in that respect. angie: what is the outlook for crude prices then? >> the glut continues to be a problem. the iaea reiterated that the late 2017,tay until so still a problem for markets. prices are resilient, trapped
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the between $40 and $50 a barrel range. goldman sachs cut their fourth-quarter forecast to a $43 average. stable,silient, almost if you like. we expect prices will move in that range. to break out, you will have to see a weakening demand or cuts at thely or output, so moment, expect prices to be boring perhaps. but a same old story, story that remains exciting ever still. thank you so much for that. at some otherook stories we are watching for you today. ipo action at the start. rosalind: that's right. bank, thatl savings debuts in the next few minutes,
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the lender raised $7.3 billion in an offering more than two times oversubscribed. it is the world's biggest ipo since alibaba two years ago. china postal savings bank shares $4.76 hong at fou kong dollars. nike's results prompt concerns they will struggle to maintain growth. orders were up 1% against expectations of 5%. futures orders are a key indicator of demand. the company sees increased competition from rivals. nike reported profits of $.73 a share compared with $.56 per-share. the maker says profit margins were hurt selling discounted items, especially north america,
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where it has been trying to clear excess inventory. nike shares traded lower after hours. wells fargo ceo john stumpf forfeits $41 million in stock plus some celery. official investigators found employees created 2 million bogus accounts over five years under pressure to meet sales targets. thebank settled with government, paying $185 million in fines and penalties. angie: china's growth in the third quarter was driven by so-called old economy. says thet beige book government's attempt to wean the country off manufacturing and
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resources stalled. malcom scott is here. what are the major findings? old economy is coming back to life across china in this quarter. it is a property-led rebound. the beige book confirms that. if you are a believer in the rebalancing story, retail services transport readings are lower, so the report is it necessarily negative, but it is that composition that has some people worried. importantly, employment a key ,eading looked pretty strong hiring intentions positive. upie: that does prop things in terms of stabilization, but how does that gel with the official indicators? >> the august numbers were strong. industrial profits up 20% on the year.
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thertantly, that feeds into in the of the deflationary cpi is marginally negative, economist expecting that to go positive by the end of this year. that is big news for companies abilities to repay debt. pricing power is good for companies and the economy. altogether, economists are ratcheting up forecasts for growth this year. shows 6.6%, upy from 6.5% angie: expectations. thank you very much. angie:angie: thank you very much. we will hear from jennifer lee and ask her about the search giant's plans to tap into technology later in the show. we will hear from pimco's regional head. what that means, next. this is bloomberg.
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to ourlet's return bloomberg markets markets most influential summit in hong kong. how are they navigating this negative yield environment? it is a tough environment. more than 10 or you and sovereign debt trading below zero, so the hunt for yield is on. , pimco's eric mogelof head of asia-pacific. how is pimco helping clients in this negative yield environment which we are expecting to see lower for longer? >> thank you for having me on. it is a pleasure to be here.
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it is a challenging market environment for investors. not only negative, but we're seeing compressed risk premiums and more ball until the, so it is challenging for investors. we have been encouraging investors to do three things. number one, focus on income. the marketat environment today, most investors total return will come from current yield, so make sure to focus on a diversified set of income oriented investments. the second is search for alpha. in a low rate up market environment, out for will become more important in portfolios. for those investors with the cap ability and capability to do so, look at alternatives. thirdly, be patient and keep some powder dry. we think there will be more ,olatility on the horizon
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which means a better interest point. it is tough to do that because it is difficult sometimes to be tactical. sherri: more volatility. we had the elections in the u.s., possible tightening by the fed. the short-term, there are in number of events coming up. you mentioned the u.s. political elections, the fed potential hike in december, but we would also look at volatility over the next 3-5 years as well. we are in an environment today where as you mentioned rates are low. we have low nominal growth. we have very high debt levels. based upon those factors and add central bank monetary policy is starting to wane in terms of effectiveness, we would say then investors should expect the next 3-5 years to be more volatile. we can't forget china
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when we talk about high debt level. we are talking about what could be more than $2 trillion, much more than official numbers. is this that problem a china issue or global problem? problem a china issue or global problem? china has a lot of resources to manage those debt levels. we would assume that will rise, we think china can manage the overall situation, but china's huge impact on the rest of the global economy, so interestingly enough as an example, at pimco, all portfolio toagers are always waiting hear what is coming out of asia from our local teams here. sherri: for example, this will be, the yuan included in the imf basket of currencies. you have that coupled with the
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hunt for yield. how does that affect china's bond market? already wellion is known and priced in, so we would not expect any major change when that occurs. our perspective is that we would the currencypect to continue to weaken over the a very12 months, but in orderly fashion, which is what we have seen thus far. sherri: when it comes to debt japan and the boj, now trying to control the yield curve. will they be able to do it? >> it is interesting. the announcement that just came is a big announcement, but as we isnk about it at pimco, it just a change in framework, not policy, so policymakers are still highly accommodative. what we think is that it buys the government an opportunity to
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potentially paper if yields stay where they need him to be, so we don't see a huge change. we think growth in japan will be relatively low. we think it provides policymakers more flexibility. do you think now that they are trying to control the yield, they will continue leading the global debt market? >> everywhere other than the , and even in the united states, we are seeing easy monetary policy. with the fed raising rates, policies are still highly accommodative, and we focus on that as well, but our perspective is that monetary policy effectiveness is slowly declining, and so our focus is also now on policymakers fiscal policy makers in terms of what they are going to be able to do to continue to drive growth in a global economy. is pimco taking
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advantage of this environment where we are seeing uncertainty, lower global yields? how are you taking advantage of that with your clients? >> that is perhaps the most frequent question we get asked. are negative, a challenging market environment, what should we do? we encourage clients to focus on income and alternatives, and again, keep powder dry. for many institutional clients and wealth management clients, we encourage them to diversify portfolios. next 3-5agine the years as having bouts of volatility, having a well diversified portfolio that generates consistent but safe yield is going to be an important theme for investors over the next couple of years. sherri: what is your best growth market here in the region? business, i would say in the near term that it is the asia ex japan wealth market.
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we are seeing double digit growth rates in private wealth accumulation, and for us, we are spending time, energy, and resources working with our clients in the region. we partner closely with private banks -- retail banks, family offices. we are also encouraged and engaging in thailand, malaysia, and the philippines. couple ofver the next years, that is an important growth market for pimco. thank you for your time today. , head of pimco's asia-pacific. back to you. angie: let's do a quick check of the latest business flash headlines. this broke moments ago, canada has approved a $27 billion lng project in british colombia.
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canada has ignored that there is no karen t from petra noss that the project will go ahead, but they did give national approval. didi puts millions into bike sharing. specify the exact investment. it would use the money to expand in other towns and cities. proton is said to have shortlisted as it raises turnaround money. several foreign investors are on the list with proton ready to
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sell 51%. the company is struggling with slumping sales and accumulated debt. some breaking news for you, hong hang seng index falling .5% in premarket. bank ipohina's postal remains unchanged, trading remaining unchanged in the premarket despite the hang seng falling .5%. a teaser little bit of for you are ahead of the official open of the hang seng index moments from now. we have a lot more coming up from bloomberg markets. this is bloomberg. ♪
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angie: this is "trending business". i am angie lau. the world's biggest ipo minutes away from trading on the hang seng index. bank of china raised $7.3 billion in its hong kong offering. in the premarket, trading unchanged despite the gray market yesterday, some downside. what is expected today? see putting much unchanged kongheadset $4.76 hong dollars. -- with bids at four dollars 76 hong kong dollars. strong institutional demand. the key going forward is will there be retail demand as well. this is 2.6 times oversubscribed, but there are concerns with the asset quality and the chinese banking system. let's bring up the page where we can see the offering.
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it begins trading in a few minutes. trading to start at $4.76 a share hong kong dollars. 12 point one billion shares were offered, raising $7.3 billion, ipo sinces largest alibaba in 2014. it has been a long wait for this, the fifth-largest bank in china, china postal savings bank of china. it is the largest bank in terms of branches, more than 40,000 branches. angie: we will be watching as we watch this ipo debut and hong kong. thank you for that. we will touch base with you again. coming up, the road ahead. we talk exclusively to baidu about whether they will do fine
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age of artificial intelligence. markets in shanghai get underway. we have the opening numbers next. this is bloomberg. ♪
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♪ angie: all right, there you have it. the postal savings bank of china, oversubscribed 2.6 times, and there you have the smiling faces of the of initials ready ng that bell as they get ready for the official start of the hang seng index about their open in 30 seconds. as you can see, they are ipoaring to celebrate the
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poised to hit the market here, raising $7 billion in this hong kong ipo that will be the world's biggest first timeshare sell this year. the beijing-based lender is selling at the lower end of the range. there you go. trade foral start of postal savings bank of china. it starts trading in hong kong today. time sharee first sale, the largest globally since alibaba priced at $25 billion in new york in september 2014. we have also been watching china postal savings bank very carefully here because in the gray market, it had been , anding yesterday by 0.2%
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so let's a see how it does today. raisedthis lender has 7.3 billion dollars in the share offering that was more than two times oversubscribed, 2.6 times to be exact. shares priced in hong kong dollars 4.76. they closed lower on tuesday, but let's see how they do today. we do have that open in hong kong in shanghai as well. some downside coming through on the hang seng, although we are hearing that china postal savings bank is up .2%. it was unchanged in the , therket at 4.76 offer price. there is downside on the open, down by .3%, casino stocks under
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pressure, but some upside from the gap plays today, a rebound in the oil price in asian trade. shanghai lower as well, down by point 2%, so essentially what we are seeing is this rally post-presidential debate fading in the asian equity market. move frome that solid the u.s. market responding to the presidential debate, really led by again in consumer-related that has practically been factored into the asian market, so some downside today. singapore flat, malaysia up by .2%, and philippines open flat. elsewhere, downside in those markets that have been open for quite some time, particularly in japan. this is a market that rallied significantly following on from , butally we saw yesterday more than 1000 stocks on the
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japanese equity market trading today, so that is weighing on the nikkei, down by 1.6%. ,he japanese yen getting more moving back into some safe haven assets. the austrian market flat. we have had movement coming through in terms of equity markets, but some upside in some of those energy players. are starting to see a rebound in energy prices, but there has been weakness from some of those cold players. let's look at some other stocks we are watching. i'm sure we have a lower third for postal savings bank to see how that is going. the yield in japan coming under pressure, down by 2.3%, then resolute mining has resumed
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trading after a capital rating down by over 8%. the gold price, weaker at the moment, down by .1%. some upside as i mentioned in ,he oil market, flat there $44.65, but it was getting more on the rebound, but flat at the moment. thank you so much for that. let's return to the bloomberg markets most influential summit, where we are looking at china's role in the age of artificial intelligence. we are live with our next guest on stage. on the brink of the fourth industrial revolution. artificial intelligence, currently cars being tested in that lion city, singapore. imaging,bout medical
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internet of things. if you don't have a clue, then it is time to get with it. in asia, china leads the pack, and they say that baidu dominates the space. jennifer li joining us this morning. good to have you with us. baidu is traditionally a search into a i andetting driverless car technology. what is the thinking behind that? >> it is very natural. as a search leader, we have a head start compared to other aayers, because to build search service, we have invested in infrastructure, collected along the years, invested in talent and technology. one of the key components to do ,earch is machine learning which is an arm of artificial intelligence, so over the years as we built the search service, we have built the core competency, our infrastructure,
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data processing, as well as artificial intelligence technologies. as we stand today looking into the future, we are getting into the artificial intelligence and are positioned well to do it. like artificial intelligence is a future growth engine for baidu, but there is no business plan for artificial intelligence. how do you run a business without a business plan, how do you make it profitable, who will pay for it? talk about artificial intelligence, it is a technology, and a technology until you put it into real applications and business is that it can transform industries, it is not a real business. as we look forward, obviously we have built the these core competencies as we built this search service, and many new business opportunities are going
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to come out of these core competencies. if you think about industries that we envision that could be transform, financial services industries, transportation industries. about autonomous driving, and frankly searches one application of artificial intelligence. and for artificial intelligence, the way to think about it, we think about it as electricity. if you look at how electricity has transformed the human society, that is how artificial intelligence will transform industry after industry, and we think it will provide a lot of create enhanced productivity and efficiency and bring profound changes. is ambitious from the sound of it. understand it, the technology will be launched by 2018. the only other company was such a time frame is tesla. why are you so confident you can do it?
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and can you take on tesla? is onenomous driving application of artificial intelligence. driving, which affects the automobile industry, we think automobiles are the next major computing platform. for us investing in artificial intelligence, we have been doing it for 4-5 years. >> you are saying you can win the game? >> it is an ambition for a lot of tech players. >> yes? >> that is our goal. our masso have production in five years. that is our goal. we have our first fully autonomous car driven on the road in december 2015 in mixed road conditions. after that, we have continued to improve on the technology, and
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we have many breakthroughs in recent tests, and we are a leading player in detection tests, so as we continue to invest in this area, working also with the auto suppliers, part suppliers, since her players, andensor build leverage our technology and maps. when you put these pieces together, baidu is well positioned. >> baidu recently won the right to test in california. are you late in the game? it is becoming a crowded space. vision that many people share with us. california isg in one. we do have a research institute
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in the silicon valley area. in china, we also do many tests. ral conditions are much more complex than other countries. the main market we aimed towards is that china market, and for autonomous driving, it will , the tremendous value issues it can address, traffic jams, pollution, and many of those issues can be helped by the autonomous driving, so of course we want to make sure we have multiple locations to test our vehicle to move forward with the technology advancement. what is china's approach to artificial intelligence? will they play less of a role compared to other countries? if i look at the past 20 years, the internet industry has been an important driver for china's economy. it has gone first through the pc
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age, and in the recent 2-3 years, the mobile age, and now we are looking at the artificial intelligence age. artificial intelligence is used today. people see that already. image recognition. >> how is china's approach different or is it not? >> these companies like us, we are going to be the technology innovators that will drive changes to businesses, traditional businesses. take an example like financial services. , we will be able to assess credit risks more accurately and granting runs more easily and faster. for private individuals and merchants to get access to credit for financing, and that is one way to drive the development of the economy, so isna's approach in general
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dependent upon these technology companies and the effort we have put in and what kind of innovation we can drive in what kind of applications that are actually going to be made real. so i think it will bring fundamental changes to the society. , hang on to that thought. angie, back to you. for those wanting to continue with our conversation, join us live on facebook. thank you so much for that. coming up, that locked in the seem to havee fx picked a winner from yesterday's presidential debate. more with hsbc's global head of currency strategy next. this is bloomberg. ♪
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angie: a quick check of the latest business flash headlines. the vast majority of sab
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backr's voters are said to the takeover offer. forward afterove wednesday's general shareholder meeting. they require 75% of investors, and shares advanced on reports. amazon looking to entice more consumers to its excellent digital assistant. cho digital assistant. amazon would likely lose money on the service at the current price, but may be a loss leader to boost gadget sales. its latestng smartphone can take the challenge to apple and samsung. premium devices
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and has similar features similar to the iphone, but costs less than half the price. the phone will go on sale thursday, but not in the u.s. xiaomi needs a hit after falling behind in its home market. let's get you back to the bloomberg markets most influential summit. we are standing by with our next guest, who is watching the forex markets if traders appeared to be backing who in the u.s. presidential race, so who did the markets declare the winner of yesterday's debates? sherri: we will ask david bloom, hsbc's global head of currency strategy. is who won the presidential debate according to what happened in the fx space. >> you don't look at twitter,
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facebook, all those social media. the temperature gauge is the peso. hillary beingy of elected, just watch that peso. that is the trump thermometer. you would not recommend the mexican peso because of the election cycle. >> look, you are taking a political chance there. india and you bought indonesia, you're not taking a political bet. hold onto your mexico, but you are in for a rough ride. offeremerging markets more juice than the mexican peso. unless you're trying to make a political statement right there. >> you could think you want to
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put on a trade when hillary wins, then you're probably selling the ruble and buying the mexican peso. bloomberg story today about the trade of mexico against the ruble because trump is more positively disposed to russia than hillary is. sherri: the japanese yen as well. it was thought it would weaken if hillary won the debate. >> you could say that, but the real juice, the sex and violence, in the mexican peso. talk about the juicy ones here in asia. it is all about high yielding currencies, or is there more to it? >> i think there is more to it. , would you going to do throw them into negative rates? that doesn't sound attractive. so we like the low yielding surplus countries, but also the
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high-yielding current account deficit countries of india and indonesia. we have this barbell approach. turkeying in europe with hungary. hungry -- sherri: something not very juicy is the sterling. >> i can offer you a big current account deficit, fiscal account problems, andical a big round doughnut. how many of those you want to buy? sterling is a core short currency. we think it's going down. also?: chinese yuan >> this currency will weaken a bit. is that a surprise to anyone? sherri: how much depreciation? 690. the end of next year,
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this year, 680. you get all those crazy ideas there will be this big depreciation. we give them the yellow card. this is a slow and orderly weakening of a currency, and wheat will think it will get less week than we previously thought. sherri: this saturday, the yuan officially included in the imf basket. will that give them more confidence? >> we think a long-term trade is 20 minutes in fx. china has a different mentality. everybody knows they are crossing the river, but feeling the stones.
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absolutely, this is a path to internationalization opening. it does not mean the currency weakens. realize that it may weaken a little bit. yen, whereing trade, is it going? -dollar is theo one that is boring, but boring is exciting. if you have no volatility, then the little kids can play. valor-yen, 95. -dollar, 110, putting us into bullish space. sherri: thank you for an animated analysis of the fx market. hsbc's global head of currency strategy david bloomhsbc's global head of currency strategy ,. . leap: coming up, one giant
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for man, details of elon musk's vision of human life on mars next. this is bloomberg. ♪
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angie: elon musk has laid out his vision for building a self-sustaining city on mars and what he calls an interplanetary transport system. it will require for rocket reusability and reusable spacecraft. the billionaire explained a ticket to the red planet would initially cost $200,000, but it would get cheaper until almost anyone could afford to travel. >> what i want to achieve here ,s to make mars the impossible
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something we can do in our lifetimes. way thatreally a anyone could go if they wanted to. i guess that is the important thing. a look at how elon musk's plans have been received on social media. this is an interesting idea. what do people think about it? he said it could be very dangerous and there is a high risk of death. angie: we are all due to die at one point or another. >> i don't want to pay $200,000 to do it though. a lot of people who attended this conference, people who are interested in possibly going into space or have an interest in this area, so one person saying mankind's destiny is to explore other worlds.
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saying, between the question and answers and last night's debate, i motivated to volunteer myself. sayinger person that elon musk was to send 100 people -- 150 people to mars in a single vehicle. that is maybe 3-4 months, a long time to be spending with 100 of your best friends. maybe not for everybody. than one reference to matt damon and his movie "the martian." this person saying shouldn't gettingk he focused on matt damon home before sending more humans to mars. thank you so much for
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that. coming up next hour, back at bloomberg markets most influential right here in hong kong for a chat with mark mobius. ♪ ♪
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♪ announcer: from our studios in new york city, this is "charlie rose." charlie: tonight, hillary clinton and donald trump faced off in the first presidential debate of 2016. it took place at hofstra university on long island. an estimated 100 million viewers were expected to watch the 90 minute broadcast, moderated by lester holt of nbc news. new polls show the contest is essentially tied. here is a look at some key moments from the debate. mr. trump: i am going to cut taxes big league and you are going to raise taxes big league, end of story. ms. clinton: i have a feeling that by the end of this evening, i'm going to be blamed for


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