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tv   Bloomberg Markets Asia  Bloomberg  October 10, 2016 9:00pm-10:01pm EDT

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from bloomberg's asia headquarters in hong kong, this is bloomberg markets asia. rishaad: oil trending near a 15 month high. samsung plunges after suspending the galaxy note seven.
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rishaad: that is the currency's longest losing streak in 2.5 years. shery: bankers are arrested and charged in singapore as another lender is shut down. bank in falcon singapore, the monetary authority ordered to cease operations, they have also arrested the local manager. shery: arrested by the commercial affairs department. singapore isn't losing financial penalties on ubs -- is in posing financial penalties on ubs. failures andous anti-money laundering controls on improper conduct by senior
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management. we will keep you up to speed with these headlines. shery: we are 30 minutes away from the opening in china and hong kong. singapore and malaysia have just come online. we do have some positive sentiment from wall street. >> markets are tracking higher. dbs in just aon bit. we are following samsung closely. if you take some sung -- samson out of the equation, it would be much higher than it is. what happened yesterday, it fell more than 4%. thatflow not in favor of happening.
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taiwan is reopening as well. buyers, potential buyers, a very segmented of the market? will they shift to the apple iphone seven? markets in the asia-pacific are on their way up. gains on wall street as well. japan trading for the first time this week. the other market we are following his thailand. something to watch. what else are we following? dbs. are we getting any sort of reaction? not exactly the biggest fine. these are two big apple
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suppliers. have a look at bond yields. we are seeing yields on the way up. , 2.2% -- 2.26%, the highest in three months. a little bit of catch-up when you look at the yields. very quickly, a quick check on where we are for the offshore r&b, you want -- rmb, and the offshore yuan. it will be interesting to see how it plays out 15 minutes from now. record low for this pair. we are very close to that level. that,d: thank you for
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david. paul: oil hit a one year high in london as to leading producers said they would cooperate on limiting output to stabilize prices. supportspugin says he saudi arabia's plan. the saudi oil minister told bloomberg you would not be surprised to see oil at $60 before the end of the year. >> we will be talking to them and producers from opec and non-opec will reach a consensus. i am not expecting any time soon. the next couple of days, getting to that consent. japannew signs of life in
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. the trade balance came in above estimates despite the weakening yen. the pound resumed its decline on growing worries that the u.k. is heading for a hard brexit. the prime minister says she will trigger the uk's withdraw from the eu by next march. denmark to ease concerns. paul ryan is the latest senior republican to drop donald trump saying he will not defend or campaign for him after his .ulgar comments about women a new full shows hillary clinton in joining a 14 point lead going head-to-head. trump tweeted that paul ryan
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should stick to balancing the budget. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. i am people alan. this is -- i am paul allen. this is bloomberg. rishaad: directing falcon private bank to cease operations. beenis a bank which has backed by the abu dhabi sovereign wealth funds. let's get over to singapore. we know what has been happening with its connections to the middle east. this bank ceasing operations, being forced to cease operations . what is going on? thatat is right, all of today, confirmed this morning.
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imposing fines on all three banks. ubs slapped with fines for 13 breaches. falcon received the heaviest penalty, more than 3 million u.s. dollars in fines and was ordered to shut operations, the branch manager arrested. investigations are not over just yet. singapore has vowed to take stronger action. revoke thould license in july, criticized the banks for lapses in controls. linked toon in assets the alleged fraud.
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singapore is not alone. swiss prosecutors and u.s. authorities are also investigating into help billions of dollars may have been diverted. this fund was intended to fund development projects in malaysia. the saga continues. shery: singapore has warned banks before. what has the reaction than from those three banks? >> there is a sense of acceptance. it accepts the decision, that it should have taken more rigorous action. dbs also says it will take action to hold the responsible employee accountable. ubs says it is to put disappointed -- says it is disappointed that it did not do more. it is determined not to be used
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for financial crime. action will be taken for those responsible. the immediate response from the parties involved. highlighted serious failures in anti-money laundering controls. breaches include failure to adequate assess irregularities that involves customer accounts. failed to report suspicious transactions, which transpired within the bank. shery: thank you so much for that. ahead, under pressure, why twitter's chances of a sale may be cooling off along with investor sentiment. rishaad: traders bet on an oil output, we look at whether they can sustain the rise. this is bloomberg. ♪
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shery: we are half an hour into trading in singapore. monetary authorities ordering the closure of falcon bank. it was a public holiday here in hong kong. asian equities are moving to the upside. let's have a quick check of the latest business headlines. china stepping up its fight against the ballooning debt. policymakers admit corporate leverage is high compared with othemajor economies. china several debt has grown 465% over the last decade. itsy: ford is shutting
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mustang factory in michigan for a week. production has been suspended to match going demand. employees will resume work on october 17. workers will be paid during the shutdown. rishaad: facebook wants people to use the service at work. companies will be charged for the service based on the number of users starting at three dollars per employee for the first thousand. asian equities moving to the upside, getting a boost from the higher oil prices. let's get over to melbourne. great to hear from you. what is framing the debate?
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and framing investor sentiment? win overs been a big the past 24 hours. it should not have been a huge surprise that russia was keen to come to some sort of an .greement with opec nations russia and six other non-opec members were ready for a deal in april. now those disagreements seem to have healed between those two opec members, it seems more likely that a more significant supply cut deal can come together. will thew strengthening dollar play two markets here in asia? we saw a pause for the evening -- for the weakening yen. >> that is right. the most significant dollar focused cross currency that many investors are watching our the
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sea and why and the sea and -- cnh.nd the given the heightened expectations for a rate hike in december, investors should be expecting further weakening. that is what has happened in every situation when we have lied into a likely fed rate hike. yenakening of the chinese in august last year was driven by market expectations around a september fed rate hike. is 6.7 -- many people have attempted this to be the line in the sand. does that remain the case? >> i do not think so at all. we are sitting at around 97, a good chance it pushes up to 98
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or 99 as we head into almost certainty of pricing and for a december rate hike. the u.s. dollar does continue to strengthen. it is not impossible to see it trading with a 6.8 handle. shery: when we first talked about the chinese yuan joining the imf basket of currencies, i predicted a stable yuan. now we are seeing drop to fresh lows. we going to see a more event driven yuan going forward? c, theu listen to pbo s longer-term game plan was to have a much wider currency band and a much freer traded chinese yen. that is the ultimate goal for them. stability is probably not what
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they were going for. certainly, there is a lot of chinese domestic pressures on the exchange rate as well. significant weakening of the cny over the past 18 months has helped immeasurably in battling some of the deflation. we have seen pmi crawl out of the depths of negative territory. a huge factor in that is the lowering of the exchange rate. the yuan assenting scenting at the lowest since september of 2010. sitting at the lowest since september of 2010. rishaad: how likely are we to see the dollar strength continue? why suddenly are we geing is? steadily, we are seeing market probability
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pricing for a december rate hike . the fact that you saw three dissensions from the fed in the september meeting. it shows you that the hawkish members of the fed are very much ready for rate hike now and the midpoint of the fed and the more dovish members will be prepared for a rate hike in december if the u.s. economy continues where it is at the moment and we do not have any major upset. you are starting to see the bond market probability pricing crawl up to 70% and that is the key level. we have not had a key level below the 70% probability line. it is quite interesting. you would expect to see a pullback in emerging markets. alongside that, we have had this opec deal and this huge rally in
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oil. the moves are a bit counterintuitive. course, that is unlikely to continue all the way up until december and you might think some of these commodity related currencies have a bit of a pullback as some of the stock prices may struggle in a high u.s. dollar environment. unofficially kicking off the u.s. earnings season. that starts on tuesday. what clues are we going to get on the health of corporate america? much set to see a noticeable increase in materials companies earnings and the fact that we have had -- we have seen a big bounce and commodities prices this year. we have been seeing a steady climb s-- a steady
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ince. key thing for investors, they want to be seeing improvements because it has been a very long period of consistent negative earnings growth and you are hoping to see the glimmer at the end of the tunnel. that is the key thing for investors. rishaad: we have to take a break. samsung is thinking today, having all but given up on the note 7. we take a look at the latest concerns. ♪
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shery: this is bloomberg markets . we are minutes away from the start of trading in hong kong and shanghai. hong kong futures looking like this, up 9/10 of 1%.
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coming back from a holiday. sentimentme positive filtering through from wall street as we saw gains across the board. gold seeing some downward pressure, down a quarter of a percent. the biggest weekly drop in more than three years. shares in samsung taking another hit at the moment. down by other 4%. companies asking partners to stop selling the galaxy note 7. urging users to power down and store the device. stope advice is for you to using the device whether it is the original device or a replacement device. stop using them on planes as well. retail partners around the world to stop selling and exchanging
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these. t-mobile,en at&t, carriers in the u.s. will stop selling the note 7. yesterday, samsung met with the state run south korean agency for technology and standards and they confirmed the possibility of a new defect with the note 7. ofleast five new incidences catching fire are being investigated in the u.s. called a recall at this time. rishaad: what does this company do next? is it about damage limitation? the brand equity?
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>> some analysts say the best way to drop the galaxy note 7 and move on. new models of the phone are due in the next six months. focus attention on that instead of trying to repair issues with the note 7. meaningless to continue producing the note 7 at this stage. on monday, at the news came out about some of the carriers will stop selling it, shares dropped. you very much, rosalind chin. up next, we will take a look at who is raising the alarm.
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why goldman sachs is concerned about money, which is flowing out of china. we have the market open in hong kong as well as in shanghai. this is bloomberg. ♪
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rishaad: this is bloomberg markets. singapore's monetary authority ordering falcon private bank to cease operations in the city after resting its local manager. also finding dvs and ubs for anti-money laundering. the actions follow investigations. shery: samsung had its busy -- biggest intraday fall in a month. more leading carriers drop the
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device. their baby -- there may be a new defect in the phone. balance was trade the equivalent of $2.3 billion. shery: markets across asia are rebounding from two days of losses. david is monitoring the market opening of shanghai and hong kong. david: most markets were open yesterday, three major ones and those three which were shut yesterday are all up and running. india is closing up shop today. we are getting a decent tailwind out of wall street. you are seeing oil come off as well a little bit. that may be playing in, it is
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very complex. risk appetite is dialed down as we make our way into the mid-part of the morning. justost the index, we talked about samsung, down over 4%. seng, 7/10 of 1%. shanghai just about flat. great day yesterday with the exception of property stocks. we are looking at tests to be conducted between october 17 and november 9. out with a few
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things, chinese banks may need to raise 1.7 trillion u.s. andars in light of rising the consequential increase. rishaad: just getting more headlines on the falcon bank being ordered to shut down in singapore. one local manager has been arrested. it is the swiss financial supervisory authority making a statement, it could be effectively a fine here as well. falcon will have its license withdrawn if there are any further breaches. it will be banned from having relations with foreign partners for the next three years. authoritye swiss making that statement. paul: wells fargo says it will
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regain lost federal business within a few years following the fake accounts. california, illinois, and some cities suspend the dealings after the bank was caught opening legions of customer accounts. a penalty too pay settle. shares have slid about 8% since the penalty was announced. malaysia's biggest postal company says it is planning talks with alibaba on tapping a boom in online retailing. ao says they would like moderate role in alibaba's logistics. shares are up 85%. twitter shares have plunged 12% on news that disney and google have dropped plans for a bid. all three had hired bankers to consider an offer.
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jack dorsey has tried to rally the troops. in a memo, he says the company is the fastest place for news and information and twitter is only limited by a sense of urgency. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. data shows surging money leaving money and you on rather than -- in the yuan rather than dollars. what has prompted this warning from goldman sachs? a reddman sachs raising flag over what they say is the true extent of capital outflows. one number that jumps out at them is in august number. in august.untry that compares to just 4.4 billion on an average month in
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the five years leading up to 2014. somethingying this is that needs more attention paid to it. this cross-border scale is not just driven by markets and it should be thrown into the mix. we have a chart that illustrates what is happening. companies under pressure from authorities. move it across banks in hong kong. we know the holdings of the you one in hong kong -- you on in hong kong decreasing. goldman saying in august, if you look at the number 87% of all of the outflows from china went via the offshore markets. look at let's have a
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this. what implications does this have for the yuan? -- it is trading low to the six year u.s. dollar. policymakers are looking at a possible fed hike in december that would put further pressure on the currency here and we know the capital reserves in to 3.17r, hedged off trillion dollars. and some reserves were being sold off to support the yuan. if these offshore flows were not
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happening and they were being exchanged onshore, those capital reserves would be much lower. it will add more pressure on the yuan. expecting further depreciation of the currency by the end of 2016. rishaad: thank you for that, tom mackenzie. oil reaching 15 month highs, russia and saudi arabia say they are ready to cooperate on limiting output. russia, vladimir captain has joined -- vladimir putin has joined the growing consensus of opec that it is time to cut the overhang of this crude market. they want to join into an agreement. saudi arabia's oil minister said he thinks it is not impossible for oil to get back up to $60.
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everybody combined produces about half the world oil and is looking more likely they might be able to reach an agreement. shery: $60 a barrel by the end of the year? what are the chances of that happening? >> it is a good question. the oil price is hovering in the low 50's, at a 15 month high right now. funds have been more and more bullish on the oil prices lately. if you look at the amount of long positions for managed money in crude, the highest level since the summer of 2014. definitely thinking there is room for optimism for oil for the end of this year. whether he gets to $60 or not is anybody's question.
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rishaad: they see a high chance of a deal happening, may be self-defeating. where is the skepticism coming from? >> goldman looks at the output cut and they say there are details to be worked out. there are countries within opec that are exempt from it that are increasing production right now. question is, if you look outside of opec at the u.s. in places like canada, the cost of oil production has dropped in those areas to the point where if you see an increase in price, these guys might be able to start drilling again and producing again and in the long run that weighs down on the oil prices. goldman says, if an oil cut happens, you will see a higher price.
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out did not change that 27 -- 2017 outlook at all. barrel.rading at $53 a thank you so much for that. joining us on the latest on oil. we speak to a former google employee whose language learning users.imed 30 million this is bloomberg. ♪
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china and hong kong markets have been trading for about 10 minutes. let's check in on the market movers with david. david: let's have a look at the
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renminbi. 6.71. strongerttle bit compared to that. whatis a reflection of foreign investors can do when it comes to that renminbi. other things we are watching, when you look at what is happening in shanghai, a very interesting session. everything else was up with the exception of property shares. a little bit of a rebound, not really. let's see how things break down.
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continued reaction to all of these property curbs we are seeing. you couple this with the fact that you have weak growth and it might spur a little bit more outflows. it speaks to where we go from here when it comes to the chinese currency. other movers we are following in the region, hong kong reopening today. 5% pop in shares. a fairly rosy guidance when it comes to profit. there is a trading debut as well.
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2000 employees, up 45%. i am not sure what the pricing was. shery: david, thank you. we are getting the latest headlines on the singapore monetary authority closing falcon bank. we are hearing their response, saying they initiated additional measures to prevent future issues. the monetary authority withdrew the merchant bank status of the bank saying they have serious anti-money laundering controls. the branch manager also arrested there.
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rishaad: falcon bank owned by a abu dhabi sovereign wealth fund as well. that is falcon private bank. , thethe events of today monetary authority of singapore closing down the bank. shery: they are saying they will focus on growth in switzerland and london. language andglobal the desire to learn in china is booming. artificial intelligence increasingly running the classes. our next guest founded a program, and english learning app.
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thank you for joining us. so many of these different types of apps and other means of learning english there in china. what separates you from the others? we are a 100% mobile company and we are capitalizing on mobile devices. ai-based started as an company. fromf our cofounders was google headquarters and we have built speech recognition from the ground up. when users launch our app, they can speak right into their phones and get instant feedback on their pronunciation.
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way of a very unique practicing to speak english to begin with and that is what got us recommended by apple multiple times. shery: you were responding to a need within china. how did the idea come about? i left google, i was a product manager in california and when i left google, i had this idea of what i would work on. . joined a startup my colleagues kept asking, we came from the u.s., you speak pretty good english. ?ow should we learn
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we paid a lot of money to attend training schools and a lot of times we cannot go through the program, it is too hard to visit the local learning sisters -- visit the local learning centers. we cannot really keep it up. that struck me as maybe there is a better way to learn. came about inpp china. people are so excited and used to singing into their phones. maybe we can make an app that can help people speak. maybe the instant feedback mechanism is really important. speech recognition can come into
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play. language learning has been an art rather than a science for so long. it is driven by experiential methodology. we have a very personalized device and the advancement in speech recognition has reached certain point where we can digitize the entire learning path. in the past few months, we have launched what we believe is the only fullyst and adapted personalized course on mobile where students have a personalized learning path cater to what they need.
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rishaad: is that the commercial you have just given us? tell us how you monetize this. the subscribers are taking the free app. you have to get them onto the paid app. >> very good point. we started as a free utility app in the education space. we push out daily content to use for free. topics at various levels. people can pick and choose. we evolved into china's largest language learners community online where the learners can mingle with each other. very naturally.
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people pay on a subscription model. they pay for six month, 12 months. it is commonplace for people to py. you are virtually unknown outside of china. what are your plans to expand? >> yes. we kept it that way until this worldbecause china is the largest single market in language learning and now we have made some progress. we are going international in 2017. we think comparing to a lot of off-line players, we are much better positioned to go global.
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faster to cater towards the needs of different markets. rishaad: thank you so much for joining us. coming up next, slumping stock, why potential bidders no longer appear to be in hot pursuit of twitter. this is bloomberg. ♪
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rishaad: bloomberg markets asia. shery: twitter shares slumped as much as 12% in new york as potential bidders seem to be taking a step back. su keenan has the details. su: check out the chart, big drop as the deal interest said to cool off, or at least that is the perception of investors. bloomberg obtained a memo that
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jack dorsey sent to staff praising them for their efforts and talking about the company's independence while touting its live content and saying twitter's future is becoming the people's news network. shares were on a tear, double-digit increase on the doubling of volume. the company may be mulling over whether to make a bid for twitter. although this would be, they say, in opposition to some shareholders. we are getting the latest news out of singapore. the central bank is shutting down falcon private bank on anti-money laundering breaches. this is the second bank to lose
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its license. they are glad this chapter can be closed, that is falcon private bank saying that. ♪
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