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tv   Bloomberg Markets Asia  Bloomberg  October 31, 2016 9:00pm-10:01pm EDT

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♪ >> 9:00 a.m. in hong kong. 90 5 p.m. in new york. this is bloomberg markets asia. ♪ rishaad: on the retreat, asian stocks a plunge in oil prices with energy producers leaving big clients. officially -- the governor may shift
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legal posts on bond yields and inflation. anfinancials unveiling ambitious plan. rishaad: getting straight to the numbers coming up much better than expected. pmi figures coming through. improvements a big from the september figure. showing greater expansion. we were bracing for a takedown but it seems like we got more momentum. --e a look at that is quite a proxy for whatever happens in china. you are seeing a takeout when it comes to the aussie dollar. we have had good days of strength when it comes to the aussie.
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a much flat at the moment it -- pretty much flat at the moment. 29 minutes away from the start of the session in hong kong and china. haidi: let's look at how the australians are reacting. how is it looking? >> things have actually picked up. 51.2, very good number. compared of course to what we're seeing so far. look at the aussie dollar, we are coming up lopez the moment. let's bring that down -- coming up low at the moment. let me refresh it. every single sector was down. especially oil. mining stocks are now closed for the day. we were down as much as 9/10 of
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1%. 13 out of 17. let's go through some of these names. a lot of it comes down to what has been going on with the gold price, hence why we are seeing a bid there for some of these names. equity markets, we are seeing fresh. thehours from now we get rba. later it's the bok. story, with the drop in price of oil, which took the -- you're looking at u.s. crude. 46.83. we're looking at a spread roughly about two dollars. well.ng copper as
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48.64. a bit later on it will be interesting to see what that number now means for all of these bids. i guess to some extent, massive speculation across the commodities space in china. iron ore is about 500. china raised trading fees for time to makethird it more expensive in that market. just a few things we're watching. a very special number of mething we have not seen in a while. let's leave it there. rishaad: thank you. a reaction to the pmi number, much stronger than expected. haidi: let's go to first world news.
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paul: the bank of england governor says he will stay in the job until 2019 to help guide the economy through brexit. that actions of months of speculation about his future. they welcomed the decision and the pound hellcats. some conservative lawmakers had criticized his economic warnings ahead of the brexit vote, calling them put up. the white house has pushed back against accusations from some of democrats that the fbi chief is interfering with the presidential election. spokesman said's he would neither defend or criticize james comey's decision disclose he is reinvesting hillary clinton's e-mails. he does not believe comey is playing politics. of principle and good character. we do not believe director comey is intentionally trying to influence the outcome of the election. does not think he is secretly strategizing to benefit one candidate or political party.
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he is in a tough spot. korean prosecutors have detained a close friend of the president at the center of a scandal. he was held after turning himself into questioning. the president has been at use of allowing him to influence state affairs, including budget decisions. she may replace the prime minister this week in a bid to reverse her plunging popularity. china has raised coal trading fees for the third time in a week as it -- the commodity exchange doubletree's action fees for same-day trading on thermal coal contracts after raising prices twice leslie. trading volumes have risen to unprecedented levels in recent days over concerns caused a drop in prices. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries.
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this is bloomberg. haidi: thank you for that. rishaad: let's get to these pmi numbers. they have been released and it is much better than expected. ,ooking at manufacturing nonmanufacturing pmi for october. haidi: were you surprised? it is a strong number, no doubt about it. it shows commissions are gradually improving for the corporate sector. that has been a significant turnaround. it is moving in the right direction. the non-pmi is holy up nicely as well. the corporate side of things is stabilizing but it is a long way from turning the corner. rishaad: what are people talking about the outlook? is it positive? perhaps the line of least resistance is to the upside. enda: it is being views as
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positive. that is the key issue, how much it is -- but the external story remains weak for china. [indiscernible] --re's no sign of to thed, it adds stabilization narrative we have seen in china. no sign yet that they have turned a corner. the underlying structure that we know about. still plenty of challenges. haidi: there would have been enough time for the affected trickle through. wea: the general thinking is ak currency does not -- it only matters if you have
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first mover advantage. most curtains these -- that is the biggest problem for china. until the demand comes back. getting -- ct be hina won't be getting what it used to get. too early. lot of stimulus going ona s well. rishaad: thank you. six weeks ago the bank of japan taking that bold policy setback, adding curb control to its arsenal of policy measures. despite inflation falling farther away, they are expected to add stimulus litter today. -- later today. >> it is great to be here.
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it is subtle but exciting because the boj made another innovative move, first of all in january of this year when it went to a negative interest rate policy. but there was a bit of a backfiring to that because it pushed a lot of investors out into the long end of the curve. a lot of people were reaching for yield, cap -- flattening the yield curve. some concerns about financial stability as more fell into negative territory. it is expected that the yield curve framework is going to be held steady. no changes to the short end of the curve where the key rate is jgb target yield is expected to remain around zero. the question is will the boj say
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we do not know if we are going to buy ¥80 trillion in bonds, and that will open the door to flexibility. in fact, earlier on daybreak ojent we heard from an ex-b official, he says flexibility is the key word. >> boj is much more flexible on the purchase of jgb compared to before the assessment in september. i think they can be confident. bring a controlled level of the interest rate for the time being at least. kathleen: he was very clear, if says they'll will not necessarily by ¥80 trillion, do not color tapering. tapering would mean the boj would go back on stimulus and it is no intent for the boj to do that.
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haidi: the boj says they want to overshoot it. are we expecting any changes, a revision? haidi:kathleen: the boj is gettg ready to issue updated forecast for economic growth in japan and the inflation. we know the governor has said he inspects -- expects inflation to get to 2% and even overshoot by march 2018 but if we look at one of our charts, it is 3910, if you want to take a look yourself. if you look at the headline cpi, if you look at the core, both running at -0.5% year over year. making is not headway. the fundamentals are looking better, labor markets are looking better. even so, bloomberg markets saying they will lower -- he said there is revision
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possible. bloomberg intelligence saying the boj may now push that inflation date for hitting 2% after the end of 2019. also openingralia up with a decision on race. like japan, their inflation target is well below what they want. is there any stimulus expected? there are some signs that maybe inflation is starting to improve a bit as some fundamentals in australia like employment show signs of being better. there are expected to keep the key rate at 1.5%. 5.7% odds of a rate cut. no one is expecting anything to happen today. 4673, look at the components. they showurple bars, an uptick year-over-year in the
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august consumer price index. 1.3%. housing has been higher. but it is picking up again. looking toos not good. i guess people are not going to a lot of movies for some reason. but they are buying more clothing. bloomberg intelligence says the strong aussie dollar is something that does fuel rba rate cut risk in the future but maybe they will keep their policy in place just to keep the aussie dollar from picking up too much steam. we have a lot ahead of us. rishaad: we do, indeed. still ahead, -- we will be live at the air show later this hour. rishaad: financial joining us to discuss plans for asia and beyond. ♪
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a quick check of the latest business headlines. panasonic flashed his business forecast because of falling profitability for solar panels. of 2.3xpecting a profit billion dollars, but 25% lower than analysts were expecting. panasonic is struggling with a stronger yen that is reducing income earned overseas. haidi: honda is doing this in the tokyo session after it raised the four-year profit forecast due to a surge were demand for suvs and china. they the income to be almost $4 billion. its had lucid deliveries of models for -- the company says it is open to possible joint ventures. industry valves,
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competing alone is not realistic. where open to a tie up with any kind of business, even outside the auto industry, if we see any benefit fraud that. -- for honda. rishaad: cutting its profits target by 60%. it is going to be think you're at -- by 16%. in the last quarter. there you go. heading in opposite directions. haidi: financial is following tranny's customers traveling abroad by increasing its footprint outside the mainland. --haad: douglas, great to have you.
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before we talk about expansion plans, i have to ask you, is 2017 still the timeline, do we have more details about when and where and what the holdup is? we see the benefits of being a public company but we do not have any current plans in terms of timeline or venue. rishaad: is there a preference? hong kong would have a shorter timeline and others. -- than others. we do nots a said, have any current plans in terms of the ipo. we can see the benefit of being a public company, but we do not have any plans of lifting venue or timeline. those are still under evaluation. thei: let's talk about latest expansion plan in
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thailand. this is your second global partner. why thailand? we are very excited to announce the partnership this morning in thailand. thailand is a big focus for us in terms of our chinese consumers that we have that are traveling abroad. this also a very attractive market in and of itself. as you know, partnerships are essential to the way we are looking to build our business globally. , thising the partnership partnership is an attractive way to expand our business. within thailand, we see a great opportunity to serve both local our partners fabulous because they have great
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capability. we also share a similar mission with them. bringing more people into the financial services marketplace. douglas, you say this is the blueprint of how he will expand globally. what type of stakes are you taking and what kind of money are you talking about exchanging for that stake? in pursuing our partnerships around the world, we are not so much focus on how much money we are investing or what stake we have. the key for us is to find leading partners in different markets who share our same have great also capabilities within the market in terms of financial technology and in terms of knowledge of the local market. we are very excited to partner with them today because the have a great management team, great knowledge of fin tech in thailand, and great
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relationships with consumers in the marketplace there. we see a great opportunity to serve our consumers and the global lifestyle we have developed in china, we worked looking forward to build a similar capability for thai consumers. haidi: you have also talked about expanding into europe. is a huge player in china, but how does it difficult -- how do you plan to compete with apple pay overseas? expansion --global you're right, we are looking to expand globally. let me step back and explain a couple elements. we are looking to serve our consumers from china as they travel around the world. are four hundred 50 million active, unique consumers we have in the chinese mainland. every year, over 120 million of
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them travel outside china. our first goal is to serve their needs as they travel around the world. --you noted, a partnership it is part of our expansion. we're also looking to expand through partnerships like the one today that we are announcing. rishaad: douglas, thank you for that. they're not really telling us much on that ipo. a big day for the markets. plenty more ahead. ♪
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♪ this is bloomberg markets. we are minutes away from trading
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in hong kong. we have a lower session in asia so far. ahead of the elections come a huge amount -- we are taking a look at futures, indicating up. the chinese markets are fairly shielded my what is going on today. free trade up. we have a positive manufacturing number. unofficial gauge coming out in about 15 minutes. the aussie looking flat. we had an initial spike. but holding at the moment. not expected to do anything today. holding the cash rate at 1.5%. we are looking ahead to some of the action coming through. all of that getting a reaction from the markets.
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much stronger than expected. going to be talking about business in asia. are they going to be selling any of those planes. ♪
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in ♪ this is bloomberg markets asia. rishaad: just taking a look at what is happening with the opening here in hong kong with the shanghai, shenzhen. getting reaction to the chinese economy with more signs of life, strong numbers in pmi coming way instant -- coming in stronger than expected, coming and stronger than the september numbers as well. haidi: we will see how shanghai plays in this, because typically good data, you do not think you would get a lot more using and that continues to drive mainland markets lower.
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let's take a look at the shanghai markets that have opened for trading. here is david. david: yes, we have the two markets opening up, quick reminder the philippines which opens up at this time is shut because of all saints day in that market. after pmi data a pretty good turn of events, you have these four markets up above water. hang seng up 4/10 of 1%. i have a look at the movers up and down. in up on the hang seng. shanghai a little bit above water at this point. to break things down, i want to point out what is happening. the reason i'm looking at energy is you can see prices at a four-year high in china. they are not coming down on speculation that they have raised prices and are trading for a fourth time. 2.25% of 1%. weaker fixing coming down to the
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pmi. the dollar was sold fully or quickly back to levels right before the data came out. how did this actually help? what we did, we put this together with the pmi. let's go into bloomberg and have a look at the graphic. you have the pmi data and the exchange rate and in some way they are related. you have dollar-yuan and pmi going back to a three-year high. these are driven by new orders which is the biggest change in the five components of the pmi data. something to keep in mind when you look at that. trading debuts on the chinese mainland, these should be the same story. down theebut should be last time i checked. i do not have to tell you wh
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ich ones are going public and which ones are more of a rational market. again, every day since august the have seen this on the mainland. back to you. day,: all right, another another 5% debut in china. rishaad: let's get to the first word that is developing. destabilization of china's old economy appears to be taking hold with the official pmi jumping at 51.2 in october. that compares with economist median estimate of 50.3 with economic extensions stabilizing and factually prices rising for the first time since 24. the central bank may hold off to keeping the key rate to a record low for more than a year. u.s. prosecutors are going to be focusing on former ceo and cfo of pharmaceuticals as a build a case against the company. authorities are investigating a
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potential accounting fraud related to its ties to philidor, eant secretly control. charges could be filed within a week. investors will be looking out for the finer points of the boj's policy framework executed meeting wraps up in a couple of hours. all but two of 43 economists expect no additional easing and donehink the governor is with expanding stimulus. the focus is on how the boj will meet its target and inflation growth forecast. october, a record month for dealmaking with almost have a $20 of mergers and acquisitions announced globally. combine an oil and gas division with baker hughes push the total to $489 billion. that is the most for 12 years
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topping the previous record of $471 billion in april, 2007. global news, 24 hours a day, by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. haidi: thank you for that. rishaad: china set to start trading in new york later tuesday. haidi: this is a spin off of a fast food owner running kfc and pizza hut. let's go to our correspondent who has been following the story. recently, struggling a little the more, losing some of its market shares and has had to deal with a scandal and increasing local competition. consumers change their case. there looking for more healthy opportunities. they have kfc, pizza hut, sump in -- so some people are looking for other opportunities. rishaad: what could be more healthy?
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[laughter] >> it is a spinoff of a china operation under a little bit of pressure for chinese activists wanting an increased return and to serve local markets better. that means adapted to local taste and technologies that may not exist in the united states come as for example mobile payments which are big in china. lostd of research said yum market share to local players because of their willingness to react to these things and lack of knowledge of the marketplace. this will create the largest independent restaurant chain in china with more than 7000 -- handmillion cash in and will take up a yum in a new york. rishaad: what is next for them? >> taco bell in the united
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states. that will launch in china may be at the beginning of next year. they also have a couple local, more local ranted brands. do is expandt to the number of restaurants and a half. they currently have 7300 stores and they want to triple that 222,000 in the long term. take a look at the restaurants it has, which is the way you can compare to other people. five sources of people and wants to increase it to 15. if you compare that to the stores peres at 57 one million people, quite a lot. china has a lot of local brands competing. china will be able to make acquisitions and takeovers as long as it does not compete directly with the parent company.
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this will also allow john yum brands to focus its market in the united states. haidi: thank you so much for that. is hugely popular within china. i do what is your favorite within the portfolio. colonel's chicken is magic. haidi: under investigation by the department of justice for accounting fraud. valiant continues in the spotlight in the tuesday wall street session after shares dropped sharply late monday on board -- word of a possible probe that is focused on the x ceo and ask cfo. --ex-cfo. the fbi has been investigating
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for at least a year and they say the investigation has to do with an accounting fraud sent to relate to the companies hidden ties to philidor rx services. the processor to be focusing on the ceo eiko pearson and ex-cfo howard schuyler. the company released a comment saying, we do not comment on rules of investigations. a say they cannot speculate where this will go, but they also sa, the company takes these matters seriously and attends to uphold the highest standard of ethical conduct. people close to the matter says the prosecution of executives could go beyond the individuals. they say the probe is a very fluid adding among possibilities that the company could settle with the justice department and perhaps charges against individuals would be pursued later. charges against executives are fairly rare. --eron ceo's work
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convicted of from. tenet healthcare dropped extensively in trading after the company cut its profits and outlook. both were viewed as disappointing. the hospital chain reported a fourth-quarter loss. ofy missed the estimate $1.54. all right, plenty more ahead on bloomberg market asia. rishaad: we are watching for the pmi reading coming after the storm official numbers. haidi: taking a look at whether it holds up in that part of the manufacturing sector as well. this is bloomberg. ♪
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♪ a quick check at the
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latest business headlines. name to itsxecutive as the company continues to explore a possible deal with cbs. running an international network since 2011. sure red zone are pushing for viacom to be confined after a decade. they would provide interim stability as leadership. haidi: alibaba is stepping up and pushing to entertainment. forming a new media group along with a $1.5 billion fund for a new project. the alibaba digital media entertainment group will include video websites and the web gaming and music units. the company is investing billions in entertainment to generate new growth for china's economy slowing. rishaad: subleasing office space
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and london to the british government. they are hoping to cut 25% of war-torn area. britain voted to leave the european union. haidi: goldman sachs outsourcing day-to-day running of its staff. operations to mastec following regulations and escalating costs. the exchange operator will provide underlying operating for largest stock market pool. both companies have declined to comment. rishaad: what do we have, about 12 minutes, 30 minutes of trading in hong kong, shanghai, looking for more david -- data to come out. david? david: we are looking much, much better. much better shape than before the data came out. it's of a look at what is
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happening in australia. we did not bring this up. it is unique what is happening in sydney today. it sucks of a lot of volume out of the melbourne market. no big movement. this is where we have been trading for the most part. 52.80 is your level. south korea, cost index down a percentage point. as you can see, when the pmi came up, we will see if it is enough to lift us above water, it was enough to lift us above 2000. exports fell. you also had inflation actually picking up more than expected. on that note and back to the pmi data. as i'm looking through the sub benchmarks within the actual numbers, if you look at this part on input prices, that is really driving things up. it tells me there is a lot of inflation coming through. at what point does that actually show up?
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we talk about inflation a lot but this is the new data, 16.6 on the latest pmi data. have a look what is happening in japan on the nikkei 225. they become. trading sessions. as you can see, picking up nicely. i want to point out you have the boj coming out and we have also seen this collation between the japanese and the nikkei 55 breakdown, so exactly related. i will leave it there. rishaad: yes, getting straight to the breaking news, it is stronger. this is the artificial survey of manufacturing index as related to the data coming in. 51.2. when itt is a trifecta comes to the official manufacturing and the services nonmanufacturing numbers which looks at the smaller privately
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held companies in the official gauge looks at larger state on one's. it looks like, at least according to this gauge that perhaps the leg of the recovery as a little bit more momentum than a lot of analysts previously thought. taking a look at the quick reaction, not much of a reaction when it comes to the aussie dollar, holding at .09. rishaad: indeed, there is the bankable strike later with their rates, but the bank of japan expected to keep policy on a hold. it is expected to review the bond-yield and inflation targets, however. haidi: we are looking for more details on how they plan to balance these out with the yield curve control mandate. former boj officials joined us earlier on a bloomberg daybreak asia. we asked for his view on the upcoming boj me. >> i saw no movement from the boj today.
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many people expected not to change for the meeting. if anything, it has been improving, particularly the third-quarter gdp moving from now where we are probably at 1% or really about that compared to 0% for the second quarter. there is more momentum for countries in recovery for the time being. that is the reason why the boj has to think about that and they are going to make some decisions on changes on the policy today. haidi: please see some early signs of momentum growing in the economy, but if you take a look at inflation we are still dealing with seven straight quarters for prices have fallen and the central bank, one of the first to formally savable overshoot inflation, how are
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they going to do that? >> well, actually, current momentum is not really strong, but at the same time we have to look at the labor conditions, the labor market which is very tied. there are tight labor market conditions, so i think the fundamental conditions going forward would be very supportive for the boj. there is a new service commitment. i think that is pretty strong. actually, if you see differential rates across 2%, i think that the time in the bsg would be most receptive because they want to reach a point but wouldrow 2% and the boj
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ensure their monotonous opportunities. the biggest question is how the stabilization, which means how to create inflation above 2%. i think the market may not be sufficient. this could be done through policy, corporate managers and share markets, or would be me more confident spending? yvonne: you have set in the past corona has undergone a remarkable change in thinking. would be a think more sustainable policy or approach moving forward? are they going to have to push back at the 2% inflation, should they make it more flexible or drop it all together? isi think the keyword possibility, not giving up on the 2% inflation target.
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we have the timing of this situation. i think the policy for him has already been made flexible. the new framework would be much more supportive for a long-term war against inflation. as i mentioned, forces behind inflation is quite supportive. the labor market condition is really tightening and also the challenges that people have been in opposition for so many years. it may be a challenge to break with the inflation rate. the economy is recovering. are really good so there is a good chance of the next three years that the bank of japan will be seeing some opportunity for inflation. it is about timing, as i mentioned. former boj was the
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assistant governor and the current executive economists at the sensitivity speaking -- at the institute speaking. rishaad: the woman at the heart of the scandal surrounding south korea's president. ♪
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♪ back with a look at korean prosecutors detaining a close friend of the president who is at the center of an influence peddling scandal. was heldoi soon-sil after turning herself and for questioning. what is the latest we have on this pretty extraordinary scandal that has developed? >> right now we are waiting. we are waiting to see what the prosecutors will do. as you noticed, they detained
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her after nine hours of questioning. the next move would obviously be for the prosecutors to either file charges and a c kerr arrest , and the court will have to decide whether to eject the arrest request or to prove it, which at that time she would be arrested. we do not know what the prosecutors will do. what the prosecutors told the local papers that she has denied all of the allegations, but they have to detain her out of risk for flight. rishaad: yes, peter, there are some reports that she said about herself that she deserves to die. what is this all about? >> well, during this amazing mob scene when she was entering the prosecutors office yesterday, she apologized to the country for the commotion and that because of this, she deserved to die. it is not clear whether she was
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referring to the allegations or the fact that there is all of this commotion around this case. it is not clear. she never detailed and or talked about it, so again, it is unclear as to what she means when she says she deserves to die. haidi: peter, there have been calls for park's resignation but we are also hearing of shaking up other parts of the leadership. what are we expecting to happen from here? public,the weekend, the tens of thousands posted on the streets and asked for resignation. the ruling party has not gone that far. what they are asking the president to do is replace the prime minister, reshuffle the and perhaps appoint those that could be understood as a neutral appointee, basically helping to
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keep the presidency in the office until she finishes her term in 16 months. rishaad: let's have a look at some of the other stories. turkish police arresting the ditor of a major newspaper on suspicion of involvement in july's failed coup. firing 10,000 state workers over the weekend and promising to restore the death penalty for treason. the press institute says it is the end of media freedom. haidi: saudi arabia has replaced the man in charge of the financial district for the past two decades. a royal order excused him of his post and replaced them with the head of the kingdoms capital market authorities. he was appointed as state minister and will remain a member of the cabinet, the latest move to reinvent an economy that has been bashed by the low oil prices. rishaad: taking a look at where
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crude is at the moment, another $48 and up. pmi next.rters rishaad: chinese economists joins us next. ♪
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>> from our studios in new york ity, this is "charlie rose." charlie: ted koppel is here. he served as anchor and managing editor of abc's "nightline" from 1980 to 2005, 25 years. earlier this year he became a special contributor to cbs sunday morning. he's won eight george foster peabody scombaurds 42 emmys. his recent book, "lights out: a cyberattack, a nation unprepared, surviving the aftermath," is now in paperback. i'm pleased to have him at this table.

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