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tv   Bloomberg Markets Asia  Bloomberg  November 13, 2016 8:00pm-11:01pm EST

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i am rishaad salamat. i am haidi lun. this is "bloomberg markets: asia." ♪ reasons for optimism, japan's smashing expectations. >> data from china expected to show continuing industrial-strength, gain in retail sales, and investment. afterd: the kiwi swings
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powerful tremors cut the main north-south highway. what may be the most successful casino of all time. rishaad: right, just having a look at this chart. it attracts the fortunes of the 500 richest people in the world. >> we know markets for royal last week, the recovery rally, and so some segments continuing. there we have it. the two weeks of ups and downs, ending in a tumultuous u.s. election week, down $6 billion. these of the world's 500 richest people. we have the decline of $64
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billion on the result of trumpeting in the white house. rishaad: right. and kuala taipei lumpur coming online. all right, markets mixed following what wasn't the most pleasant of weeks in asia. the story comes down to japan, where you have a weak yen. followinge nikkei 225 the quake. , down 7% inng out new zealand. what you're saying is a pullback across mining stocks, especially gold producers following the drop in gold prices. wednesday last week, four trading days, gold was trading well over $100 from current
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levels. .1%, and we are tracking across southeast asia when the rest of the markets open up following the massive drop on friday, led by indonesia, the worst day for southeast asian stocks going back to august 2015. markets, have a look at the 12 month chart. it is trading above the 200 day moving average for the first time since this year. that hopefully will provide some level of support. following that indicator closely as well. the other story i want to mention is the bond market. have a look at this. changes, theu the percentage changes, and some of these assets for the past year. right in the middle, you have
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the u.s. ten-year treasury. what that means is yields are essentially back to levels of this time last year, very close now. look at that. 2.19% takes you back to january 10. a little bit further back, this is where we are this time last year, so quite a steep selloff across bond markets, and that is continuing at the moment it you look at some of these other yields across a markets like south korea and taiwan as well. we will leave it there for now. all yours. haidi: we're just getting some lines crossing the bloomberg. governor kuroda said policy will be adjusted as needed and the public needs to experience inflation above that 2% target, but suggesting you should manager at occasions when it comes to that number. i think this vast sway
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of youth has never experienced inflation at these levels. they are saying they should get that 2% target, which has been 2018, full year is when they see that likely to rise towards that 2% target at some point in that full-year. thei: continuing to watch yen, weaker after the u.s. presidential election. we monitor developments across all markets. abealso had shinzo o speaking out, saying they will continue to push for the tpp, but it looks like a texan's him on the rise after the u.s. election. rishaad: more weakness there. going onk at what is elsewhere. let's get to first word news. rosalind: donald trump has named reince priebus as chief of staff. priebus is chairman of the
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republican national committee, nomination is expected to bring trump closer to party leadership. steve bannonnamed breitbart news as chief counselor. the south korean president many questioned in office as an influence peddling scandal makes impeachment a possibility. grown sons park apologized last month, and there's growing pressure on her to quit. new zealand's dollar and its key stock index have recovered from losses after it an earthquake killed two people and caused widespread damage. the quake struck just after midnight local time, centered north of christchurch. it has been followed by hundreds of aftershocks. stores and businesses are closed
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in christchurch in wellington. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. haidi: there are growing reasons for optimism in japan after the third smashed expectations. rishaad: let's get to the numbers. miller, what was behind the surprise? it really did come out of left field. >> yes, it certainly did. net exports were a big part of the picture. we are thinking exports minus the impact of imports. we have to look at how the import picture is. energy import costs have fallen, and that helps this overall net picture for imports and exports in japan. fromsaid, we saw demand southeast asia and other regions for japanese goods. haidi: are we likely to see this
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trend continue? that is a big question. the election of donald trump has thrown mccloud over the outlook for global trade. there are concerns protectionism will rise. shinzo abe is still pushing ahead with tpp talks, but from trump's point of view that looks all but dead, a real below to japan. on top of that, there is a question about which way the yen will go. it did not go the way people expected after trump selection and analysts are still trying to get their head around of where the yen will go and what that means for japanese companies. biggest one of the problems the japanese economy has endured is domestic demand. what is that looking like at the moment given this read? any better not look today. when we looked at the numbers
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for business sndg, that was unchanged. consumer spending was up just a little bit. is stillll picture gloomy when it comes to domestic we see,n japan, and as prices falling, and that's another thing for the boj to contend with. that.d: thanks a lot for brett miller joining us from tokyo, looking at those better than expected growth numbers out of japan. economy expected to show continued stabilization wind data from october is released at the top of the 10:00 hour. tom mackenzie will break all that down. what are we expecting? goes on theas she forecaster it if you look at industrial production, that number is expected to increase 6.2% year on year for october. retail you look at sales, the numbers expected to increase 10.7 percent, in line with september.
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expected toment is increase 8.2 percent, in line with increases in september. for industrial production, we need to look at the pmi data that shows expansion and that all-important deflationary pressure at the factory gates, that has started to ease off, so we could get a positive surprise on the industrial production number. when it comes to retail sales behind the numbers, we need to look at auto sales, because there is a tax incentive that may be coming to an end at the end of this year and i could lead to people buying cars before that in's. ends.we are coming to a point where property sales and property prices are starting to ease. sales,t around retail strong demand for retail products, but that is not matched by wages. how long that can go 14 is
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certainly being questioned. those are some of the data points we are looking at, coming across in a little under one hour. also donald trump saying he will spend $1 trillion over a decade to boost america's infrastructure. i'm sure he can learn a lot from china. they have spent 10 times that amount or more. tom: that's correct. they have spent around $11 trillion in the last decade on infrastructure. in the last year alone, they spent $1.2 trillion and build something like 20,000 kilometers of high-speed rail. compare that to the railing structure in the u.s., a dismal picture there. they built 210 civilian airports. ae last time america build decent sized airport was 1995. there is a flipside to this, many pointing out that infrastructure spending has been
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zones andenterprise buildings underused, and there is the debt burden that has paid for that that will need to be paid off. university shows half of the infrastructure spending and china may have eroded economic value rather than created. a number of takeaways that president-elect donald trump can take away from the infrastructure program in china, a few lessons he will need to learn before he takes office. rishaad: thank you very much indeed for that. tom mackenzie in beijing. how a smallout casino in the pacific has become the world's most profitable gambling destination. next, dbs private bank giving its end of your outlook for asian markets. this is bloomberg. ♪
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haidi: a pretty gloomy lion
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city. way for 15er minutes, down .5% for the straight times. markets whip sawing again host trump -- post-trump. the nikkei 225 surging, strong gains for the nikkei and the topix. rishaad: that weakness coming back with better-than-expected growth numbers. let's talk about the latest business flash headlines. japan's biggest bank still struggling to make money from lending. probably fell about 20% in the last quarter. negative interest rates pressuring loaning at home, and we did have the strength of the yen hurting earnings overseas. the worst performers in japan until last week, when they
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rebounded on donald trump spectrum. shares moving to the upside in an advancing market. has shrunk to attend the event size after it returned vessels after its bankruptcy filing. korean court is set to name the preferred bidder as the company reports earnings on monday. rishaad: sources telling us sex buyers are through to the next round of bidding for smb miller. -- six buyers are through to the next round of bidding for as in the miller. asahi on the list for the assets. japanese stocks on the rise, the yen resuming that slide against the dollar.
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our next guest believes donald trump's victory may have done of some of the work for the banks. what is the thinking here as people try to get to grips with what donald trump is likely to do. an increase in infrastructure spending will help the economy and bring about a boost in terms of inflation in the u.s., and therefore we have higher rates in the u.s. as well. what that means for asia, it could mean range bound equity markets for asia on the back of a hawkish rate outlook in asia. for asian currencies, we can expect further downside, especially given the strength of the u.s. dollar. i think the dollar will strengthen against asia and
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commodity currencies on the back of hawkish rates in asia. of donaldnsequence trump's presidency for asia is the influence of the u.s. could create a political vacuum for china. haidi: we are just gettingines crossing through from the pbo c, setting the yuan at the week is fixing for september since 2009. that is playing follow the leader when it comes to tracking the strength we are seeing in the dollar, but is this likely to continue? weaknessthink that the could continue and currencies. if you look at rates going higher in the u.s. come it decreases the yield advantage,
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therefore you see outflows in emerging markets last week. of indonesia,nk india, and malaysia had to intervene. so we do think that emerging-market currencies continue to weaken on the back of donald trump's victory because of a more hawkish outlook for rates in the u.s.. with this fixing with what we have been seeing with in yen, also with the euro particular, it is a dollar strength more than anything else. >> you are right. it is a dollar strength story across the board. positivity, the positive aspects of donald trump's infrastructure plan and tax reforms, boosting inflation, boosting rates, and therefore a higher u.s. dollar.
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that is going against quite a bit of weakness coming through , emerging-market currencies as well, including safe havens like the japanese yen. we think that can continue over the short to medium term. seeing so't the risk many aspects of distortion in the markets, and a lot of it is based on uncertain policy, a government heading into transition, all these moves based on inflation expectations, is there a chance that people will get caught wrongfooted? >> you are right. especially s&p 500 markets. it's surprising that only positive aspects of donald trump's reforms, inflation could increase on the back of infrastructure spending, about $1 trillion.to
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reforms, it the tax the tune u.s. debt to of $7 trillion over the next 10 years. it's difficult to see how they will get the funding for that. are placing only in the positivity for reforms. they have not looked at the negative aspects for the s&p 500. rishaad: thank you for that. just minutes away from the start of the trading day, looking at the prospects for hong kong. pre-auction,the futures contracts indicating further drops, adding to the ones we saw on friday, 1.1% move lower there. look at the pretrade session is shaping up.
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just over 1% really. ♪ dollar index moving to the upside thereby .5%. dollar strength across the board. yen seeing some big moves. haidi: the bloomberg dollar index up 3.2% since trump stormed the white house. the deepening gulf between one of india's biggest conglomerates and its ousted chairman. we will get the details on that. this is bloomberg. ♪
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and lookingare back at the ousted chairman of india's biggest conglomerate as the feud with tata deepens. haidi: he issued a statement
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defending his record. to a balleen likened he would drama. it is an ongoing drama. deployed newe policies because of stringent corporate governance rules. he said the rules limited the involvement of tata board members. s ninea response to tata' page press release, deepening the feud, threatening to prolong the turmoil that has led to a selloff in tata companies. in the three weeks since mistry was ousted, tata group of companies has lost $10 billion of market value, underperforming india's benchmark. thestors not liking uncertainty, and there are few
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signs of a resolution anytime soon. expect a prolonged or trauma to unfold. group mistrytata has removed from the board of all its decisions. is that likely to be successful? haslinda: what we know is that tata sons held a meeting to remove mistry and his backer, an independent director. boards. on several we don't know yet whether that will be successful and what that will lead to. what we know is outside directors of one of the subsidiaries, indian hotels, issued a statement supporting mistry, so he has some report -- support within. haidi: thanks for that. latest on the earthquake in new zealand that
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killed two people and rattle the currency markets. this is bloomberg. ♪
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lun.: i am haidi this is "bloomberg markets: asia." rishaad: i am rishaad salamat. the under a minute to go to start of the session in hong kong. indicated by what is going on when it comes to the futures contract as well. haidi: you take a look at the shanghai composite -- we were talking about it last week, entering a bull market when it comes to this recovery after the rise and fall of chinese a-shares.
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it is preempting the start of another rally. rishaad: up 20%, i guess. that's what you need in order to enter a bull market. when it does come to shanghai, we have hong kong entering the fray. here is david. david: those markets are pulling back. hereffshore spot rate following the fixing, no big surprise, week is fixing since 2009, dollar strength, not just the renminbi, the peso, the ringgit, the rupiah. tighteningsee conditions in the u.s.? we are still far from that at the moment. that being said, there you go, offshore renminbi. the opening levels here for the ,re-markets, three indices
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h-shares, hang seng, shanghai deposits. below 3200 four that market. hong kong, we are watching for positive reaction following the gdp numbers which beat expectations on friday. at the moment, risk off the table. those things are being set aside for the moment. change coming, a for the composition of the index. in,taken out, one put oilfield services being removed from the h-shares index in and china railways construction, the other one. there we go. that will be added to the index. we are down on a down day across markets. here we go. everything else is red with the andption of new zealand
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japan given the weakness in the japanese currency. new zealand is feeling the after affects from that earthquake. now, let me wrap things up with a look at the trading debut in china. there we go. that's nice, isn't it? 43%, that should be a 100% batting average. let's leave it there. all yours. rishaad: thanks, david. the market open here in hong kong and shanghai. south new zealand's island hit by powerful earthquakes following an initial 7.5 magnitude tremor that killed two people and cut into the main transport route, state highway one. let's get over to our wellington bureau chief.
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what is the latest and the situation now? well, we have not had an increase in the death toll thankfully. damage reports coming in from around the country, some very big aftershocks, the most recent 16.3, rocking us here in wellington. some areas cut off by landslides onto roads, and the wellington bd closed, parts of the cities are cordoned off as inspectors inspect buildings. markets are open, strangely enough, but let's get a sense of what it was like. what was this quake like? >> it shook us awake just after midnight and just kept getting worse and worse. you get used to the odd earthquake in new zealand. it sits on the ring of fire,
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some not unusual to see it shake, but this one got progressively worse and then really kicked in and shook our house violently. we are in an old wooden two-story house, and it was moving a lot. we jumped up to grab our children, and it was hard to stand. there were things falling off dressers and so on. we rush to the kids downstairs, and our eight year old daughter was quite distressed. does this compare to the 2011 christchurch earthquake? that wasfference is only a magnitude 6.3. thatone was 7.5, but christchurch quake was centered right underneath the city and was very shallow, and that made a big difference. this quake bigger, but thankfully seems to have been relatively unpopulated
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area, so it has not cause the same type of damage as the christchurch quake in 2011. haidi: thank you for that for the latest on the new zealand earthquake. rishaad: let's get first word news now. japan's economy expanded more than forecast in the third quarter with a rebound in exports. gdp grew annual lies 2.2%. justte consumption grew .1%, and business spending was unchanged. we are expecting more signs of expansion when china releases economic indicators for october. economists we surveyed said factory output rose 6.2%. asset sales and fixed investment are expected to hold gains as well. the reports are due out at 10:00
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a.m. in beijing. options traders are sensing a bargain in tencent, the cost of bullish contracts on asia's biggest internet company is near the highest level since july last year. fallen 8% amidst a selloff in tech following donald trump's win. it reports on wednesday, and profits so far this year have topped estimates. i ran as pumping more oil at a faster rate even as saudi arabia calls on opec members to agree on limiting production. output at three new fields close to the iragi border rose to 250,000 barrels per day and october, close to four times the by mug 2013. opec will meet to discuss the output cap. this is bloomberg. ♪ global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. haidi: the world's most
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successful casino ever may be located in a remote american territory run by none other than a former protége of president elect donald trump. there are increasing bets on the island of saipan. we went to find the story. saipanamerican island of is a speck in the pacific with sandy beaches, world war ii relics, and the most successful casino and all of the asia-pacific, if not the world, all from temporary tables at the end of a duty-free stripmall. across the street, they are building a more permanent $550 million casino resort. >> by far, it will be the most luxurious hotel in saipan. from most mainland
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cities, saipan is a new choice for chinese highrollers wary of aging's corruption crackdown. >> as the vip story gets weaker pop upau, it will somewhere else, and that somewhere else in this case is saipan. >> eye-popping to say the least. revenue from the makeshift casino with 16 the ip tables already generates a per table daily revenue of $170,000, eight the macau casinos. vip bets totaled $13.5 billion in the first half of the year. industry veterans consider how that is even possible. they see a cautionary tale in also onsty casino american soil that close last year after u.s. authorities find it for violations of anti-money-laundering rules. sources say the same u.s. treasury unit is looking into the activities of him. pacific.
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ceo mark brown said he was unaware of any investigation but said imperial pacific is transparent. i heard every question you have in your mind, all my guys, my friends in macau, say this is bull. it can't be real. he says they are real bets. we don't want to do anything to break the law. brown declined to appear on camera. brown has corralled some heavy hitters on the board and advisor stretching straight to washington, d.c., including a former cia director, former fbi director, and the former heads of the democratic and republican parties. not to mention, brown learned the gaming business from u.s. president-elect donald trump when brown ran donald trump's casinos in atlantic city. thede pan, the head of local gaming commission says watchdogs are in place. >> this is america. >> local house minority leader is not convinced. he voted against the casino bill
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that he says was hurried into law. it granted a single forty-year gaming monopoly to imperial pacific. >> very grave concern. people getting the bad side of this whole deal. the can guarantee you that commissioners that sit on this commission are independent. we do not collude with licensing. i would have to ask you what types of drugs you are using to come up with that kind of conjecture. saipanl proponents say badly needs the fees and gaming taxes each year, including a replenishment of the island's pension fund that has run dry. brown says the island is broke. the the former head of retirees association says from a social perspective that the casino is not worth the wager. >> gambling is just taking money from a and putting it into be.
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it is not a way to make money. >> on a scale of one to 10, 10 being good, i think it is one. >> bad deal? >> bad deal. >> it will deal is firsthand early next year. right, just getting to these headlines coming through from the prime minister of japan. haidi: he is speaking in parliament and recalling a phone call he had with president-elect trump, saying it was conducted in a relaxed atmosphere, but wanting to talk more about the thinking on free trade, but it is to do with tpp. he is recognizing they are in a difficult situation. rishaad: tpp will be finished if japan does not show its resolve when it comes to that. barack obama still doing his utmost to get tpp past and get it into effect. that lame-duck session of
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congress starting this week, but a lot of sources saying there will be resistance to putting that up for debate in the weeks ahead. rishaad: cause for optimism, rebounding exports, japan posts better numbers. that is next. ♪
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when: a web saw situation it comes to markets and a post-trump election world continues. let's check in with david. a quick snapshot of the markets, everything but japan when it comes to the equity markets on the way down. hong kong leading those declines, 1.4%. numbers doing little to lift
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sentiment. everything but japan, i guess. dollar-yen, one 07.40, close to session lows. a lot of this comes down to the strong dollar. the dollar gaining against every single currency in asia with the exception of a few, the ringgit on the front foot of little bit. i think what is worth noting about today is when you look at what happened thursday, friday, it is the same story where you had a drop in equity markets, emerging-market currencies on the back foot, as were sovereign bond markets. one thing consistent so far is commodity seem to be playing along after the surge last week. the price of copper for example. towere really pushing
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extreme levels, so were seeing a drop across currency markets right now. , the take a step back change in day, i will shift this to trump elected. as you can see, equities are weaker.wn, the yen it is interesting certainly how things have changed since then. guys. right, thanks for that. japan's economy growing more than expected in the third quarter on the back of exports that offset consumer spending. shaad: let's bring in nicolas smith. he joins us now from tokyo. this is quite something this number, way ahead of what people had been calculating.
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where did it all go right for japan this time? economists are completely mystified. we can see profits have been coming in 5% ahead of consensus. think of how good that is to say , yen-dollarquarter 107.9. and yet, they were able to do this well, so pretax profits of 5.3% against the previous quarter, against that kind of forex headwinds. we always knew japanese companies are black belts accounting paperclips. listen to the policymakers be can they talk about animal spirits and the deflationary impact of that mindset. saying this through
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generation should experience inflation above 2%. the deflator negative for the first time since 2013. does it suggest we are turning a corner or ascetic currency effect we are seeing? soak essentially what you have in the economy is you have ie labor market that is watering leak tight, and the other parts of the outlook have the oldt, so back in days, price used to be a function of supply and demand, but we have also had this massive headwind, how be at a strengthening yen. yen is trading in lockstep with , so watching that u.s. 10 year treasury yield, you can see minute to minute that the yen has been moving with that. obviously you can see what is going on with the trump are addingis you
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fire to the bond market with a 550 billion dollar at the structure program, and on the , whichide, cutting taxes is suggestive would cost around $7.9 trillion over eight decade. so not surprisingly, yields shooting up and weakening the yen against the dollar. that for japan is quite a positive. rishaad: absolutely. that's one of the reasons why we saw the export picture help the japanese economy in the third quarter. gets or isod as it this current weakness, will it improve the earnings picture for japanese companies for the present quarter? no, where we are at the moment is as bad as it gets. for a lot of sectors, the price book multiple is within a whisker of an all-time low, so the potential is pretty good. you have three main sources of , ¥6ng, the pension system
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trillion, than the boj buying another ¥6 trillion, then you have share buybacks because companies are awash with cass, so another ¥6 trillion this year. buying used to be by the foreigners and they determine the market, and the most they bought was 2013, when they bought ¥15 trillion. the domestic buying ought to outweigh it, but foreigners are desperately short japan and want to get themselves back to neutral because japan is a good play on global trade and has the yen as a kicker. valuations are succulent. from awe have just heard be saying that obama is still trying to push tpp forward, but rising concerns over protectionism. we heard from credible sources in the u.s. that it won't be part of the lame-duck session.
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it will be up to donald trump to consider. what does that mean specifically for some of these companies that were seen to get upside from that, the automakers for example? snore app has been a minute for a long time, so basically the markets have written it off. that continues to be the case. the only question is whether the u.s. is going to be part of other treaties out there. image of therror tpp. the difference between the two treaties is that one has growing countries and tpp has countries which have been shrinking as a percentage of global gdp, so the as arisks being displaced hemisphere hegemon, being pushed
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out of the reason. but for japan, which i don't think we should be tearing our hair out, which is lucky because i don't have a lot. rishaad: we have to leave it there. haidi: pleasure to have you on with us. he said the evaluations in japan were succulent. up next, influence peddling scandal over south korea's leader. we will have the latest. that is next. ♪
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korean: right, south president may become the first question in office by prosecutors. haidi: calls to resign over this influence peddling scandal. we have been on this story since the beginning.
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we saw these protests reach a fever pitch over the weekend. -- showing nowing signs of slowing down. each weekend they have been getting bigger and better. peoplea quarter million police estimated, protesters and organizers estimated one million people, mostly peaceful. there are more protests scheduled in the coming weeks as well, so this is not letting down anytime in. rishaad: her approval rating is something like 5%. how likely will she respond to these protests? she gave a statement last night after the protests where she said basically she will continue with her presidential duties, so she has given no sign she will step down. a lot of people seem to think she has an incentive to stay on, , shese once she resigns
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gives up her community and puts her at risk of prosecution. haidi: the latest line to come through is she is set to meet with the main opposition party. that has been confirmed either presidential office. what are the chances of impeachment? you need two thirds of parliament to support that, so the opposition does not have enough to pull that off. they want to drag this out and milk it for political gains, but going to in peach met might upset her support phase in the southeast, which they need for the next election, so they are looking ahead and making a political calculation, doing get more support by going after her or avoid impeachment and does that help us more in the next election? haidi: the opposition is not in the strongest of positions to take advantage of the situation. thank you very much. rishaad: minutes away from the latest data out of china. we are looking to see what is
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happening with manufacturing, retail sales numbers, expecting a year on year increase, industrial production expected to be up as well. ♪
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haidi: it is almost 10:00 a.m. in hong kong. i am haidi lun. rishaad: i am rishaad salamat. this is "bloomberg markets: asia." ♪ haidi: growing reasons for optimism. japan smashes expectations. rishaad: china fixing the yuan at the weakest in seven years as we await the latest manufacturing and sales data. haidi: pressure mounts on south
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korea's leader on access and influence. aftershockserful rattling new zealand come the latest live from wellington. right, just getting into these headlines coming through concerning industrial production, weaker sales, retail sales slightly less than expected, 10%. the estimate was 10.7%. let's get straight to tom mackenzie in beijing. yes, that is the surprise number from this data, retail sales for october up 10% versus 10.7% estimated, the same number in september. the health of the chinese consumer increasing the important as they shoulder more economic burden here. contrasts with that huge shopping extravaganza, singles day, oma's $18 billion worth of sales, but the number of missing or cast.
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we had warnings from bloomberg intelligence saying that there is a growing gap between the amount being spent on retail and the increasing wages here, and that has a short lifeline, particularly as property prices edge up and the credit squeeze continues. industrial production came in at 6.1% for the month of october , below the forecast of 6.2%. that industrial production number follows the pmi data showing continued expansion and an easing of deflationary crisis at the factory gate. data point is fixed asset investment, coming in at october, anuary to increase of 8.3 percent marginal he up on forecasts of 8.2%, and we will need to dig into the numbers, but we have seen the
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provincial government stepping in to take the place of private investment, so interesting to see how much private fixed asset investment that will be first of the big unknown overshadowing this china data is the donald trump effect, and if he pushes ahead with his policies of introducing terrorists, maybe up to 45% on chinese exports, then that throws into doubt where we go from here. will china state owned enterprises reform the shelved if we get into a trade war between the u.s. and china? that is the big question over all of this and the surprise number from the data points so , suggestingnumbers an element of weakness for the chinese consumer, possibly there confidence off slightly in a slower growth environment. haidi: we will see reactions from consumer stocks for sure, but let's get the reaction.
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juliette: let's look at the aussie dollar. it has jumped higher from the lows of the day following that china, particularly showing signs we are seeing stabilization continuing in china's economy, the aussie dollar flat there now. , fallingching the yuan for a third consecutive session, the weakest since september 2009, down .2% at the moment. hasoffshore renminbi declined for the first time in three days following that fix, -- down by point .1%. the market is now in positive territory, up by .2%, so some buying coming through. we will be likely to see upside in retail stocks. we continue to watch the chinese
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equity market as this filters through. the aussie market still being sold off, down by .9%, gold stocks continuing to be a point of weakness for the strain markets. the nikkei is the standout, a dollar strength, yen weakness, the yen pushing past 107 to the dollar, incredible strength from japanese equities, up by 1.4% on the nikkei in the morning session. also, upside coming through in new zealand today, up by .5%. elsewhere, still a sign of weakness coming through in emerging markets, a lot of what a dollar trump presidency will mean for exports in the emerging markets space, but it is encouraging to see the shanghai market has turned positive falling that china data. right, let's find out
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what else is going on. let's head over to city and joined paul allen. paul: donald trump has named reince priebus as his chief of staff. chairman of the rnc and his nomination is expected to bring donald trump closer to the party leadership. donald trump named his campaign ceo stephen bannon from the right-wing website breitbart news as his chief strategist and senior counselor. may beorean president the country's first leader to be questioned in office as an influence peddling scandal makes impeachment a possibility. investigation includes aids and executives of leading companies. protests have grown since park apologized and there is growing pressure on her to quit. stockaland's dollar and index of recovered after a
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powerful earthquake killed two people and caused widespread damage. magnitude 7.5 quake struck just after midnight local time in northern christchurch. it has been followed by hundreds of aftershocks. businesses are closed in christchurch and wellington. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. haidi: thanks for that. growing reasons for optimism in japan, third-quarter gdp smashing expectations. haidi: let's get to brett miller. rishaad: what was behind the surprise? it was quite a surprise. >> yes, it certainly was. the net export picture was one of the big contributors. when we look at exports minus imports, net impact was 0.5% increase for gdp, and a lot of that has to do with the lower said,for energy, but that
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we do see external demand helping japan. we saw the man from southeast --a, some strengthen strength in exports. see thise we likely to continue? talking about rising protectionism and the u.s., tpp dead in the water, is this going to weigh on the outlook for japan going forward? exports,hen we look at there is a question hanging over donald trumps protectionism, how far he goes, we don't know if this stage. in any case, it looks like the tpp is in a lot of trouble. couldard to see how that move ford given what the president-elect has set about that. we also have the question of the
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japanese yen. it's not moving the way people expected, but we are still waiting to see which way it will ultimately go if protectionism comes. what is the picture like for domestic demand. this is one of the bugbears, people not spending enough. need to see a lot more there. that is an area where abe has to work harder. business investment in private consumption were both unchanged in these gdp figures, so that a lot of happy signs for the economy. we also have the question of prices in japan, cpi dropping for seven straight month, so still a lot of issues when it comes to domestic demand. haidi: thank you for that. still ahead -- rishaad: how a little-known casino on the island of saipan
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is attracting big money. a special report later on. haidi: the selloff and emerging guest says our next it will continue into 2017. all of that and more, next. this is bloomberg. ♪
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rishaad: you are back with "bloomberg markets: asia". toyo tire plunging, the tire maker blaming the strength of the yen and worsening market conditions. 18 employees detained in china has been released. the employee, a chinese national, was released on bail.
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aree all stray nationals among the remaining 17 staff still being detained for suspected involvement in gambling crimes. on overseasocusing casino operators that have operations in china. around six buyers through the next round for sab miller's assets. açai e-group, chinese resources, and bain capital have made the cut. the assets are invited between $5.5 billion and $16. and $6 billion. emerging asian currencies will continue to weaken into 2017.
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if you want to go traveling in southeast asia, it is best to wait? >> hold that thought. so far, it looks like tax cuts, fiscal stimulus and the like will result in a stronger dollar and cause emerging-market currencies to weaken. even dollar-yen, we have revised looking towards 115 by the end of this year and 115 next year. haidi: where does this leave the fed? instead, we have the trump tantrum in asia. the fed will definitely be mindful of what is happening in let's notarkets, but
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forget the main focus is on the u.s. economy. unemployment rate at four employment and inflation starting to head up towards physical spending in the u.s. will see inflation hitting quicker than the emerging, which means there is not much excuse for the fed not to tighten, so we are looking for a december move, but the big surprise could be how much more they might move next year in 2017. i think the market is not fully prepared for that yet, and in our view, that is what will trigger further dollar strength and in turn that will put further pressure on asian currencies. which ones in particular will feel it more? has been under pressure, so what happens next, and which ones are the weakest?
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liquid andhe more more highly tradable currencies, particularly those highly dependent on trade will be hit worse, so in my view it will be the singapore dollar and the korean won. in my view, the indonesian will bend indian rupee more insulated. we did see volatility in the over 2017, iy, but expect those two high-yielding currencies to weather the storm better given that fundamentals have improved in the last three an singaporeanon dollar are the two that will have further to run. have been talking about how inflation expectations in the u.s. have distorted global markets. it has given summer's fight for
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yen-dollar, but do you think as more certainty comes to light about the transition, donald trump's prophecies, we will see a reversal and the yen come under pressure again? >> i think what we will be a continual reversal of the carry trade that has benefited asian currencies over the last few years. seen a tremendous amount of capital inflows heading into asia. a lot of that is going to start to unwind. those countries that have benefited the most from large capital inflows will be the most susceptible when the unwinding starts to occur. this is where we continue to be bearish on korea. for the yen, a slightly different case. we will have u.s. dollar and higher u.s. yields which will pressure the yen, and on top of that with the rising commodity prices, that's going to see
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japan's current account surplus narrow and will start to work against the yen. hard to it has been predict what the yen will do. been so counterintuitive, so the reasons you give for further weakness could be the ones that manifest themselves in yen strength. >> certainly right, the market has been unpredictable, particularly for the yen, but in my view, we have seen lots of opportunities for the dollar-yen to break the 100 level. it has failed several times and pretty big reversal. technically, we are going to be in for quite a large reversal in dollar-yen, which is why we are calling 110 for the end of this
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year and a sustained move towards 115 next year. an ironic development and the currency markets is what the stronger dollar is doing to the yuan. i doubt donald trump sees the humor given that he wants to label china as a currency manipulator, but this is a dollar story. what can they do? >> that is exactly like. if you look at the renminbi basket, it is stable. within aen trading narrow range since about august. the entire move in yuan versus the dollar has been down to pure dollar strength. i think that will continue. several senior officials from china in the last week or so coming out and saying economic fundamentals are still supportive of the renminbi and
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stability against the basket. that is our view as well as the basket will probably remain stable, but with the dollar gaining strength, there is no stopping the yuan from weakening further. the big uncertainty is whether president-elect trump will make good on his word to label china a currency manipulator on day one. that is something we will wait to see when he takes office on january 20 next year. rishaad: thank you very much. up i: coming set to find out the preferred bidder for its asia operations. haidi: earnings due out today from the company. this is bloomberg. ♪
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haidi: welcome back. you are watching "bloomberg markets: asia". they ousted chairman of india's biggest conglomerate has denied allegations of mismanagement. issued a statement defending his record, saying he deployed new responsibilities that all of that possibly's -- policies. >> the company drifting under his management. rishaad: india's biggest producer trickling in, cost-cutting measures. to $65 million, far ahead of vestments. the company says it plans to raise as much as $750 million and has set up a committee to decide on the type of offering. share price, there we go, more than doubling, the best performer on the benchmark nifty .
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traders sensing a bargain in tencent. than 8%has fallen more from its september hi i made a selloff in tech stocks behind donald trump's win. tencent's track record may prove them right. and reports on wednesday, and profits have beaten estimate so far this year. --haad: let's look at some one company that has not been beating estimates, hanjin shipping, the same day a court says it may select the preferred bidder for its u.s. operations. haidi: let's get the details on this story. great to have you. is that likely the court will make an announcement later today? is expected tort make the announcement on the preferred bidder this afternoon. we do not know exactly what time, but it will be announcing between hyundai merchant and
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korean line, who will be the winner to take the u.s. assets. the market is predicting that hyundai merchant is more likely to win, considering the korean thatnment has been saying it wants hyundai merchant to become the national flag carrier and be responsible for the country's exports, so we are all waiting for the final announcement on that asset sale. we see from this earnings release of that later on? expecting at positive bun of numbers come out from earnings. went into court receivership as they were getting into the height of the peak season for shipping companies in late august, so that you a sickly that they -- so thaton all the
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meant basically that they missed out on the peak in the shipping industry. ofare not expecting a lot good numbers to come out. hyundai merchant will have to wait to see what those numbers will be, but i don't think both of them will be very good numbers that we can expect. we are really getting indications of how big of a toll this has taken on the fleet. yes, the fleet has basically been shrunk into a 10th of what it was just does it was getting into court receivership. the main issue is that a lot of vessels they had chartered have now gone back to ship owners at the advice of the court because if they don't return it, it means more costs, and they can afford to increase more costs than they have right now. ownedf the ships they had were part of a ship financing structure, and banks that had
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participated in that financing are now taking those ships act and selling it in the markets, so now hanjin is left with 12 at the moment. that number could actually shrink a bit more as time goes by, so we can just say that probably this is going to be the end, the start of the end for arein considering they winding down their european business and have notified their crew of 700 that they will be losing their jobs. .aidi: the beginning of the end let's take a quick look at how markets are faring at the start of this training week in the asia-pacific. lagging, h-shares dragging down the index to a three-month low. right, let's go to what we have coming up on the
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program. ,ooking at that japanese close also a deepening dispute in india surrounding the tata group. companystry denies the under his watch was simply drifting. details are on the way. ♪
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>> it is 10:29 a.m. in hong kong , i am paul allen with the first word headlines. stabilized last month following new measures to calm the property market. industrial production rose six .1% in october. retail sales climbed 10%, down slightly from 10.7%, while fixed asset investment increased 8.3% in the first 10 months of the year. that the boc said monday's fix was the weakest since september 2009, 6.8291 is more than 6.5% lower than a year ago.
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a measure of expected yuan volatility has jumped to the highest in three months with donald trump's protection is stance prompting china to allow steeper declines. can to a seven-year low. japan's economy expanded with a rebound in exports compensating for weak spending. 2.2%,ew an annualized private consumption grew just .1%, and business spending was unchanged. from a deflator drop .1% year earlier, its first fall since 2013. sources have told bloomberg that hong kong stock markets regulator is preparing to authorize leverage on exchange traded funds tracking the biggest equity indexes. the securities and futures commission is conducting a review and may approve the etf's for 2017, starting with the hang seng index and the hang seng china enterprises index.
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global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. haidi: this is bloomberg markets asia. i am haidi lun. rishaad: the latest market action, japan heading for a lunch break, strong growth figures and gains their, surprising market participants, underpinning the gains for the japanese equity market this morning. let's find out more. juliette: yes, the nikkei going on that break up 1.5%, but the regional index excluding japan, very different picture, down for a fourth consecutive session, so continuing to fall since president-elect donald trump has come -- the announcement of president-elect trump. we are seeing that regional index off 1.1 percent, a lot of concern about what his presidency will mean in terms of emerging-market exports, selling
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right across the sectors, financials down 1.4%, basic materials down 1.2%, a different picture when you look at the overall map. we have seen strong movement from the nikkei today in part thanks to the stronger-than-expected gdp weakeningd also that yen. elsewhere, china looking quite good since the data was released half an hour ago, particularly positive movement in some of those retail stocks, retail sales up by 10% year on year. you are seeing a lot of companies have that 10% daily limit in china as well. hong kong is a different story, down 1.5%, not one stock in the black today in early trade, so tencent continuing to plummet, down 11% from its high. properties also leading declines in the property space since hong kong announced that increase in itsmp duty, and also re
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coming under pressure as well. the new zealand dollar also coming back as well, in late trade, up by .5%. oil continuing to hold near these levels we saw on friday, ,he lowest close in seven weeks this as iran boosted output. u.s. exporters raising the rig count as well. just checking on the aussie dollar since the china data was released, a bit of a comeback following that data showing china's economy is stabilizing. the aussie dollar up by .1%. it looks like china's economy held its ground last month with the introduction of further measures to cool the property market.
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weaker thanraction expected, industrial production rising more than 6%. it doesn't change the overall narrative much. the takeaway was the dip in retail sales, a possible source of concern. it has been a trivet it a drop in car sales. , the chinese officials are counting on rebalancing growth, so we see consumption weekend ahead. that would be a source of caution. haidi: did the currency affect play out? seeingre not really anything there just yet. we know exports are week. that for china --
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it would have weaken significantly further from here, so we are not seeing any impact yet. impact on domestic demand is a bit of a longer-term story, capital outflows, but also retail sales. on that point, sentiment is still fragile on the currency, and perhaps more fragile considering the u.s. presidential elections and what it will mean for the chinese economy and the chinese exchange rate. rishaad: thank you very much indeed for that. new zealand's south island has been hit by a string of powerful earthquakes following that 7.5 magnitude tremor that killed two people. it cut off the main transport route, state highway one. what is the situation at the moment, matthew? at this stage, the quake does
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not look to have caused enough damage to infrastructure to alter the economic outlook, so we have not seen investors reprice the outlook for interest rates. thisollar did drop morning, but has since stabilized and the stock market rose mildly. the damage reports are still coming in, and the longer-term consequences, despite way of example, one of the hardest hit areas is the coastal town of kaikoura, a popular tourist definition, destination. you just went through it, what was the quake like? >> it was frightening. it shook us out of had just after midnight. is a place where you get the odd earthquake, but it
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kept getting worse and worse. our house shook very violently to the point where we could not was a cased, so it of rushing the kids downstairs and trying to calm them down. it was very scary. how does this compare with the 2011 christchurch quake. that took 185 lives. at thiswell i think stage we can say it is not as bad by any stretch as that quake and christchurch in 2011. the difference being that that quake, although of a smaller magnitude of 6.3 compared to 7.5 this time, that quake was centered directly under christchurch, very shallow, and caused a lot more damage and you had that horrific loss of life back then. thank you for that. the latest on that new zealand
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earthquake. chairman of ousted india's biggest conglomerate has denied allegations of mismanagement as his few deepens. haidi: cyrus mistry issued a statement defending his record. bollywood drama, what did he have to say? >> claim and counterclaim, mistry defending himself, deploying new policies. he said the new rules limited the involvement of tata sons board members. he was responding to a nine page media release where he claimed was having unisphere do away with the new policies. we know that it is threatening to prolong the turmoil that has led to a selloff in tata's listed companies. that ising up how
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doing. group of companies have lost more than $10 billion in market value, lagging behind india's benchmark. , as not looking pretty legendary dynasty now caught in a public spat. rishaad: tata is trying to from the port of so many of its units. is it likely to be successful? sons held a meeting to remove mistry, also seeking to remove his backer. iend, seen as a good fr and says it's support for mistry is crucial. on three boards. we don't know how this will pan out. what we know is that outside
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directors at one of these subsidiaries, indian hotels, issued a statement supporting mistry after he was ousted, so mistry has some support and that is making the situation complicated for tata sons. the question is what happens if they fail mistry to oust -- to oust mistry from the board. haidi: coming up nasca -- next -- rishaad: whether the south korean president can hold on. this is bloomberg. ♪
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rishaad: a quick check of the latest business flash headlines. china is highly concerned about what it calls the european union trade protectionism in iron and steel. it hopes the block will follow wto rules and impose provisional
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six-month anti-dumping duties on impo chinese seamless pipes. an committee began investigation into three categories of chinese steel products. indians have returned $30 billion in high denomination notes in less than four days after the government's surprise decision to ban them to fight corruption. state bank of india lohan took more than $7 billion in cash deposits of customers handed over the now illegal note. atms have been modified to handle the new bills. rishaad: japan's biggest banks are still struggling to make money from lending. to banks report later, and profit fell 20% in the last quarter. negative interest rates are pressuring loaning at home and the strength of the yen hurting earnings overseas. thanks rebounded -- banks
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rebounded thanks to donald trump's victory. moving to the upside for lunch frank. fleet has shrunk after it returned most of its chartered vessels. all but three of the remaining 14 ships are either stranded or seized over unpaid bills. the court overseeing the receivership is set to name a preferred bidder for the u.s. business of the company reports earnings later on monday. rishaad: the korean president may become the country's first leader to be questioned in office by prosecutors. it comes amid growing calls for her to resign over this influence peddling scandal. protests, how far will they go? there are already more protests planned for the coming
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weeks, including saturday, and the will be another one within two weeks of saturday on the following saturday, which should be organizers expect to be huge. i would not be surprised to see rallies on the scale we saw this past weekend given the public anger, and the fact that part park hasated -- indicated she will stay on, which will feel public anger, and if the public is frustrated and the frustration gets beyond control, i think there is the possibility that these protests could turn violent also. the point is how is she likely to respond after these how low heren ratings are at the moment as well? it is clearly true that her approval rating is very low. is 5% according to gallup
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korea, the lowest for any south korean president in recent decades, but she has already indicated that she will stay on. she said over the weekend after the rally that she would fulfill her responsibility as president, which can only mean one thing, that she will be an office. if you think about it clearly, it is obvious that she would want to stay in office because that makes it easier for her to deal with prosecution. s -- she is in a better position to deal with the prosecution if she is in office. haidi: we are hearing calls for impeachment, but realistically, what are the chances that she will be in peach? the chance is growing for sure, but you have to be wary of impeachmentt an
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motion in parliament, there is a great possibility that the constitutional court may reject it. history of rejecting similar motions in the past, in to4 as well, and you have have two thirds of parliamentary support to get such a motion which is parliament, unlikely because the opposition does not have that many votes in parliament. lastly, conservative voters who turned on park over the scandal may not like the fact that there would be an election within 60 days. they don't want to see an opposition figure being elected, so they may not like that idea. the talk of impeachment, thank you so much for that. rishaad: right, this is coming up. >> you would be hard-pressed to guess where the next wave of chinese can see no money is going. saipan,the island of and we will explore whether the
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islands high-stakes gamble will payoff or bring a host of new problems. ♪
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haidi: i am haidi lun this is "bloomberg markets: asia." the most successful casino may be in a remote american territory. chinese high rollers betting on the pacific island of
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saipan, with a numbers have attracted the attention of u.s. officials. the american island of saipan is remote, with sandy beaches, world war ii relics, and the and allcessful casino of the asia-pacific, if not the world, all from temporary tables at the end of a duty-free stripmall. across the street, hong kong listed imperial pacific is building a more permanent $550 million casino resort. >> by far, it will be the most luxuries hotel for sure. most mainlandfrom cities, saipan is a new choice for chinese high rollers, perhaps wary of aging's corruption crackdown. >> as the vips story gets weaker in macau, it will pop up somewhere else, and that somewhere else in this case is i can. >> eye-popping to say the least.
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generating aavos reported table daily revenue of about $170,000. that is a times that of the grandest macau casinos. the ip best total $13.5 billion in the first half of the year. industry veterans question how that is possible. tale anda cautionary the casinos of the neighboring isldst year after us-led authorities find it for violating anti-money-laundering rules. of the tell bloomberg same treasury unit is looking into imperial pacific. ceo mark brown said he is unaware of any investigation, but says imperial pacific is transparent. heard every question you have in your mind, brown says, all my friends in macau say this is all, it can't be real -- is
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bull. this can't be real. brown declined to be interviewed on camera. brown learned the gaming business from u.s. president-elect donald trump, when brown brand trumps casinos in atlantic city. , watchdogs are in place. >> this is america. we track the money 1000%. a house minority leader is not convinced. he voted against the casino bill that he says was hurried into law. it granted a 40 year gaming monopoly to imperial pacific. >> very grave concerns. getting theeople
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bad side of this whole deal. >> i can guarantee you the commissioners are independent. are not in cahoots with licensing. ask you whatto kind of drugs you are using to come up with that kind of conjecture. >> local proponents say saipan the fees and gaming taxes each year that includes a replenishment of the island's pension fund that has run dry. brown says the island is broke. even the former head of the retirees association says from a social perspective that the casino is not worth the wager. >> gambling is just taking money from a and giving it to b. it is not a way to make money. on a scale of one to 10, 10 being good, i think it is one. >> bad deal? >> bad deal. >> it will deal is firsthand
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early next year. story,for more on this how are they justifying these numbers? >> they are eye-popping. in september, they are reporting $3.9 billion and that's, so -- in bets. if you have 100 vips coming in, $3.9 billion in bets, that means they are wagering about $39 million on average each. that is staggering. that revenue per table i mentioned, that is eight times the average in macau, mark brown the ceo says macau has many more tables, so amateurs asian is stretched out and could be understandable. the big thing to it is that $3.5
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billion -- $3.9 billion of the money that is coming in, and it has raised the eyebrows of dust rishaad: is it worth doing? is right in the middle of the pacific ocean. >> it is more than five hours from mainland cities. it is u.s. law. in their ownging vips, there are no junk it operating's approved yet aside from a small operation to japan and korea. the date macau junket operators are not coming in. they are bringing in their own vips. they know their histories, bank accounts, this is their justification as to why this makes sense. you spent time there. how do the locals feel about it? they just showed up to pay their bill. a number of people said my bill is paid for the next three months.
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they areot saying buying opinions, but they are injecting fees and taxes into say thend, but others social costs could be quite damaging because they will build more casinos. haidi: thank you so much for that. fascinating package. rishaad: andy david looking at the big stories up next. china's stabilizing economy holding ground despite all those property curbs we saw. industrial production growth, retail sales, fixed asset investment, and the latest all good but is that news moving ahead with president-elect donald trump? ♪
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>> at 11:00 in hong kong, 2:00 p.m. in sydney. >> welborn -- welcome to bloomberg markets asia. >> china's economy despite health ground with retails and investment all near as dust near estimates. >> there are growing reasons for optimism in japan.
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gdp smashed expectations in the third quarter. >> the pacific island is home to possibly the most successful casino of all time. and ardently, the casino that matters to markets right now. we are selling this seeing a selloff in asian equities. may be taking the chips off the table again. it is in emerging markets across the board. when you look at what happened after the china data came up, yes, near estimates, but that was not the latest reason. have a look at what is happening across markets right now. equities, currencies, commodities, bonds, basically on the way down. it is the same suspects as friday. is feeling the
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pinch at the moment, following its worst day in 15 months. , a strong dollar story. we saw a turnaround. finding haven be in things like copper. bond prices on the way down. and lookke a step back at how emerging markets have done since donald trump was elected last week. emerging markets index that tracks evaluation are devalued. we went from just under $8 trillion. 450 billion u.s. dollars have been wiped out. volumes of picking up right a bit -- quite a bit. that is usually not a good sign when volumes spike and prices fall.
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stoddart -- new zealand's dollar have recovered from early losses after a powerful earthquake killed two people. 7.5 earthquake has been followed by hundreds of aftershocks, one of the magnitude of 6.8. donald trump has named reince priebus as his chief of staff when he takes office in january prayer desk in january. nomination is expected to bring trump closer to the party leadership. ceop named his campaign steve bannon as his chief strategist. the south korean president may the first leader of the
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country to be questioned in peddlings an influence investigation makes impeachment likely. protests have grown since she apologized last month. there is growing pressure on her to quit. sources say that stock market regulators are preparing to authorize leveraged an adverse funds tracking bit biggest equities. probably starting the hang seng index. i'm haidi lun. this is bloomberg. >> china's economy remained broadly stable following new measures for commodity prices. we have mckinsey -- we're monitoring these numbers.
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>> angie, as you said, a generally positive picture with a few caveats. industrial production coming in up six but 1% year on year. -- 6.1% year on year. that follows emi numbers that show continued expansion. pressuresationary starting to ease off, which is crucial. we saw the fixed asset investment up 8.3% for the. tofor the period of january october. retail sales were never the number -- were another number that came in up 10% year on year. the suggests possibly that perceived or expected slowdown may be hasn't just maybe has an effect on the consumer
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confidence. friday we saw the shopping extravaganza on alibaba. people spent almost $18 billion online in goods. we should watch out for the cap between how much is being spent on retail by people here. that is versus their wage increases very there is a disparity that may see retail sales edge off of the months ahead. >> we know how these parts of the economy are doing. you mentioned friday was singles day. we have credit data. what are the implications now for beijing to unwind credit and really tackle the risks in the financial space? >> that is the key question. bloomberg intelligence says there is this sweet spot that policymakers have is to create ar themselves, with possibly
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touch of fortune as well. it gives them room to tackle these financial risks. that financial sweet spot will not last for long. therefore, the confidence of consumers could be affected. that reform agenda is likely to take a slow pace, particularly when it comes to reform to stated prices. the gp track of the month is down to 69 -- 6.9% for the month of the number area that is comfortably within that range. there will be future headwinds. property investment remains fairly strong for the month of october. that is likely to ease off. affect.p if donald trump does impose a tariff that he has threatened to and tyner reciprocates, it good
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-- and china reciprocates, that is a big amount. -- unknown. >> thank you. >> let's go to japan. are seeing reason for optimism after third-quarter gdp smashes expectations. to the japan and korea editor. what is behind the surprise? >> the net at boards number had a big and lawrence on these numbers -- a big influence on these numbers. a big part of it is the imports. exports minus imports, and that was a positive surprise. part of it was a decrease in costs to energy imports. we did see increase in demand and some areas in southeast asia and other markets are we saw
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good news in terms of exports. are we going to see this continue? >> that is the big question. the election of donald trump raises the issue of protectionism. are traveling to new york this week. he'll be talking to donald trump and we will see what happens in .erms of the tbp -- the tpp we have heard there is a likelihood that the tbp is dead, but japan wants to hold on. another question that comes up is where does the yen go from here? it has been a lot weaker after trump selection, and that has been helping japanese art orders. -- japanese exporters. >> one thing that stood out to rate deflating or
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following the g -- the gdp rate deflating or falling. domestically, when we look at demand, it is looking quite weak. we are seeing spending or consumption from consumers. they best there is still the question of falling prices in japan. that is another big issue for the bank of japan going or work. -- going forward. >> let's talk more the topic. the guests have been giving their reaction to those unexpectedly strong reactions from japan. below moreave disposable income. not a surprise on exports or
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on business investments. consumption expenditures bit better than expected. tightness in the labor market here in japan is beginning to feed through camusso there is more money in people's pockets, particularly the younger generation. against them is to demand on an uptrend. >> says gdp is that the only bright spot. the profits have been coming in about 5% ahead of can senses for the -- consensus for the numbers. think of how good that is that in the june quarter, the yen -- 107.9. hundred 7.9 againstrofits are up the previous quarter, against that kind of forex headwinds.
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sees continued weakness in japanese currency. >> dollar strength across the board. i think pricing and quite a bit of positivity. boosting inflation and boosting rates good that is a higher u.s. dollar. that is going against quite bit of weakness coming through across the board, including emerging markets currencies. we do think that that can continue. >> that was the word from asia on japan. >> let's check in on the markets . a lot of this is dollar
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strength. percent.own 2/10 of a further,kening even the lowest level we have seen since july 29 against the dollar. we have been watching the renminbi today. those the weakest since summer 2009. offshoresaw the renminbi fall for the first time in three days. the other currency in focus has been the japanese yen. we have heard -- we have heard from governor kuroda, saying that the bank of japan is looking at the fx space. to gopossible for the boj further. you're seeing the when does the
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to $107.48.own they win it on that lunch break up by one of the have sent -- one and a half percent. some positive movement coming through as well following the china data, showing stabilization in that economy. particularly in the retail space, you're seeing a lot of the infrastructure doing quite well. it -- here in hong kong, a very different story. mostly in that financial space. we see investors search for yield. tencent intimate come under continuing to come under pressure. there is a soft following the
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earthquake. a bit of jittery nerves. he we has fallen in late trade -- kiwi has fallen in late trade your -- in late trade. a mixed start to the trading week here in asia. looking ahead this hour. chairman denies claims units were drifting on his watch. this is bloomberg. ♪
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>> welcome back. this is bloomberg markets asia. >> a quick check of the latest headlines.
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the comic in the value as much as $8 million. bolsterseeking to business amid consolidation in the industry trade -- industry. market does not feature on bloomberg. this is paid off for investors in this year. it is the region's best performer very -- performer. most of the games -- the gains came on expectations that pakistan would be labeled an emerging market. china resources and been capital have made a contribution and have agreed to some of the assets on its $104 billion
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takeover by sab. emerging markets were among the hardest hit after donald trump won the election. than 1.2 trillion dollars was wiped out in values of global bonds just last week. joining us now for analysis is the head of the asset management and part of a global investment firm. just take a look at what we are seeing in the emerging market equity space. outflows --g the net equity outflows, and a last friday -- ending last friday. some of the biggest hits here, what do you suppose? >> coming into this scum of
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world was recovering quite -- coming into this, the world was recovering white nicely. the markets that were there up until the election time, and obviously with mr. trump winning the election, that is a bit of concern about the imposition of tariffs or trade restrictions. also, with the strong u.s. dollar, it is actually meant that asian currencies have .allen as well i think that is the reason for the profit-taking we are seeing. because thishart has just exploded. is this cheap enough for me? if one works from the basis that only about 20% or 25% of the promises before the
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election are going to be implemented. i would say over the next few days you should start looking at emerging rfid again -- emerging markets again. angie: re: looking at sectors, countries -- are we looking at sectors, countries? who are going to be the biggest winners? think the biggest losers include latin america for obvious reason. -- emergingon markets. if you want to play recovery trade, you have to look at latin america and -- america. chinare's budget data and come anything exciting? >> these are coming into the election, actually projected to be quite strong.
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the japanese ddp data was quite strong. -- gdp data was quite strong. that has contributed 5% to the gdp. that is because imports were collapsing. that is a bit strange. i think the chinese data was ok. retail sales of 10% is ok. angie: it's ok, but what about 2017? let's pick up that conversation we come back. next, inc. shares are the most performers in japan is here. >> that was until donald trump spectre last year. this is bloomberg. ♪
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angie: welcome back.
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this is bloomberg markets asia. >> japan's biggest banks are struggling to make money from landing -- from lending. there is a report later on. we're joined now from tokyo. what should we expect when these banks cannot with their report card? --, out with their report card? >> estimate -- our estimate is that they will be down by about 20% of net income level. the largest bank is looking at a slightly under 20% down. theprofit could be up by 30% this time round, that is a mage they incurred look down on the bank in
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indonesia. 20% down across the board. why is this happening? negative interest rates. it is hard for the banks to make money on lending. the margins are being squeezed. some of the lowest margins of the world, and it is not looking like it is going to get better in the near future. come the yen has in aboutand strength 18% since the last time around. , bond tradingside appears to be fairly strong this time around. we are expecting to see a drop in profits here. the plan to be to sell them these holdings. they'll be another point to see. the result of all of that is
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about 50% progress to their full forecast. angie: that is a good forecast. any headwinds with a trump victory? more so a tailwind than a headwind. three trading days since trump was elected, banks on average have actually jumped. markets are reacting to some of the things we have covered here. particularly in the u.s. where he is talking about repealing some of the regulations that have been imposed on banks the financial crisis, they may be able to get back into businesses like proprietary trading. the bigger to those bigger banks have jumped and more. they also have a major investment in morgan stanley. inre are some bright spots the future. will be watching to see what
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happens. angie: thank you for that. >> we are looking like to the act and reopen in tokyo -- the afternoon reopen in tokyo. this is bloomberg. ♪
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♪ the latest first word news. china's economy stabilized. industrial production rose 6.1%. retail sales climbed 10%. investment increased 8.3% in the first 10 months. the yuan at its weakest since 2009. a measure of expected volatility has jumped to the highest in three months with donald trump's protectionist stance prompting
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china to allow steeper declines. forwards have weakened to a seven-year low. expanded morey than forecast with the rebound in exports compensating for weaker spending. gdp grew 2.2%. private consumption grew just .1%, and business spending was unchanged. the gdp give later dropped 1%, the first decline since 2013. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. juliette: let's see how japan has come back in the afternoon session after a solid morning session. 1.6%,uing to climb, up the pasta gdp data, you're on your of 2.2% in the third quarter, but yen weakening past
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107 to the dollar. boj governor kuroda saying they are paying close attention to market, but a lot of movement in exports stocks in japan boosting the nikkei. the shanghai composite in positive territory since the china data came through. and a lot ofntum the industrial space, electricity, and railway starts doing well. story, kong, a different the search for yield, still a lot of weakness and a lot of other players. tencent continuing to fall, down 11%. new zealand's market has come back after jitters in the morning session following the earthquake. the kiwi stronger. been some weakness and day, led by thebat
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decline in gold players. theng coming out of bonds, 10 year yield rising for a third theecutive session, 2.65%, state of play across equities, currencies, and market since lunchtime. david: welcome back. haidi: i am angie lau. bears are finding a friend in donald trump. to the highest in three months, while ford's weakened to a seven-year low. forwards weakened to a seven-year low. you might remember donald trump has threatened to call china a currency manipulator on office, and hen threatened to slap 45% tariffs on china. whether he does that or not, analysts are saying any restrictions on trade with china means the pboc may want to
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tolerate faster yuan depreciation to offset the effects. we all know what donald trump's victory has meant for the dollar, another source of pressure for the chinese currency. i guess markets are pricing in the expectations going forward? you mentioned the implied volatility in the options market, that has surged. the 12 month non-deliverable weakened past seven for the first time since 2009. bears have been restrained, but that is starting to change with the prospect of a donald trump presidency. haidi: we are saying it passed levels that we have not seen since 2009. what is the next key level? sound random might , but you have been around for a while and might know that is the
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level where china pegged its exchange rate in the aftermath of the global financial crisis, so crossing that will be another psychological break for investors. the last time i checked, the yuan was 6.82, so we are headed there. david: i have a simple chart here. where analysts thought the yuan would be at this time. we have basically blown past these estimates. we are at 6.82. when are people going to start revising this up? at the moment, it doesn't look good. much have not heard that about forecast revisions yet, but analysts are still trying to process the stunning results of the u.s. election last week. we are definitely starting to hear some recommendations. top of my head, at least
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three banks are recommending investors short the offshore yuan against the dollar, so those forecast revisions might be coming. haidi: thank you so much for that. world's most successful casino ever may be located in a remote american territory run by a former protége of donald trump. haidi: chinese high rollers are , where on saipan staggering numbers have attracted the attention of u.s. officials. saipanamerican island of is a remote spec in the pacific. sandy beaches, world war ii relics, and the most successful casino in the asia-pacific, if not the world, all from temporary tables at the end of a duty-free stripmall. across the street, hong kong listed imperial pacific is building a permanent $550 million casino resort. >> it will be the most luxurious
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hotel in saipan for sure. from most mainland cities, saipan is a new choice for chinese high rollers wary of beijing's corruption crackdown. the vip story gets weaker in macau, it should pop up somewhere else, and that somewhere else in this case is saipan. the least,ing to say revenue from the makeshift casino with 16 vip tables already generates a reported per table daily revenue of $170,000. the is eight times that of grandest macau casinos. a vip bets totaled $13.5 billion in the first half of the year. industry veterans how that is possible. they see a cautionary tale in the dynasty casino on the next-door island, also american soil, that closed last year after u.s. authorities find it
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for violating anti-money-laundering rules. sources tell bloomberg is saying u.s. treasury unit is looking into the activities of imperial pacific. he isrk brown said unaware of any investigation, but says imperial pacific is transparent. i heard every question you have in your mind, all my guys, my friends in macau, say this is bull. it can't be real. he says they are real bets. we don't want to do anything to break the law. brown declined to appear on camera. has corralled some heavy hitters on the board, plus advisors heading straight to washington dc, including a former cia director, former fbi director, and the former heads of both the democratic and republican parties. brown learned, the gaming business from u.s. president-elect donald trump when brown ran donald trump's casinos in atlantic city. ahead of theme in
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local gaming commission says watchdogs are in place. >> this is america. we track money 1000%. local house majority leader is not convinced. he voted against the casino bill that he says was hurried into law. it granted a single 40 your gaming monopoly to imperial pacific. >> very grave concern, i fear our people getting the bad side of this deal. the commissioners that sit on this commission are independent. we do not conclude that collude with licensing. i would have to ask you what type of drugs you are using to come up with that type of conjecture. >> proponents say saipan badly needs the tens of millions of fees and gaming taxes, including the island pension fund that has run dry. brown says the island is broke. even the former head of the
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retirees association says from a social perspective, the casino is not worth the wager. is just taking money from a and putting it in b. it is not a way to make money. a scale of one to 10, 10 being good, i think it is one. >> bad deal? >> bad deal. >> the imperial casino will deal is firsthand early next year. coming up next, china's domestic growth drivers wipe away any signs the economy is losing steam, for now. more on that next. this is bloomberg. ♪
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haidi: welcome back. this is "bloomberg markets: asia." i am angie lau. david: a quick check of business flash headlines.
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toyo tire cut its forecast. it is the biggest drop since may. the tire maker blames stronger currency and worsening market conditions for the latest forecast. crown resorts18 employees in china has now been released. the junior employee was released last week on bail. three australian nationals remain in detention for suspected involvement in gambling fraud. its crackdown on corruption, beijing is focusing on overseas casino operators that have operations in china. has shrunk to a 10th of its size following its bankruptcy filing. all but three of 14 ships are either stranded or have been seized over unpaid bills.
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court overseeing the receivership is set to name a better for asia and u.s. businesses as the company reports earnings today. haidi: welcome back. at 10:00 a.m. this morning, all , showsta comes out industrial production, retail sales, fixed asset investments, all pretty much within expectations. itthis a good sign or is being overshadowed by something else that happened last week? think coming into the u.s. election, the world economy is doing quite well. the u.s., china are doing well, and the numbers today on japan gdp was good. it was ok. what is going to
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happen depends on what policies, especially global trade policies , what the administration would like to implement. if there is that 45% tax on china, who were hurt more, china or the u.s.? >> i think it will be both. the short-term affect will be on china, definitely. term, what that means is that inflation in the u.s. will be higher because you are bringing back industrial activity which actually was outsourced, meaning if you want to bring it back, you are allocating resources to something inefficient, and that will raise inflation, and if inflation were to rise too much, there is no other way the fed will have to raise rates in order to counter that inflation, so with the end, some people
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have started project that 2018, if that were to happen in 2018, a big recession in the u.s. as a result. the inflation would be a one-off, then you have base effects. america will accept the fact that their iphones will cost them more because of this. >> is why i think there will be deals. it's like the way japan built car factories in the u.s. to build on this and nissans -- to build hondas, nissans, until your does. i would not be surprised if china and other exporting nations would do the same deal with the u.s. we can go into a joint venture and build together. japanese taking advantage of a stronger yen, but the chinese are dealing with a weaker yuan, so any deal would
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be detrimental when you're a train back to china. >> china is holding a lot of u.s. bonds at the moment, yielding 2%, so the thing is, are you happy with 2% yield or would you go into joint ventures with the u.s. government and become more friendly with them and maybe earning 10%? china cannot just sell out of all their u.s. treasuries yielding 2% at the moment, but they like to do something else with that money? when you rather be in equity than death? >> what happens to yields now? the auctions last week on demandies, the auctions was quite weak. people are expecting those yields to come up further from now. how far can yields go of? >> according to our fair value
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of u.s. 10 year bond yields, somewhere around 3%. if you look at the nominal gdp numbers in the u.s., it is , and usuallyto 4% 10 year bonds reflect a nominal gdp numbers, especially in a country like u.s. and japan. on that basis, 3% is not the highest 10 year bond forecast you can attribute in terms of , bondsr value, so 2.15% have been in a bubble, and the bubble has burst, and so the question is where does it get to. , 10 yearat some stage treasuries will traded 3%. >> that's bad. >> why is it bad? rising yields essentially mean people are expecting growth to pick up. the other part to the equation is when you look at the spread between 10 year yields and
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bunds. which polls which where? bunds. yields go up and follow? unds have the benefit of the qe program, so either way that will keep it at reasonable levels. the u.s. dollar will continue to strengthen against the euro and yen. >> that is only for a short time. the spread will narrow as qe comes to an end. that will benefit the german economy ultimately, so therefore a rising tide will be lifting all boats perhaps. in certain harbors. , there is a big question on trade flows. >> absolutely. >> with mr. trump like to wear a european made suit or an american-made suit?
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i don't know. >> italian, i think. >> chinese probably. >> there you go. anyway, it all depends on deals. mr. trump is a dealmaker, and i think whichever country that deals with the u.s. can actually make deals to benefit both in the end. to win.s not going >> there is room for joint ventures, because the u.s. government wants to spend money on infrastructure, so why not invite china in as a partner in those joint ventures? who knows what will happen, but there are deals to be made, and we wait for those deals to happen.
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they are not looking at jds. -- joint ventures. >> china is very adaptable. china has done extremely well despite all this, still growing at a rate of 6% per annum. ,> we have talked about trump just the tip of the iceberg when you look at the elections next year across europe. do you think we will see an entrenchment and anti-globalization? >> i think we could. the other governments must have learned something through the brexit vote and the u.s. election. >> you would have thought so. >> exactly what i say. politicians are not stupid people, right? >> ok. >> they are not. >> idealistic. >> they are there for a reason. i'm sure they have seen the
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signs, so they have to add up. >> they are smart, but of course what is the agenda? that has been under question of the electorate has gone to the polls across the u.k., america, and then across europe. we will leave it there. thank you so much for that. coming up next -- david: the latest boardroom chairmant tata as the denies younis were drifting under his watch. this is bloomberg. ♪
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welcome back. i am angie lau. this is "bloomberg markets: asia." have returned almost $30 billion in high denominated votes after the byernment surprised everyone
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banning them to combat corruption. over the nowded illegal 500 and 1000 rupee notes. atms are being modified to handle the new bills. haidi: india's biggest aluminum producer has tripled its net income last quarter on .ost-cutting measures 65 million dollars, far exceeding estimates. set up a committee to decide on the type of offering. shares have more than doubled this year. the company's the best performer on the nifty. david: the chairman of india's biggest conglomerate has denied allegations of mismanagement. cyrus mistry issued a statement defending his record. haidi: let's get the latest developments. what did mr. mistry say? says he deployed new
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policies because of stringent corporate governance rules. he said the new roles limited the involvement of board members. it. is the thrust of he was responding to a nine page media release where it was claimed that mistry was trying to have tata units drift away with the new policies. it is threatening to prolong the turmoil that has led to a selloff in tata companies. take a look at this, in the three weeks since mistry was ousted, tata group of companies have lost more than $10 billion in market value, lagging behind india's benchmark, not pretty for india's biggest companies. a legendary dynasty now caught in a public spat. haidi: we have been likening it
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ollywood film,b but tata trying to remove mistry . as it likely to be successful? haslinda: we don't know yet. tata sons held a meeting to remove mistry. here lies the surprise. support for mistry speaks and is crucial to have the support. there are at least three boards, steel himtata motors, and chemicals. we don't know how this will pan out. -- of the subsidiary it is subsidiaries issued a statement supporting mistry days after he was ousted, so he does have
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support within the company, and that is making the situation complicated for tata sons. the question is what will happen if tata fails to oust mistry from the board? haidi: a good question, thank you so much for that. david: bloomberg middle east coming up at the top of the hour. manus cranny standing by. what is in store for us today? we will put these emerging-market moves in context. we have our global managing editor joining myself or talk about emerging markets. the bank of japan must be ecstatic, just look at dollar-yen. what happens next in the emerging markets story, also reporting right here in the region, the largest discount player, the ceo joins us at around 8:30 a.m. what are the expansion plans?
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dennis offered, what happens next in emerging markets? guys. david: we w
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♪ manus: china's economy, manufacturing, retail sales, investment near estimates. the yuan weakest in seven years. lows: oil near a seven week , a boost in written numbers. >>

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