tv Bloomberg Markets Asia Bloomberg November 17, 2016 9:00pm-10:01pm EST
it is a record straight. the-pacific shares on the, topix headed for a bull market. on the way up for a seven session. let's find out more. quite extraordinary, the gains on the nikkei and the topix. still the story of the yen weakening. we have seen the dollar hold on to those highs, positive momentum from japanese export stocks. holdingei and the topix onto those highs they reached earlier in the week. elsewhere, stronger gains across the asian equity market. had and china, we just china property prices data coming through, pretty weak
there, but still a lot of bids for these casino stocks. china out by 3.4%, a switch out from energy players. by around .3%. it had quite a good rally as we saw the won strengthened against the dollar. and newian zealand looking good, some next movement and terms of the other southeast asian markets. looking at currencies, it is about the yuan, the pboc weakening the yuan again. 6.910, a lot of analyst saying we could now see the onshore renminbi push towards that seven
handle. the crudeook at price, some weakness as well, down by 1.1% at the moment. in terms of equities, generally looking good, especially the japanese equity market. rishaad: thank you. right, let's get the first word news. president obama says he won't try to stop the protests that have erupted against donald trump. he rejected calls to use his influence to rain and demonstrators. obama urged his successor to " stand up to russian president vladimir putin if he fails to meet international standards of conduct." >> my hope is the president-elect coming in takes a similarly constructive approach, finding areas where we can cooperate with russia, where
our values and interests align, but that the president is also willing to stand up to russia where they are deviating from our values and international norms. >> china's runaway property market cools slightly and october as authorities intensified homebuying curbs to avert a bubble. gained in 62 of 70 cities tracked by the government, compared with 63 in september. prices dropped in seven cities. amazon preparing to take its video streaming service worldwide and a challenge to netflix. it announced the move saying its new show will premiere in 200 countries. amazon currently streams video and only a handful of places. have spent billions licensing program and producing
original content. tesla and solar city gained after shareholders approve the electric carmakers by out the solar installer. more than 85% of stockholders voted for the deal. once a viable one-stop shop for clean energy products, incorporating cars come home batteries, and solar roofing. tesla says solar city will at $1 billion in revenue next year. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: thank you very much indeed for that. japanese prime minister shinzo abe has become the first world leader to meet the president-elect, trade talks topping the agenda, with shinzo abe promoting transpacific trade. described, shinzo abe their talks with frank but with an amoco -- an amicable
sentiment. >> we had a long and frank discussion on a number of issues in a warm atmosphere. president-elect trump is a leader i can trust. rishaad: let's get to isabel reynolds from tokyo. what is the read into this and the view from tokyo about this international diplomacy? >> right, what prime minister shinzo abe was looking for was reassurance. he has some confusion about trade, the tpp in particular, and also he has threatened to remove u.s. troops from japan unless japan pays more for their upkeep. tot shinzo abe wanted was form a relationship of trust, and that seems to be what has
happened so far. they exchange gifts. received some golf related goods, and they do have that as a hobby and common, so maybe they managed to bond over that to some extent. rishaad: what does this mean for u.s. relations between japan and asia? it is difficult to tell, they have agreed to meet again when their schedules allow and to have roger and deeper discussions, according to mr. shinzo abe, but the government's focus at this point will turn to mr. trump's personnel choices, whether he takes advisors such investorlynn and an wilbur ross, japan-friendly people who might indicate ties can go on more or less as normal. the we have seen is that
electorate in japan is concerned about this relationship. we have seen polls that have shown that more than half of people in japan see donald trump as potentially not good for trade ties and not good for japan's national security. rishaad: thank you very much indeed for that. has spokejanet yellen about a rate hike next month, saying the u.s. economy continues to show strength. andtold congress that she the bank will retain their independence under president trump and that she intends to serve her old term. -- her whole term. why did this prompt another selloff? >> it is worth noting that the 2.3% at the at close on thursday is the highest in 2016. single analysts interviewed that thought that 10 year would top 2%, but this was
janet yellen's opportunity. ofshe wanted to put any kind temporary statement before the joint economic committee to do that, and she didn't. here is what she said about the economy and a rate hike. >> at a meeting earlier this month, the committee judged that an increase in the target range had continued to strengthen. such an increase could well become appropriate relatively soon if incoming data provide some further evidence of continued progress towards the committee's objectives. world interest-rate projections, one of my favorite parts of the bloomberg business chart, shows you the odds of a december rate hike are the highest in the past couple of months, a straight line up since the election, the election stoking a view of growth, inflation, and rate hikes. 98% is the highest we have seen it today. housing starts are at a high.
unemployment benefit claims are at a 40 year low, and consumer prices continue to rise. line up thems to sun, moon, and stars for that rate hike in december. rishaad: we are talking about this, telling us there was going to be politically charged questions before that testimony. what was she particularly challenged on? >> she was given an opportunity to stick up for things that anybody knows federal chairs would probably have expected her to say, but anytime you put a fed chair in front of republicans and democrats in congress, you will get questions that run along the political lines. the first question was are you going to stay to the end of your term? she seemed to make it very clear. >> i was confirmed by the senate to a four-year term, which ends
at the end of january of 2018, and it is fully my intention to serve out that term. >> quiet words heard very loudly i think all the way to the white house and around the world actually. she was asked about central bank whenendence, and said banks are independent, economies to better. how about dodd-frank? donald trump said he wanted to abolish it, but maybe he has maybe anthat, just overhaul, but she said it has done a lot of good and the banks need to hold more capital and we the next financials crisis. she did not respond so much to trump. she did talk about debt. let's jump into the bloomberg again for a quick look at this chart that makes it clear when at look at the white line
the top, and that is the death, gdp is the blue line, but it has gotten higher, over 70%. sure yellen wants to make that when they do fiscal stimulus, spending, tax cuts, that it leads to higher productivity. that, andamant about this chart helps to understand why, so an important testimony. we will see how the markets parse it and we get minutes from the meeting next week, giving us some more tea leaf reading to do. rishaad: thank you very much. to come, donald trump pledging to raise tariffs on china by 45%, but history shows he will have a fight on his hands. china's home price numbers show curbs biting. details are on their way. ♪
property market cooled ever so slightly in october. authorities ramping up curves to avert a house price bubble. tom mackenzie is following this. give us the details. is a moderate path that these reductions seem to be going on. monitored i cities the national bureau of statistics showed an increase in prices. that compared to 63 last month. if we break it down, shanghai and beijing still posting small increases for october. look at shanghai, up 37% for october year on year. beijing up 30%. month on month numbers, shenzhen , which has seen high popping
price rises, saw a decrease of .5% for october. of course, this all comes on the tok of curbs and 21 cities make it more difficult to buy property, increasing down payments, sometimes restricting the purchase of properties to residents of the city because policymakers are concerned about this property bubble, particularly first tier cities. priceant to maintain the stability of third tear cities where prices have remained softer. what they don't want to see is a dramatic downturn prices in first-tier cities. they would not want that significant downturn to spread to third tear cities, where you have seen weakness, so it is a difficult balancing act. ratiome prices to wages has increased, and bloomberg intelligence says that will add
concern about social unrest. in terms of stocks, real estate developers in china are exposed to this and have seen big thank rep sees this year, so with another downturn, they would be exposed. sos is a marginal takedown, some reassurance to policymakers and real estate developers for now. rishaad: thank you a lot for that. let's get to our guest, who says the sector is still strongly supported even as we do have this surge in prices taking place generally speaking. thank you for coming in. what are you making of the housing market to begin with? >> as you mentioned, there is a strong spike in growth this year. with that being said, there is another note that inventory has come down.
seeing cooling because of these property curbs coming in an october. -- in october. how much of that was momentum in the property market? or is it well supported? >> it is well supported. inventory as quite tight in the highest tier cities, meaning the pricing is well supported in our view, but it has brought on different risks for individual developers. we think that depending on individual developer strategy, it might hurt them even if prices stay stagnant. rosenave some pretty rosie price predictions built in. rishaad: when do you know you are in a bubble? >> we think there is genuine
demand. there is a diversion picture and saying the lower tier cities are less supportive. digest and has gotten underway, but far from the first to tear cities. -- first-tier cities. it is becoming an increasingly polarized property market. tell me about that. look at it from a geographic point of view, individual developer point of view, there the versions in terms of quality, how well products are selling, the economics and demographics of each region is becoming more diverse. rishaad: also, there is a lot of stock unused. it lies vacant. people bite speculative play. >> that is more of a case for smaller cities. demand is still there. goingn tell the supply down and inventory decreasing rapidly within 2016, so there is
demand and we don't think -- it will support it without a large correction in 2017. rishaad: what about government policy towards the property market and how it is affecting things? caused up turns and downturns in the past, these cycles, and the more recent curbs in the property sector we think is a very strong signal that the government is intending to control that surge and to control any kind of bubble building up. see eating said, it could two more risks where policies overshoot. rishaad: that is the danger, to the downside and the upside. >> that's true. they will have to recalibrate. that will mean short-term suffering for some of the developers and the sector. rishaad: what about banks and their willingness to give loans and mortgages? >> they are.
i think the government is trying to control the amount of funding, which cause the surge in 2016. it has caused the prices to go up and the market to be in a relatively overheated state, so the government in seeing this situation has tried to tamp down funds going into this sector. we think it will continue to do so and slap on more restrictions going forward before we can control this market. rishaad: very quickly, word on hong kong property markets? where does it go next? >> hard to say. i think there will be more restrictions if the prices don't come down. it is in a similar story to being said,hat demand is also strong in hong kong. primary sales have been going on quite well, so i think sales will continue in terms of whether or not developers are
willing to clear inventory. rishaad: thank you very much indeed. let's get a check on the latest this is flash headlines. peach aviation says it is buying 13 more airbus planes for delivery from 2018. models withcludes the current engine. peach is expanding, currently airbus aircraft and once a fleet of 100 planes. a chinese company paying a record 650 million dollars for tv rights to english premier league football. the online streaming service has clinched a three-year deal beginning in 2019. it is the biggest overseas contract, worth many times more than the current price for chinese tv rights. it is a division of a retail group which owns enter milan.
and vimplecomn are planning to cut 1500 jobs in italy as the two companies launch their merge wireless provider. usecombined entity plans to $530 million to fund the fallen terry severance packages. the merger will create italy's biggest wireless provider. coming up, jpmorgan will pay 200 $60 billion to settle an investigation into hiring practices in china. we have the details next. ♪
to into the matter. what was their strategy here essentially? >> j.p. morgan or the prosecutors? >> take your pick. ,> obviously what j.p. morgan i'm assuming what they were doing was to win influence by offering jobs to the children of trying tothey were get deals with, business leaders across china, asia pacific, taiwan, and government officials. what is revealing are the e-mails that u.s. officials have revealed as part of their evidence as to why jp morgan and the u.s. government did reached a settlement. pay 260 $4 agreed to million in fines to settle this. no individuals -- there are examples ofte a few different companies and agencies that were and fall this, but one , an offspring of an
executive from a taiwanese company was described as having attitude issues. ,e was a chronic napper prolific napper is the actual word. son of candidate was the a deputy minister of a chinese government agency was described worste-mail as one of the business analyst candidates they had ever seen. this goes to the root of the problem, the antibribery issues that the u.s. laws have, and this is what the u.s. -- assistant u.s. attorney general had to say about the settlement. employmentestigious opportunities to unqualified individuals to influence government officials is corruption, plain and simple. this is how j.p. morgan responded. they have cooperated fully. the conduct was unacceptable and we stop the program in 2013 and took action against those involved. rishaad: thank you for that.
>> it is 10:29 a.m. in hong kong and beijing. set an all-time record by fixing the yuan lower for an 11th straight day. the currency'ss official declined to almost 2%. goldman sachs has now raised its three-month forecast for the yuan to seven to the dollar. in first public comments since the u.s. election, janet yellen told lawmakers that a rate hike could come soon as the economy continues to gain traction. she defended the fed's
independence in the face of donald trump's attack on dodd-frank. janet yellen also cautioned republicans and auto against losing fiscal policy with tax cuts and fiscal spending. shinzo abe has become the first world leader to meet donald trump. the japanese prime minister says he is confident that the tycoon will be a trustworthy leader. trade and military ties were high on their agenda. troops. has about 50,000 in japan and the countries are each other's largest trading partners. mikets from new york says flynn has been offered the post of national security advisor. a longtime donald trump supporter and address the republican national convention in the summer. a career intelligence officer, he is the former director of the defense intelligence agency. global news 24 hours a day powered by more than 2600 journalists and analysts in more
than 120 countries. this is bloomberg. rishaad: you are watching "bloomberg markets: asia". i am rishaad salamat. japan heading for its lunch break. juliette: that is right. the nikkei of for a seventh consecutive session. also having a look at the turn in the hang seng, up .4%. we have heard from hong kong few more days a are needed before the ink cann-hong kong l get up and running. we know that they will be testing of the the weekend, but it looks like it could be more of a delay. by .1%,ghai market up property prices coming through this morning, so we have seen upside coming through from those property developers.
elsewhere, mixed movement in southeast asia. 5.3%,a looking strong, up and a good rebound from new zealand, up by .6%. have a look at the stocks we are watching today, and once again looking back towards hong kong, 5.4% after evergrand boosted its holding. china listed shares are down by .2%. australia, it fell 27% yesterday. it is quite well supported today, up over 10%. a lot of analysts saying it is a
good stock. of the top performers on the regional index today. doris --aker, below 45 $45 a barrel, and watching movement in the japanese yen, the dollar holding at a nine-month high. saudi arabia's energy minister is optimistic of tech will reach a deal to cut output when the cartel meets russia later friday. oil is extending its losses due to the strength of the dollar. what are you hearing ahead of this meeting? >> diplomacy and chatter is heating up ahead of that meeting less than two weeks from now. like you mentioned, saudi arabia is optimistic about a deal. iseria is saying the group
close to consensus on capping output for at least six months, allrussia is confident in this, so positive momentum leading into that meeting, and one can only hope that something may happen. rishaad: with a deal in vienna be too little too late? arehe two biggest hurdles iran and iraq. iran is exempt. rishaad: and iraq once exemption. >> they are leaning toward some sort of deal, prices hanging around $45. the risk is that if there is no deal, prices could slip further, some are saying around $35. rishaad: any idea of how people are changing their view on prices and price targets? >> what you typically see is a lot of caution in the market.
was aber, the meeting tipping point, a surprise. not many people expected that they would come up with an agreement, so you don't want to be caught too short ahead of that eating in november because something may happen. athaad: ok, i look shareholders in tesla and solar city because they have approved a merger between the two companies, worth $2 billion. they will integrate the electric car maker with the solar company. >> test love the car company does not necessarily need to own a solar panel company. they could do a joint venture to get the panels to complete his product vision without having to take on the balance sheet and cash issues, but a lot of the shell -- shareholders who did not like the deal sold down.
theays others by into vision, elon musk, double down, and now we have a deal with 85% approval. is this new company going to look like? will solar city be a financial burden on tesla? nothat is why people did like the deal to begin with, because solar city has been burning cash for several years now. will generate it $500 million in cash for the combined company over three years. the real test of this venture will come in. tesla has some major expenditures coming up. their capital expenditure and the fourth quarter will be over $1 billion, and they are preparing to launch the model three sedan. it will take a lot of money to
get that vehicle to market, so he has some huge expenditures for both companies on key products that will make or break things. need sixindia may months to replace the high currency notes it has recalled. the government is falling shy and there are fears a cast crunch -- cash crunch could harm the economy. we have no rest bite inside, have we? in sight, have we? haslinda: massive lines that the atms which run mt, and that has left people having heart attacks in the lines. also the inability to get money for daily essentials like food, so not surprising that businesses are struggling. some wholesalers are cutting prices of perishables to help them sell. tough times, deutsche bank
predicting gdp may be cut by half a point. , it mayrt in particular take about six months to replace all the currency band. -- banned. a risk toing to be india's growth, which was the world's fastest-growing major economy. now it is pretty much at stake. beenad: how much cash has taken out of the economy then? >> a lot. more than $220 billion worth of cash taken out of the economy. is printing new notes. workers are working double shifts to get it done, but because the focus is on those two denominations, they have almost stopped printing 100
notes. this is the bread and butter of the informal economy. worse.uld make matters still having said that, india's finance ministry says don't worry. things will improve shortly. there is enough supply of notes because production started two months ago, but told people not to board currency notes. india finding itself in a very tricky situation. rishaad: thank you very much indeed for that. looking at what has been going on in india, high denomination notes being replaced. trump won't beld there, but his trade threats will be. we have a preview of that summit, coming up. ♪
business flash headlines. american lawmakers have voted to bowling from doing business in iran. it opens the way for the sale of $25 billion worth of aircraft. it stopped the treasury department from authorizing bank transactions. news. fell on the beijing has suspended building projects in the hope of tackling the city's choking pollution. authorities issued an alert on thursday, smog expected to linger for at least three days. forvice mayor ordered emergency measures, including restrictions on coal burning and heavy vehicles. outdoor activities have also been canceled. mcdonald's may soon serve customers at tables across the u.s. such service is only available at 500 outlets. the chain is bringing mobile
in 2017 as well as more digital kiosks. forcingompetition is mcdonald's to move away from a stripped-down approach to restaurant service it pioneered. those are your business flash headlines. rishaad: apec are meeting in trade and the prospect of rising protectionism likely to dominate their discussions. this is the first major global meeting since donald trump won the presidency. >> yes, it is. that has changed the world to a large degree. rishaad: the prospect of it has. >> he campaigned against free trade, against this idea of the tpp, which the u.s. has been a champion of four years under president obama. meeting has dealt
with this agreement, and now obama is going there, but as a lame duck. rishaad: is tpp dead in the water now? >> people are wondering how it can be salvaged. we had prime minister shinzo abe going to convince donald trump of the merits of tpp. we have a lot of asia-pacific leaders watching that, hoping he could convince the president-elect that you should go forward with this for economic growth and to show u.s. leadership on trade in the asia-pacific region. rishaad: now of course china is there as well, not part of tpp, never invited to join that. a china-ledacles to similar deal, haven't we? >> there are two competing deals. now with tpp looking like it
is dead, asian leaders are turning to the china-led deal and saying if tpp is done, we will go for this one, and china's happy to take that leadership role there. rishaad: thank you very much indeed. let's look at chinese steelmakers. they are forecast to flood the , stokingain next year overcapacity and renewed trade tensions. this is coming from fitch ratings, which is estimating that 100 million tons of chinese steel will be exported next year as producers benefit from a input yuan and lower prices, also benefiting from stronger sentiment when it comes to the auto sector, and this is likely to add pressure, particularly on the side of brussels and washington, who have been ramping up the
pressure on china when it comes to their steel exports. at thethat this year g-20 following last year's record exports, and policymakers from europe and the u.s. pushing china this year to rein in that capacity. china said it would work to do that, but if fitch ratings forecast for this 100 million tons comes to ask, then expect that pressure to continue. we know brussels itself is looking at measures to protect its own steel market, and we have the added factor of the new president-elect in washington to contend with as well when it comes to this. there,: obviously he is and the president-elect is willing to impose those tariffs he has talked about. how is china likely to react to that? >> we got some indication in an editorial this week which warned of tit-for-tat measures should president-elect trump initiate
those tariffs he talked about. the editorial talked about reining in the sale of iphones, us-made autos, blocking the sale of american soybeans to china, , but it boeing orders is not just rhetoric. china has indeed reacted swiftly tariffs put in place from washington. we have an example from the steel sector in this year. in october,, then onna putting into place materials. we have seen the same thing layout on chinese terrors -- tires. following that, the chinese put tariffs on american chicken, and we saw in fact this year that terrorists on american chicken
extended for five years. tariffs on american chicken extended for five years. the chinese can make it difficult for them as well. earlier this year, we saw goto tot xi jinping boeing and sign a $38 billion deal. so there is a lot to consider for the incoming president. rishaad: thanks for that, tom mackenzie in beijing. we are looking at what is hot and what is not in the fashion business. we will hear from the chief executive of global brands. this is bloomberg. ♪
streaming service globally, saying its new show will premiere in 200 countries. it currently only streams video and a handful of places. licensingnt billions programming and producing content for its prime service. mexico's central bank raised its key interest rate for the fourth time this year, stemming from the peso weakness against the dollar. highest since 2009. donald trump's campaign rhetoric have dragged to the peso at more than 20 to the dollar. global brands at group, and 95 percent drop in first-half profit. optimistic and told us that the u.s. election did weigh on sales.
every line except for the net profit line is doing unbelievable. we are very happy with our business. the market is relatively weak generally around the world. the u.s. is by far the strongest market. the election had a lot to do with the slow down, and i think that now that it is over, we are in a better place. our business is not going up and down based on the market. it is based on our brands, people, and the relationships we have with retail. >> you saw consumption lower ahead of the u.s. election? were their political concerns that led to that? >> i think people were preoccupied with the election and not spending much time shopping. it was the biggest reality show that has ever been in the united states at least. >> with a president elected donald trump who has been on the
campaign trail talking about stricter trade restrictions and a closing off of the u.s. from trade with other countries, including many in asia, is that going to impact your business? >> first thing is we produce all over the world in many countries , and our partner, we come out from the largest sourcing company in the world. they produce over 50 countries, and so a little bit less than half of our business is in china and a 45% tariff on china would be catastrophic, not just for this business, but for the united states. at one thing when we look donald trump, he is a businessman. when you look economically at what that would do to companies , the care, walmart
industry, the whole supply chain relies on china at this point. the first answer is we have alternatives if something catastrophic happen like that, although we don't believe it will ever happen. . believe he will be pragmatic the finished goods, but the supply chain in the parts, incredibly important for u.s. industries. >> when you say you have alternatives, what you mean? apparel is a for strong alternative. in a lot of cases, better than china. we have the vietnam. we have the whole central america. i can go on and on and on. that will beountry ,ost hurt if anything happened probably less probable, but more
probable, but probably won't happen, mexico. that is the area we do very little wind. talking to global brands group ceo. a quick check market wise, japan up again, .9% higher. that comes against a backdrop where most asian equities are on the way up. japanese stocks getting another left from a weaker yen now. the topix heading towards a bull market. janet yellen signaling the central bank is close to raising interest rates and doing so probably next month. we do have three stocks advancing for every two that fell back on the msci asia-pacific index. the straits times index up by .5% there. what iset's find out coming ahead on bloomberg markets.
here is a look at what is to come. about we are talking china's runaway property market, home prices cooling slightly and october -- in october. what does it mean for china's annual growth target? we will be live in beijing. ofan stocks looking to end the week positive, japan heading for that bull market, the yuan testing fresh rolls. -- fresh lows. all of that is coming up on bloomberg markets asia. this is bloomberg. ♪
♪ announcer: from our studios in new york city, this is "charlie rose." charlie: we begin this evening with a look at president-elect donald trump's transition team. and the aftermath of the election. it has been a week since he had scored a stunning victory over democratic rival hillary clinton. he has denied reports of chaos in his efforts to fill staff positions in the new administration. rudy giuliani is believed to be a leading contender for secretary of state. earlier today, senator chuck schumer was elected as the next leader of senate democrats. he is now one of the party's most influential counterweights to the trump administrn.