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tv   Bloomberg Markets Asia  Bloomberg  November 28, 2016 9:00pm-10:01pm EST

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anchor one: samsung responds to critics. they expect a list from donald trump and china. t's all down with the yen now. anchor 2: look at the dollar index which is, as heidi is saying, down a fraction at the moment, giving up some of the earlier losses, pairing those losses as it were. et's get to the trading day.
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reporter: we expected to see a little bit of decline coming through in japanese equities, however it is worth noting around this time yesterday we were seeing japanese equities in the red and they still managed to close higher. at the moment the yen strength pushing the nikkei down by .2%. there's been a little bit coming through in the kospi index. this is on reports that they have been oversold recently but also as we saw in china increase the parity today we actually saw that rise in the yuan six. so we are see manager support coming through for some of those korean cosmetic companies which many chinese mainland buyers buy into it. looking at the hang seng, it is flat there. we are still seeing a sthrong rally coming through from casino players. remember mgm china and sands
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looking good. in australia, you're seeing banking and health care stocks lift the asp 500. a little weakness in new zealand. jakarta opened fairly flat, the hang seng just now turning into positive territory. et's look at the yuan quickly. we did see an increase in the parity rate at 68.89, stronger han yesterday's. the offshore ren miby is up as ell. anchor 2: they're adopting some of the changes proposed by the activist investor.
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anchor 1: what did samsung announce today? >> they came out with a response to shareholder proposals. it's going to increase the amount of money it gives back to shareholders, specifically it's going to increase the percentage of cash flow it returns to share holders from a range of 30% to 50% to the upper end of that, 50% of free throw cash flow. most through divedeppeds. they'll boost their dividends for this year. they've also said they are planning to nominate at least one independent director to the board for next year and they're going to study breaking the company up into two, into an operating company and holding company. they haven't committed to that at this point but it's something they're going to look at over the next few months.
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anchor 2: what else are they going to compare for what elliot is asking for? peter: if you do the math on what the dividend pay utah will be it's around $8 billion more or less for next year. elliot called for a much larger dividend, at least three times as big, they would like more cash returned to share headers, much more quickly. samsung says it's going to nominate at least three independent directors. elliot would like the company to list its shares in the u.s., samsung has not committed to that at this point though it says it's looking at that possibility. anchor 1: they say the review is only samsung electronics, not reviewing the merger. is there an argument that going forward there's going to be callers in broader family of businesses to be reviewed?
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peter: certainly. samsung has come through a difficult streak here, they had problems with the note 7 smart phone and exploding batteries and they've been pulled into a political battle in the area. they do want broader changes at the company, they would love to take samsung electronics and extract it in some way from the broader group. that's difficult to do given the controlling li family but the more they can bring out the value and let samsung ewelcome tronics be a globally traded global technology company, investors would view those as ositive steps. chor 2: that's peter elstrom from tokyo. reporter: household spending in spendingl, declines in
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in retail sells has continued since august, when weather ffected sales. coecd has listed its tpwhrobal forecast for the next two years, predicting a boost from donald trump and china. .orecast is 3.3%, up .10% rowth will expand to 3.6% as trump's infrastructure plans raise output. cybermonday is poised to retain its status as the biggest u.s. online spending day of the year, despite quds hers hitting computers and smart phones hard as well. adobe systems said spending is expected to increase to a record brs 3.4 billion, but that's not much more than was spent on
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friday then online sales jumped 22%. global news, 24 hours a day, 200. d by anchor 2: a bit of breaking news coming through. anchor 1: sri lanka keeping their rate unchanged, saying the liquidity will be used to stabilize market rates and issued a statement from the sleelan can central bank. -- from the sri lankan central bank. anchor 2: and they're trying toest salvage and agreement despite signs that the group regular mains split. anchor 1: dan it feels like the closer we get to the deal, the market crashing in, it was a done deal. now things are looking uncertain.
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>> you're right, heidi. we were told representatives from opec met for about 10 hours yesterday and there's still a lit boilt after divide between saudi arabia and iraq and iran. iraq and iran are raising their production after sanctions and battles had cut them in years past. they want to keep increasing or freeze output at current levels. saudi arabia wants them to share in the cuts with everyone else. now we're heading into the, we're in the early hours of tuesday in vienna. they have one more day before the ministerial meeting. it's unclear whether they'll be able to bridge that divide and come to any kind of meaningful output cut that could sort of help quicken the balance in the il market. anchor 2: what happens if they walk away and there's no deal struck?
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>> if they walk away with no production cut, prices will drop. energy aspect said we could see a fall back into the 20's. dan: like we had earlier this year. if that happens, you know, you're looking at more financial strain for countries like nigeria, venezuela, or energy companies have added $490 billion to their market share around the world this year. that could get wiped out. so some wide ramifications across the economic world if they're not able to come to an agreement. anchor 1: it feels like perhaps the downside risk of a no deal are steeper than the upside risk of what will happen to the markets if they actually can agree. dan: it's an interesting point, heidi. morgan stanley said yesterday if they are able to come to an agreement, oil prices go up $5. maybe up to $55 or $60 a barrel.
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when you think back to two or threeferee -- three years ago when oil was trading for years at $100 a barrel doesn't seem like that much but the oil world has changed in the past 2 1/2 years. u.s. shale companies have made it much less expensive to produce the marginal amount -- the marginal barrel that needs to come on the market to meet demand. the days of opec being able to push prices back up, to really astronomical levels are behind us. this is a new normal setting in around them. anchor 1: dan murtaugh for us in singapore. still ahead on the program. anchor 2: we'll speak to english football's players. anchor 1: next one of the biggest investment trusts talks about finding balance.
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anchor 2: rio tinto may be under investigation. the securities and exchange commission is looking to the $3 billion impairment charge on transactions from four years ago. part of a larger $14 billion that led to the departure of the then-chief executive. rio is holding an internal review on payments it made to a consultant in gi nee. anchor 1: england is looking . erseas new zealand's agriculture-led economy means three quarters of its gas output is from sheep farming.
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anchor 2: holdings hoping to raise close to $1 billion in one of the biggest i.p.o.'s in the .s. this year. the sale of $24 million share the upper end of that range would be worth more than 40% above value. >> singapore's largest office space investment trust said it's confident in the city's long-term demands of quality work spaces. >> anchor 2: haslinda is in shing pore. it's shared office space that may be key for demand, right? has linda: that's right but there's -- haslinda: that's right. people talk about the oversupply in singapore but that's caused me real estate trusts to reassess that.
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let's spoke to the c.e.o., people talk about the oversupply in singapore's market, how much of an oversupply are you looking at? >> there is a 2.3 million square feet of new supply this year, from 2018 onwards it would dwindle to less than half a million square feet per anumb. from 2020 onwards, there's no new supply. despite what the market says, the occupancy rate is still at a healthy rate of 96%. so for office space of that kind of market, compared with what the world is doing, i think it's pretty decent. haslinda: sur pridesing it's at that 96% given that banks and others have been shrinking and leaving office space behind. and banking staff are being placed elsewhere, not in a federal business district where it's cheaper.
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>> there are still a lot of large banks around but many large banks are right size, i would say, and many -- some of them have split operations, having a back office in one area. having said that trk there are other sectors that have become more active. some examples are technology companies, we've got the facebooks and amazons, in fact, amazon has recently leased warehouse space as well as new office space centering on ecommerce in singapore. they are also pharmaceutical companies and business consul tancies. insurance companies are also expanding. singapore is not just relying on inancial services and banks. haslinda: what's the outlook for office rent in the next 12 to 24
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months? >> difficult to predict what it is, i don't have a crystal ball. rents have softened by about 15% year to date. given that there's still some new supply coming on stream next year, we foresee that rent remains a little soft, however, we think that it should recover by the end of the year given that there is no new supply or rather very little new supply over the years ahead. >> we have been talking about countering the risks involved within the industry. have you had to do that? >> well, we have -- still maintain a very stable, not increasing return. in fact, our rulls have shown 7.5% increase in distribution per unit. this is largely due to the fact that we've reconstituted our portfolio, acquired, we've done
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a redevelopment of our project. in fact, we are planning to redevelop another one of our outstanding car parks into grade a office space that will yield about a million square feet of area in 2021 and we believe that will be the next wave of the office market cycle. haslinda: right now you're operating pretty much just in singapore. does it make sense to venture and and look at marks like australia, for instance, which has proven to be a strong market for this? >> we believe there's still a lot of growth po ten national singapore. we have plans to redevelop one of our car parks. haslinda: why not go overseas? >> singapore is so uncertain, the global and economic climate is sfouget a lot more
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uncertainties. there are factors that are beyond our control, for example, currency risks and we believe that that could erode our returns potentially if we're not careful, if we're not able to manage that risk well. so this is a whole market where we're able to tap into our operating experience and grow and we have done that. so we believe that this is -- the whole market is where we should be focusing on and continue to use our active portfolio management expertise to good use. >> what are the risks you see for your business going forward because businesses in general are grappling with a pretty uncertain future, not just in europe but in countries like singapore where growth is among the slowest in many years. >> we have a very stable
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portfolio of assets and we believe as long as we continue to proactively manage our leases and increase our tenant retention rate, i think we are break all the headwinds ahead. what is important is to be able to continue to develop and grow our head count and also see that the companies within our portfolio, our office tenants, which we also as a landlord help them to do by making the working environment more con deuce i for them, for their staff, and we believe that that is the way of the future as in landlords should be proactively collaborating with office tenants to help them retain
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tenants, provide the best working environment for them enable the work space digitally and also be able to tap on the working trends of the future. haslinda:ly net, we have to anet, we haslinda: have to leave it there for now. actress kate plan chet had to sell ore sydney mansion.
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anchor 1: strong chinese demand for australian properties has helped drive prices up in recent
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years. anchor 2: but new rules have made it harder and harder to get money out of china. sellblancett was trying to her house but the guy can't get money out of china. >> we know there's significant pent out demand -- pent up demand to get money out of china. 5 lot of it is going to australian real estate. we're seing a high profile case where as china clamps down on those ill list cases of people trying to get money out, a person who wanted to buy a very nice home was blocked because he couldn't get his money out. it's an example of money controls in action. anchor 1: this is a home worth about $15 million u.s., and you
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can only get $50,000 out annually. >> so how could you get the money out? we know it's a problem. they haven't reached the peek they were -- the peak they were in january or february of this year but there's ongoing nand to get money out and we see that in the pressure on china's foreign exchange reserves. we know as pressure continues, this is a story that isn't like lig to go away any time soon. anchor 2: 20 million aussies as well. 20 million is a lot, nearly 50 million u.s. could this actually, if we get a lack of money out of china, -- that mean that china there's a downturn for australian property? >> there's no doubt that chinese support for australian market has been a factor in the
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inflation there in recent years. if there was to be a crackdown, as there is now, on money leaving china and if the authorities a at the same time, australian banks aren't accepting -- aren't making mortgages, all that comes together, it would have an mpact on the market. anchor 2: and it's not easy to buy a house in australia. nchor 1: it feels like there's constraints from both sides. >> there's a backlash, not just in australia but germany as well. at the same time of course authorities in australia and elsewhere don't want to choke off investment completely because a lot of economies depend on foreign income. anchor 1: thank you for that. anchor 2: up next, corporate china with a record number of
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overseas deal. the trend look -- whether the trend looks to be reversed next year, we'll tell you why that is when we return. ♪ >> it is 10:29 in hong kong.
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samsung electronics will allocate 50% to free cash flow for shareholder returns this year and next and conduct a major buyback at the end of january. it is also looking at existing on international exchanges. after the investor has been urging samsung to return mark cash to shareholders. -- return more cash to shareholders. iraq a 10 hour meeting, and iran continued to express objections to cut oil
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production. iran wants to raise output to pre-sanction levels, while russia is willing to freeze, but not cut. ed thirregulator blocks thei eir bid for antitrust immunity. the carriers say they cannot meet a 14 day deadline. australia's competition regulator will refuse applications from four banks to negotiate with apple. they wanted to act as a negotiator, citing a significant disparity in budgeting power. the regulator says the benefits are uncertain. global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries around the world. this is bloomberg.
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is bloomberg, asia. what stocks are you watching? >> i am looking at some of the koran cosmetic stocks. they are rebounding significantly after sunset they had been oversold. up by almost 7%. a note from merrick securities saying that not only have they been oversold, but the best china has raised interest rates for the yuan could have sustained chinese demand. hengan is up by over 4% in the trading volume has surged. this company builds that hygiene product. have a look elsewhere in australia. it is one of the worst performers on the regional
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index. it is in the telco space that it is down almost 21%. this is off of concerns, these process that these properties will have to pay. let's have a look at the overall broad market. you can see little bit more conviction coming through than 30 minutes ago. china has turned positive, up b 1%. -- up by .1%. the yen, it into we can come ollar,g at 112 to the d but we can see a little bit of losses coming through from those export stocks that have rallied quite strongly over the last couple of weeks. looking at australia, we are seeing banking and health-care stocks lift the asx 200. a bit of a weak session coming through from new zealand. the southeast asian markets are pretty positive, though the /3ilippines index is down by 1 3 of 1%.
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we saw a stronger fix coming through today from the pboc. remember, it did hit a record low about one week ago. the sign of that resurgent dollar showing a little more weakness coming through in the last couple of sessions. rishaad: thank you for that. juliette saly there. haidi: syngenta fell the most in one month after a report that china is planning curbs on overseas deals. rishaad: we are looking at these possible restrictions. this is a real plan now? >> it is. re, we will seeu some of these deals drying upl. . according to bloomberg services, there was not an exact reason given for this clamp down. there is downward pressure on the yen. so, if you look at some of the
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regulations that might be put into place, overseas investments of $10 billion and above might see an end to those overseas property investment of at least $1 billion by state-owned enterprises. and also, taking private owned companies and using on char with capital, restrictions on overseas investments of at least $1 billion in industries outside of the core business. these restrictions will last until the end of september next year, but there will be a few strategic deals allowed to happen. we have seen the yen beaten a fair bit this year. the government is stepping in to support it. it does look like the currency is a factor behind the timing out. haidi: how much exactly are these chinese companies spending abroad? >> well, we talked about the
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t syngenta. one of the ones that could put china on the map in terms of volume. we're also looking at the deals made last year, $106 billion. rishaad: buying everything willy-nilly. >> that's right. it more than doubled. if you look at this chart, you can see the u.s. and china foreign deals. chemchina is a big example of that. that would be the biggest deal ever by a chinese company. so, china really has upped its pace. like to see that
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slowing down. the restrictions coming down could help it do that. rishaad: rosalind chin there. haidi: president-elect donald trump campaigned on a promise to get tough on china, but that message might not the universally welcomed in the u.s. and corporate america could take beijing's side. >> $220 billion. that is how much u.s. multinationals have invested in china, which is more than the national gdp of vietnam, ireland, are greece. if a trade war reps, those companies will not want to lose that. -- of a trade war erupted, those companies will not want to lose that. qualcomm gets $14 billion there. gets $48 billion, which
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is only 1/5 of its revenue. will push back against mr. trump. many say they see the benefits of free trade, good in people in his helmet party. that includes john cornyn of texas. my state is the number one exporting state in the nation and not coincidentally, our economy tends to be doing better than a lot of the rest of the country." still, there is hope that trump was just talking big on the can fine campaign trail. that made 45% tariffs could hurt the chinese economy. and at a time when the country is already struggling to keep growth up. meantime, let's move fromt trump economics to politics. he is still looking for his secretary of state and there is
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a new name on the list to accompany mitt new name on the o accompany mitt romney and rudy giuliani. that is general david petraeus. he is 64 years old and a retired four-star general. he is known as one of the leading generals of his generation and has been credited with the u.s. troops surge in iraq that helped push back the insurgency. he also served as cia director under president obama, but resigned for sharing classified documents in an extramarital affair. he managed to avoid a criminal trial with a plea deal in 2015. today though, he is back and it is reported that trump is inclined to pick david petraeus, but mr. trump will meet with mitt romney on tuesday. trump has come under much criticism after even thinking of picking general petraeus after he blasted him during the campaign season. haidi: coming up next, we will be talking about china's football ambitions.
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rishaad: who should be the next england manager? this is bloomberg. ♪
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rishaad: a quick check of the business flash headlines. the indian government is presenting a deal for higher income taxes. this is part on the crackdown for tax evasion. 10% ofs a penalty of the undisclosed income. taxes take more than $87 billion in deposits. much of it previously was undisposed. haidi: crown resources are tumbling by the most in a month with speculation that the consumer company has put up a proposed restructuring. the australian financial review says bankers and lawyers have a stopped working on the plan's multibillion-dollar spinoff.
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the operator of a casino has had its credit rating put on review at moody's over concerns of the funding of a new resort. it is the best sunshine casino in the u.s. this alerted american authorities responsible for highlighting suspicious financials. haidi: china's lavish spending spree on soccer clubs and stars might not be enough to realize the goal of world cup glory. the most chairman told bloomberg there needs to be more investments in the grassroots game. think it is not only the buy and the sell. we need to conceive how to
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connect and how we can to the users and the platform. rishaad: let's get back to that venue and the sports event taking place. mckenzie is with one of the most decorated football players of all time, rio ferdinand. tom: i am very pleased to be joined by reario ferdinand. he played for manchester united during their success. rio, thank you for joining us. he retired last year, but you have been kept busy. you have your fan base and your magazine, as well as your restaurants. what brings you to china? washina was somewhere that
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fantastic and really, just to come and explore and understand the government's stance towards sports and health and the will billing of the children in the next generation. -- and the well-being of the children in the next generation. tom: can you give us a few more details on your project? adding someight be video content possibly by 2017 and you might be looking to china to grow some of that business. >> yeah, there will be some video content now involving the way the world is going. we will make it fully video and soccer focused. but football is a key area that people are interested in. we wanted to come here and understand what the people here want.
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we wanted to push out the content, not around the live games, but people's comforts and more technical things. we need to understand what the people here bond, and then to be that provider of the content for the people here. we want to marry that. so, we really want to understand what people want and they are people here who can make that happen. tom: you are looking for partnerships there and talking to government officials. what is the main focus? >> yes, all of that. we have to get the right content to the right people at the right time, and in the right package. that is very important. but also, the idea of longevity. we do not want something that is a quick fix. we want something that will be sustainable that people will enjoy and keep coming back to.
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i want to have something that has regular content coming out all the time. about understanding the market here. tom: and you do have some understanding of the market here. you visited many times. you have seen the progression of the sport over many years. how would you characterize the development of soccer? >> it is becoming more real. when i first came coming was like the beatles had come to town. it was like, we do not know much about manchester united. now, i have been here many times and people understand it. manchestertand united. they understand football has grown so much in that time since we came here. and now, the investment in the football clubs in the premier league around europe is tangible now. it is coming here and understanding what the ideas and plans are.
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i find it all so interesting. obviously, here you see straightaway the government push. it is coming from the government and there is a reason for that. it is not going to be an overnight thing. that is longevity. and that is what i'm interested in. i did not want to come here quick, in and out. i wanted something that would last for a long time and i wanted to understand that totally and become a partner because football is my life, sport is my life, and health is my life. has spent a lot of money in this. they want 30 million viewers by 2020. they want china to compete against brazil. that is a challenge, isn't it? the national team, and china's super league. how would you approach it? >> i think england has even made
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the mistake. we approach it at too high a s'vel, or too late in the kid development. at 10 years old or 11 years old, it is too late. you can get to them at three years old to five years old. that age group there is a huge negative and i think even england, we struggled and in my because we are starting later in other countries. the way the world is now with these ipads and distractions from kids playing football -- i played football in the streets as a kid. the kids in south america play football on the street. they have more time with the football and are more engaged. that is practice. that is more practice. you get to a certain age by 10
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years old or 11 years old and you have had more contact with a football and therefore, you will be better then others who have not had as much contact. many contact from an early age. the quicker you understand that, the better chance you have. tom: when you look at the chinese clubs and businesses that are buying clubs in europe, spending a lot of money on stars to bring them over here, does that cause a concern as to what impact that will have on european football? >> no, i think it is something, for me, i find it exciting. pe has monopolized it in terms of the interest. the three most popular leagues around, there will always be a somebody else rails wil will try it. china seems to be serious about
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it. will takeeir league off, i don't know. what they have done differently is they have invested in clubs in europe. will there be a change in players that go across to different countries and get the experience? theplayers that go across to different ones who have been trg there for a while might come back to the chinese super league and raise more players here. this will be the most important thing. i think the purchasing part is the easy bit. it is the sustainability. tom: they are also bringing over a lot of talk coaches and managers -- a lot of top coaches and managers. >> i think it will determine more on the project, who you are working with and what the ideas are going forward. i am about a plan and a strategy. that strategy has really spoken to me, the way i speak. it would be something i am
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interested in, definitely. it is really interesting to see what is going on here because the passion for football across asia is huge. a lot of my fan base is asia. i know that because you see that on social media. the interest is phenomenal. tom: one last question. the contract might be signed for the new england manager today. is the man for the job? >> he had the opportunity to go there and put his case forward. the guys in the camp seem like they like him. if he gets the job, good luck to him. much,hank you there in rio ferdinand. is, some of his business important to the growth prospects in 2017. haidi: great stuff, tom mackenzie. rishaad: china and the u.s. are spending big money to win the r
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ace into space. haidi: china's cheaper approach might help it get ahead. we will tell you why. this is bloomberg. ♪
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haidi: this is "bloomberg markets." rishaad: the big players battling for dominance in space with bigger plans and bigger budgets. haidi: it could be japan hit
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with winning the space race with a more budget friendly approach. rishaad: the public-private partnership is what it wants. >> it is crucial to industrialize the space project so our work becomes independent and sustainable. you should not only rely on government funding. it is time for the private sector to participate. haidi: we are now joined with more. michael, how much is japan spending on the space ambition ? >> japan is spending $1.6 million a year, which pales in comparison to nasa. rishaad: it seems they are getting more bang for their buck. >> they are focusing more on science than human expiration. they have a probe orbiting venus that is studying the atmosphere there to see whether or not earth could wind up like that. rishaad: that would be terrible. tothey are going to mercury
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see whether or not there are signs of life there. they have been on the international space station for quite some time conducting experiments. and they have also landed on asteroids and taken samples to see what we can learn about the origins of life. haidi: how does this trickle into the border economy? >> that is one of the key elements of japan's program. the only way it can survive is if private industry is on board. so, mitsubishi electric makes satellites. there are two companies he would not think of as space companies that are working with them. biopharmaceuticals and they are looking for ways to make drugs to help cure cancer. and also, a fishing net company, which is 106 years old. what is the connection between ♪ the fishing net
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company? -- what is the connection company?he fishing net >> every space agency wants to avoid the crowding of space. they have developed a way to latch on to these floating pieces of debris and drag them into the atmosphere so they burn up, or send them further into space. rishaad: so, it is like fishing? >> they latch onto it and drag it. haidi: fantastic. rishaad: michael, thank you very much indeed. haidi: that is it for this hour of "bloomberg markets." ♪
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>> from our studios in new york city, this is "charlie rose." charlie: mikhail khodorkovsky is here. 's richeste russia "riches man and the most famous political prisoner until president putin pardoned him in december 2013. by then he had served 10 years in prison. he now lives in exile in london and leads a foundation called open russia. they are laying groundwork for human rights in russia. the journalist writes that he is the most influential russian to ask critical questions


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