tv Bloomberg Markets Asia Bloomberg January 15, 2017 8:00pm-11:01pm EST
♪ rishaad: it is 9:00 in the morning in singapore, midday in sydney, 8:00 p.m. in new york. i am rishaad salamat coming to you from bloomberg asian headquarters in hong kong. this is "bloomberg markets: asia." ♪ the pound falling to levels not seen since 1980 five as theresa may expected to take a hard line on brexit. state of this union, trump taking aim against the european union, indifferent on whether it stays together. ka-shingd deal as li
agrees to buy a company for $5.5 billion. right, half an hour from the start of the trading week. no trading in the u.s., martin luther king jr. day. in japan, machinery orders better than expected, the ppi,cer price index, factory gate inflation better than predicted by economists, but still in negative terrain for december. but see how the markets are tracking. david. david: thanks. we are looking at a mixed bag. markets just opening up, taiwan, malaysia. have a look at singapore. one of the better performers performingthe best
market in asia save for the philippines. mixed.ight times index, ,verything else canceling out japan pulling things down, australia, flipped the board, some other benchmarks at the moment. australia, that comes down to the fact you are getting a decent bid when it comes to the mining stocks, japan, strong japanese yen weighing on that index. assets.ook across 1.20, roughly at those levels. dollar-yen, still close to session lows, 114. at 2.4 yields unchanged percent, higher from friday, regional sales playing into that. west texas, not a lot of action.
said, when you look at the commodities space, china so far the past week or so. ore, thatbber, iron is in renminbi. you get roughly 85 when you do the math, a hedge their against expected appreciation in the chinese renminbi, but barclays says that is a blip. let me wrap things up with a its bestet to extend start to the year since 1983, floods and thailand disrupting the outlook for supplies, could cut supplies by 20% this month. this is shanghai. we are looking at a 9% pop for
this quarter, so the fundamental story, but also a party a cross commodity exchanges on the china mainland. rishaad: thank you for that. let's get you up to speed with some first word news headlines. here is sophie kamaruddin. donald china has urged trump to recognize this and sensitivity with regards to taiwan and says it's one china policy is not negotiable. donald trump told the wall street journal he would only commit after assessing beijing on trade and pricing issues. the president-elect said he is not prepared to declare china currency and if you later's immediately upon being sworn in. delaying a decision on seeking an arrest warrant jay y. lee, investigators question him for 22 hours as a suspect in a
bribery investigation. prosecutors say they will make the decision by early monday afternoon. the heads of south korean conglomerates having question whether they were pressured to give money to foundations controlled by choi soon-sil. the press trust of india reported the finance ministry is likely to finalize a capital infusion plan for state-funded vendors this week. the government could offer more than 3.5 billion dollars in assistance, which would be announced on february 1. luxottica and essilor have agreed to a merger. closedin the companies higher, 1.4% on friday. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg.
rishaad: well, li ka-shing agreed to buy duet group and a $5.5 billion deal, agreeing to that takeover. it raised the original offer it made in december. let's get to pay her a williams, how is this deal structured and what about shareholders, are they going to give the thumbs up? >> hi. it is an interesting deal. it looks like shareholders are likely to approve it. ofre have been a couple analysts saying it is likely to get over the line. in terms of the structure, li split betweenly three of his different companies , which will require separate he has said that can move around a little bit
depending on how those votes go, but it appears to be on firm footing at this stage. rishaad: right, well, the point is that there have been many , do you expect&a li ka-shing to encounter foreign investment issues with this move? >> yeah, of course. li ka-shing did get knocked back last year when he bid for oz groups owned by the new south chinagovernment, as did regarding national security concerns. this time around, the assets are mostly electricity and gas distribution, a gas pipeline in western australia, not seen as sensitive, so it seems to be that foreign investment approval is pretty likely. of course there are some other
regulatory approvals from the hccc, but not seen as a big hurdle. rishaad: right, is anybody else interested here? , it is interesting, the final assets being sold by the ,ew south wales government expressions of interest have come up today for that, so you would expect some of the potential counter bidders for may already be locked into this. are regulations on the sidelines, but we have not heard anything yet. thank you very much indeed. perry williams from sydney. holding out hopes the
tpp will come together, even though donald trump has vowed to withdraw from it. the trade deal would be a major boost to the vietnamese economy. the message that i see is that i believe the new administration of the united states will reconsider as perspective on the tpp, and it will also try to achieve a new generation agreement that will benefit all parties concerned. i see the newly appointed members of the are, many of them, in favor of the tpp, so i think they might reconsider their decision. hour our correspondent spoke exclusively. why the optimism? haslinda: the comments from team, those taking
senior positions, suggesting tpp as not dead. rex tillerson, he said recently, he isn't opposed to tpp even though he shares some of trump's concerns, and that view goes beyond tillerson. over the weekend, we had commitments from the likes of , shinzo abe,ull also a strong advocate. quashed, theets non-'s prime minister says he is not too concerned. here is why. >> even without the tpp, vietnam will continue to move forward, because of other agreements in , so i including the rcep think this will help propel our economy forward. tpp is important, a
way for vietnam and some member states to push through reforms which it can't do in turn only given domestic infrastructure or structural constraints. tell me something, vietnam has been in tangled with china over claims in the south china sea. what about the white house, how is that perceived? haslinda: some development here. we had a statement from both countries over the weekend, china and vietnam. stability ando the south china sea and avoid any action that could escalate the tensions. vietnam's communist party chief weekend.china over the they agreed to seek long-term solutions and will discuss transitional solutions that will not affect each other's position on the issue of the south china sea. both trying to avoid tensions that piqued in 2014 when china
placed an oil rag in a dutch oil rig in a zone that was claimed -- placed an oil rig in a zone that was claimed by vietnam. rishaad: thank you for that. we will be hearing more from that interview throughout the day. j.p. morgan chase on which indices will be affected by this evolving sino-american relationship. a hitng, the pound taking over reports that britain is seeking a hard eggxit. that is on the way. ♪
navelgazing. we have the latest installment nt the pension chief indicted. prosecutor special saying this in a text message. markets, ourk to next guest saying diversification should be the top of investment lines this year. he is normally in toronto, but here in hong kong for us this morning. what is going on? let's get your reaction to this massive move by sterling ahead of theresa may speech on tuesday. it has been mentioned that this could be a market-moving lecture or speech, so is a christ in now? david: sterling has certainly moved aggressively to the downside on the comments from the prime minister.
as well as the hardening tone among german industrial companies. ratchetseen both camps up the pressure on the potential for a clean break and a hard brexit, and you are seeing it in sterling as you mentioned. rishaad: from looking at it on the other side of the atlantic, canada, what is the mood like when people view it? does it seem like an opportunity to reestablish ties with canada? david: i think so. freest concluded a large trade deal with the common european market, which may be one of the last major trade deals, so canada remains pro-trade. if the u.k. goes in that direction, we would love to reestablish that trading relationship, although it may be more complicated with the nature of international trade deals. what happened
november with sterling, the of time referendum maybe not so much, but has it people running a bit scared? has since the foundations of the wto in the 90's, nothing but the breakdown of trade barriers, and that has a lot of countries, countries like canada and asia and other parts of the world, running scared, as you say. rishaad: when you come here, you have been noticing how the fund flows have been into diversified asset strategies, is that the right way to go? david: we think we have the right strategy to manage this higher volatility. global fundamentals are coming back, global manufacturing at three-year highs, a resurgent earnings recovery, but at the same time, significant political risks and risks to international relations that may weigh on
multiples and cause a rocker and -- rocky and higher volatility and markets going forward. rishaad: we just got the yuan fix, your reaction to that. again, three straight days of strengthening the currency. are they sending a message? david: they want to ensure that there is a somewhat two-way flow. it is on the way to being a more currency potentially impacted by capital flows. they are probably looking to less of a hand in it they today, and obviously there is very much a sense that the renminbi is only going weaker, so i think it is interesting they would choose to strengthen it. , let's: that the side
concentrate on what you are doing at templeton at the moment in terms of responding to investors. what is the question you are asked the most? david: what will policy evolution be like, in line with the rhetoric in the u.s. -- rishaad: you don't know day from today what will happen. david: something like tpp may not be dead. it remains to be seen. vietnam would be a big beneficiary of that deal. is a lot ofhere uncertainty with this current administration. canada is a massive proponent of this as well. it is against this backdrop of an improving global economy, even today's machine orders out of japan was not as bad in terms of month on month anyway, but that ppi was still negative year
on year, but getting better, so will we see proper inflation in japan? david: i think we will. the economy is tightening, running at full capacities, wages picking up. machine orders were quite strong. under the u.s. election, but the global reflation has been in place. don't know,in, we people thinking it will happen. i guess by believing that, you can create it. we've had instances of where people have talked themselves into a recession. david: certainly true. rishaad: what will 2017 bring for equity markets? david: more of the same. reflation will win out. global fundamentals are better, an emergence from an earnings recession led by the u.s., but
revisions and europe and japan. fundamentals stabilize for the first time in 4-5 years, so if the global fundamentals are allowed to us or themselves, i.e. the political noise does not dominate, we think it can be another decent your for equities returns. the bondwhat about market, is the bull market over in your view? the projections are ridiculously low. david: yes, we think the reflation that started is part of a bigger trend. consolidation with the yields having gone up too far too fast. we cannot tolerate significantly higher levels of interest rates, so i don't think we should celebrate yields rising quite as fast again this year as they did last them otherwise we may run into trouble. rishaad: thank you very much indeed. some breaking news, the chinese
property developer down 9% in the session. the reason why, looking to diversify beyond real estate, looking at tech, farmer, finance, and resources deals. the developer taking a $2.2 billion bet on three technology companies. the chairman says the company views real estate growth stagnating from 2026 onwards. he is looking quite a long way i heads. a reported megamerger between two players in the global i wear industry. this is bloomberg. ♪
will this deal work for both parties? it seems to be a good one in terms of synergies, a lens maker, the world's largest lens maker, combining with the largest sunglasses maker. it seems like a natural. this is also a great deal for the chairman and founder of luxottica, italy's second richest man. he came back in and took the company over from ceos that did not work out, saying he will make some big deals, and now he has made one. rishaad: it looks like the biggest cross-border deal in europe for some time. it does seem to be a surprise given that there has to be regulatory issues here. they would have a huge market share. >> they do. they have not discussed the possibility of a deal between the two companies a few years is associatedor
in the medical business, a high tech race they are working on. both of these companies have been in discussions before, but it was a bit of a surprise they were able to make a deal this time. in the past, the stumbling block is that essilor did not have much of a consumer side, and now they have built one, and that opened the door for this deal. rishaad: thank you very much indeed for that. looking at what is going on with the markets at the moment. japan with better than expected machinery order data. bears and charge of the moment. .7%.ikkei down scandal,e influencing the indictment of the national pension chief there. australia and new ne zealand on the upside.
rishaad: this is "bloomberg markets: asia." . am rishaad salamat shanghai and hong kong about to open, reaction to what has been happening in terms of political developments over the weekend, data in japan, better than expected macro data, machine orders, pti not as bad as economist thinking there, but factory gate numbers, wholesale prices, still negative, so the tendency for cpi, the consumer price inflation gauge, looking like it will perhaps be under no pressure to rise in the short term at least. taking place when it
comes to new york, martin luther king jr. day over there, so bond markets and equity markets are closed. that is what we have at the moment. let's find out the trading session and the market open in hong kong. here's david ingles. david: right. the timing of the open across these markets could not be much worse, as far as the day is concerned. a lot of markets falling, tie of aower, australia little bit below .5%. the commodity markets, the rally, iron ore, 638 right now, the may contract. hit 6-8 weeks we ago was 645. have a look at rubber, 5% off the highs. if you flip the charts, it takes
you all the way back, have a look at this. your 63%. there are floods in thailand, the world's biggest exporter of rubber, and that is threatening to cut supply by 20%. that is adding two reasons why people might be speculating on rubber. there is your price, right. have a look at the open in china, hong kong, the philippines, not a lot there, the fixing, yeah, quite boring, strengthening for a third day, but we have started to see an unwinding of dollar strength. go,philippines, there we 7231. can we get shares of sunac up please?
billion, leeco market expansion, markets not liking that one. it could be an adjustment, depending on how much it is spending, the assets. wrap things up with the top story for today across markets, the british pound, sterling fell below 1.2 zero. we have recovered that, but that is academic. when london opens in a few hours, we might see a rebound there. path of least resistance for the pound is down. we could be testing the less we hit during the flash crash. the a look at euro, 110 was low. we have seen some weakness in the euro. a lot of buying of protection, there we go, pound-dollar, cable
there, 9% up. that is the level at the moment. that is a three-month high there. something to watch, especially when london opens up. risk this a lot of week. we will continue to follow the story. muchad: thank you very indeed for that. let's get you caught up with first word news. haidi lun, good day to you. li ka-shing seeking to expand its energy assets, buying australia's duet group for $5.5 billion, the deal subject to regulatory approval, but expected to go through by mid-may. tos is the latest attempt bolster his australian business. he suffered that setback last year when he moved to buy a grid wasstake in oz
blocked. senator rand paul developing his own alternative to obamacare. he told cnn's state of the union climate drivest up costs. donald trump has pledged to repeal obamacare without having outlined an alternative. the outgoing director of the cia has said donald trump's comments outrages, speaking on fox news, john brennan suggested the president-elect is not have a full understanding of russia's capabilities and intentions. the comments, amid escalating tensions with the intelligence community following allegations by trump in recent weeks. and vietnam have come to a tentative agreement on their overlapping claims to the south china sea. the two countries have promised
to manage maritime differences and safeguard the stability of the area. it comes as vietnam's communist party chief wrapped up a trip to china over the weekend, where he met with president xi jinping and premier. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: beijing has warned trump not to question its claim taiwan, saying it's one china policy is nonnegotiable. tom mackenzie has the details. sparringther round of between china and the incoming president. that's right. the war of words continues, trump again refusing to commit to the one china policy, saying he would way to access china's stance and progress on things like trade and the currency in
an interview with the wall street journal on friday. this comes after that controversial protocol breaking phone call from the president of taiwan that sent shock waves across a broad and in china. chinareign ministry and reacted on saturday, putting out a statement saying the one china principle was nonnegotiable, that it was a political foundation of u.s.-china ties, and telling trump that he should be aware and recognize the sensitivity around the question of taiwan. the state media and china saying that any suggestion now that trump's on things like taiwan were just bluff were wishful thinking. it seems patients here is running thin. rishaad: what are the other main areas of contention between these two? one that we have talked about, trade, particularly if
trump goes ahead with the imposition of tariffs on chinese imports. you have broader geopolitical tensions articulated by rex tillerson last week when he said that china should be blocked from the south china sea islands, something causing a lot of anger here again. the state media saying that if that was the position that u.s. would take, it could lead to war. another issue of contention is north korea, donald trump saying china has not done enough. he did in this wall street journal article offer something of an olive branch to beijing, saying he would not label china a currency manipulator on day one, something he had threatened to do on the campaign trail, saying he wants to speak to his chinese counterparts first. thank you very much. the vietnamese prime minister is holding out hope that donald trump will reconsider his opposition to tpp. speaking exclusively to haslinda
amin, he said he is hopeful the new u.s. administration will see the benefit of the treaty. i have had a meeting with the u.s. leader and secretary kerry, and the message i see is that i believe the new administration of the united states will perspective on the tpp, and will try to achieve a new generation agreement that will benefit all parties concerned. and even without the tpp and place, for operation among countries will still consider to grow. that with thetter tpp derail that other countries will withdraw themselves and reduce cott corporation -- reduce cooperation.
the remaining members of the tpp will work together to find a solution and come up with a way to benefit everyone, even if the tpp as not ratified by the united states. u.s. president-elect donald trump has made it clear he wants to kill tpp. even thoughhappen you are optimistic that it could come up in another form? should that happen, do you see asia gravy -- gravitating towards rcep? >> the rcep countries are engaging in negotiations and i'm sure that the rcep will be promoted. i see the members of the new cabinet are in favor of the tpp, so i think they might reconsider the decision. but what i like to stress is that even without the tpp, vietnam will continue to move
forward, because in addition to the tpp, there are free trade agreements under negotiation, including the rcep, so this will help our economy to continue to be propelled forward. was initiated by china. there is a sense that china's influence and power will increase. is there reason to be concerned about that? >> while we participated in other chinese programs like the aiib or the maritime silk road, it is true that the rcep is also a china-led initiative, but as member it benefits all countries, then it is fine to participate in such agreements. haslinda: how would you describe the relationship between vietnam and china? has that change given development's over the last couple of years? china our and
neighbor countries, and vietnam is a major trade partner of china with total trade turnover of over $100 billion. vietnam, and vietnam needs china. it is a two-way street in economic development. rishaad: vietnam's prime minister there talking to our own haslinda amin. up next, donald trump signaling that he is ready to be flexible with china on certain matters, but what does it mean for relations between the world's two biggest economies? we will head to the asian economic forum and hear from j.p. morgan. ♪
facing investors at the 10th asian investment form in hong kong. what is the focused of this year's event there? we are here at the asian financial form in hong kong, and what a time to kickoff 2017. a lot on the geopolitical and economic calendar. friday is the inauguration, and full-year gdp out of china. the managingst is director and vice-chairman of asian-pacific for j.p. morgan chase. it?g week, isn't we heard lots of noise from the china-u.s. relationship with the trump inauguration five days the, how significant is deterioration in relationships or is it just noise? so far, relations have tensed
up a little bit. i would not say relations have deteriorated. there are points of contention, but economically and financially him a china and the u.s. are partners, but strategically the two countries are competitors, so the big question is how the incoming president will be handling the china relationship. u.s. and china are the most important bilateral relationship in the world. if the two countries get along, we have bilateral benefits and many multi-lateral benefits. however, if the relationships hours, you have implications for the world, not just those countries. >> trump has backed off a little bit from naming china a currency manipulator on day one. if china is manipulating the currency right now, it is to the upside, not the downside. what do you think china will continue to do? they have $3 trillion in reserves.
they have been burning through that to defend. looking at the currency volatility, in 2016, the chinese yuan depreciated 6% against the dollar. this year, it has appreciated 1.5%, so there is some volatility in the currency markets. a few weeks ago, the leadership widen the basket of currencies from 13 to 24. as a result, the dollar weightings have gone down. one of the biggest challenges come in 2016, reserves went down $350 billion to just over $3 trillion. in 2017, will they continue to burn through the reserves? they have instituted new measures to control capital flight, including putting more controls on individuals taking money out of the country, so in
the first half of the year, we will see more two-way volatility against the dollar. >> given the level of capital controls in place, what would you say is a good buffer for reserve adequacy as we get closer? they may have to tighten more capital controls so they don't burn through reserves. >> by any measure, the chinese reserves are huge. and economic terms, al country needs three months worth of imports in its reserves, but china has $3 trillion. the economy is $11 trillion, so it has reserves sufficient to fend off unforeseen events. however, it is a psychological thing. go belowes could $3 trillion, there could be some panic in the market. $3 trillion are adequate for the size of the economy. >> we already article, pimco
saying china should rip off the band-aid and let the yuan float. >> i don't think this will happen, by 2020, the soft target for the leadership to let the yuan become technically free trading, but i think that is still some time away. given global economic uncertainty, the leadership will maintain a tight leash on the currency. they are not benchmarking just against the u.s. dollar, 24 term,cies, so in the near the currency is unlikely to be free floated. >> gdp as out this friday. >> correct. >> can we believe the numbers? 184.108.40.206, this quarter, 6.7. >> they have carefully manage
the trajectory of the economy to maintain stability, so the numbers are going to come in exactly in the middle of 7%.ctations, 6.5 to will be on the front burner as well. >> thank you very much. ok, sending it back to you guys. more from the aff later this morning. rishaad: thanks. steve engle's there. let's get you the latest business flash headlines. , huge week last week, just giving back some stellar gains we did see after bids. the troubled airbag maker agreeing to pay $1 billion in an investigation leading to at least 17 deaths. it should remove any barrier for
the company sale. dalian wanda sales down 14%, due to a slump in the company's property business. wang has been acquiring hollywood assets to diversify from real estate. he is looking to list his internet financing division by 2020. nintendo's latest gaming console continues to weigh on shares, the switch. it did disappoint investors because of a higher than expected price tag, making it more expensive than rival devices. they say they are unconvinced it will replicate the success of , despite having wireless controllers that can be used anywhere. the martin luther king jr. holiday providing contrasting results for two of hollywood's biggest studios.
hidden figures and first place .or a second week this after generating some $20 million in sales. ,ifferent story for paramount monster trucks flopping on its debut, opening and seventh place, making only $7.5 million apparently. pressing play on video streaming, what has driven the property coming to invest. this is bloomberg. ♪
position? he is one of the more fascinating business leaders in china these days. out with a business that is known as china's version of netflix, an online video service that turned it out to be successful. andounded that business 2004 and went public in 2010. his shares became worth billions and billions of dollars. he began borrowing against those shares to go into new ventures, including smartphones, a electric cars, and televisions. about histrash competitors, saying apple had lost a step and that it's innovation was slow and he would surpass tesla in electric cars. and all the spending on these different ventures came home and created problems for him.
that the company had some deep cash problems and he would have to cut back on expenses. that set the stage for him trying to raise this additional money. he has been able to secure more than $2 billion from sunac. this is a surprise move for them, their investors not terribly satisfied so far, but his companies, it has been good. foraad: what does this mean his companies here as well? >> it relieves a cash crunch that had put a crimp on his plans for expansion. he is very ambitious and has been trying to take on competitors in a wide range of areas. he wants to be able to build a plant in nevada to make electric cars to compete with tesla and
other companies that have been moving into this market, so it will give him more leeway there and allows him to shore up his empire in other areas. smartphones are competitive, cool pad has been losing grounds, local competition, so maybe able to gain more momentum on that front. and televisions, he had cut a deal to buy visio, but had not been able to close the deal in part because of the cash crunch, so this will give him more liquidity to do some of the things he wants to do. rishaad: thank you very much indeed. joining us from tokyo, looking at this diversification move taking place in china. bag, nokia, a mixed cues out of new york with martin luther king jr. holiday.
rishaad: it is always 10:00 a.m. in singapore, 1:00 the xmen sydni, and 9:00 p.m. in the evening on the eastern seaboard of the united states. i am rishaad salamat in hong kong. this is "bloomberg markets: asia." aeresa may expected to take hard line on brexit, sterling falling to levels that have not been seen since 1985. luxottica agreeing to merge with in arench rival essilor $53 billion dale. offershing's sweetens the to duet, music to investors years. the trading day underway in , a mixed bag when it
comes to the equity trading session. japan not getting relief from better than expected machine orders figures, the commodities complex also playing out right now. there is david ingles in singapore. david: mostly lower, a lot of the gains, all of the gains in fact, when you look at the .arket that is up, australia a rally continuing across the commodities space. there is china, singapore, highest since 2014, taking you back a few years. barclays, iron, ore at $80 is a temporary blip. why are we seeing this happen? i don't know. again, 6.55 here. -- 655 here.
they could be down to the fact it is a close capital account, money flows. have a look at how equity markets are trading. down on thecific regional benchmark. australia, the nikkei 22 lows for that index. strengthening,n closer to 114. and lookp the boards at other benchmarks across the region. southeast asia, interesting, h-sahresok -- china, below that level now, 1.2%. apart from what we are seeing in australia, to a lesser extent in taiwan, volumes are light. when you look at the hang seng 22,752.
southeast asia, i promised you that. here, i'm ins singapore, and the philippines as well, two of the best-performing indices so far by far, 5% and 7% year to date. giving back a little bit there. jakarta opening up, not bad. philippines, there we go. overseas remitted since data today out of manila. jakarta, expecting trade data. very quickly, let me wrap things up with a look at the currency markets right now. and thed about the peso data points we are expecting their. biggest a kleiner, south korean won, volatile -- it biggest r, south korean won,
volatile. 115, not acloser to lot of risk appetite to make a long story short. rishaad: let's move across to sydney and get the first word news headlines from haidi lun. ft says luxottica and essilor have agreed to a $53 billion merger. luxottica is the largest eyewear maker. oakley,makes ray-ban, and chanel frames. by 1.4%. up li ka-shing seeking to expand duetnergy assets by buying
group for $5.5 billion. it is expected to go ahead by mid-may. it is the latest attempt to bolster his australia and business, which suffered a setback last year when his attempt to buy a majority stake in oz group was blocked by the government. korean prosecutors have delayed a decision on whether to seek an arrest warrant for jay y. lee. him forators questioned 22 hours as a suspect in the bribery investigation. prosecutors said they will make a decision by monday afternoon. the head of south korean conglomerates were pressured that question of her they were whether -- over whether they were pressured to give money to funds held by choi soon-sil. the press trust of india reporting the finance ministry is likely to finalize a capital infusion plan for state lenders this week. the government could
offer $3.5 billion in assistance , which would be announced as part of the budget on february 1. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: beijing warning trump not to question its claims to taiwan, saying it's one china policy is nonnegotiable, one day after the president-elect hinted at a reset of u.s.-china relations. the details, has another round of sparring between china and trump here. tom: that's right. this is the second time in a month that trump has questioned the one china policy, which is a piece of diplomatic infrastructure where there is an it knowledge meant that china and taiwan are part of the same country. time, he did it in the wall
street journal interview on friday, saying he would not sign up to it until he had seen reassurances from china on things like trade and its fx policy. theeard on saturday from chinese foreign ministry saying chinas nonnegotiable, one is nonnegotiable, and urging trump to recognize the sensitivity of the taiwan issue. officials in china has said we will wait until he is in power and be restrained in our comments. from the china daily saying in an editorial, the idea mp's proclamations were just wishful thinking, so it seems patience is wearing slightly thin. the questiont, that presents itself, there is a whole trade issue, and other
areas of contention between trump and china, right? tom: exactly. trump is trying to tie trade to all these other big issues like issue aroundical the south china sea. rex tillerson describing china's actions in the south china sea russia's annexation of crimea and suggesting washington would try to block china from accessing those islands, provoking anger here thesetate media calling comments foolish, and the global times suggesting it could lead to war if washington were to act on that. north korea, trump has said china has not done enough to rein in pyongyang's nuclear ambitions. he did offer something of an all of branch on the currency question. he said he was going to label currency manipulator. he said he will not do that on
day one, but will talk to his chinese colleagues first. rishaad: let's have a look at vietnam, still holding out hope that the tpp will indeed come together, even though trump has found to withdraw from it. the trade deal would be a major boost to the vietnamese economy. >> the message that i see is that i believe the new administration of the united states will reconsider its perspective on the tpp, and it will also try to achieve a new generation of agreement that will benefit all parties concerned. i see the newly appointed members of the new cabinet, many of them are in favor of the tpp, so i think they might reconsider their decision. haslinda amin spoke exclusively there to the vietnamese prime minister. tell us about this optimism.
is it misplaced? haslinda: not quite. , those who would take key position and trump's the prime, have led minister to believe that tpp is not dead yet. we have heard from incoming secretary of state rex tillerson, clear to say he is not opposed to tpp, even though he does share some of trump's concerns. commitment from the other tpp member economies, that remains strong. i'll strain prime minister malcolm turnbull made it clear -- australian prime minister malcolm turnbull made it clear he is still in. u.s.,r without the vietnam will propel its economy afford an inch or other trade deals will be pushed through. take a listen. even without the tpp, vietnam will continue to move forward
because in addition to the tpp, place, and 300 negotiation, including the rcep, so this will help to continue to propel our economy forward. haslinda: to be clear, tpp is forrtant for vietnam, a way the country to be more independent from china, currently it's biggest trading partner, more than $70 billion and bilateral trade last year. rishaad: what about these canes claims that china and vietnam have over islands in the south china sea? some development. it does look like both countries want to divert tensions. both issued statement suggesting toy were what take action
maintain stability in the south china sea and avoid to take action that would complicate the situation. this is quite evident after the visit and talks of the the admin , is cheap with the chinese over the weekend. the two have a complex relationship, clashing several times, including the war in 1979. rishaad: thank you very much indeed for that. right, still ahead, i look at asia's burgeoning demand for smart homes, predictions the global market could hit $400 billion by 2030. next, speculation over theresa may's brexit speech. ♪
well, let's get you up to his beat with the latest business flash headlines. seeing its first revenue drop in over a decade, down 14% last year, a slump in the company's property business outweighed growth from its entertainment division. wang has been acquiring hollywood assets to diversify from real estate. on a tear, share price down in tokyo after bids sells.bered the troubled airbag maker paying $1 billion linked to false in -- deaths.n at least 17 nintendo, shares, there we go,
ofbling after the released details about its latest gaming console called the switch, disappointing investors with a higher than anticipated price tag of $300, making it more expensive than rival devices. they are unconvinced that it will replicate the success of despite having wireless controllers that can be used anywhere. hong kong playing host to the asian financial forum. steve has been there throughout the day. who have you got today? who is joining you now? morning again. we are at the asian financial forum in hong kong. we are going to ship to europe and the pressing issues with our next to gas, klaus regling --our next guest, klaus regling, the managing director of the european stability mechanism.
there is a lot of bureau skepticism. do you -- bureau skepticism of noise, someot of it is justified, but also ignores some of the positive things we see happening in europe. there is uncertainty. brexit is one. of course you never know what happens, but the most likely morerio is we get reform in france, and germany. so uncertainty, yes, but not necessarily something that ends
in a problem. also, people ignore positive developments in europe. growth has been above potential for three years, and the headline growth may look low, but when you take into account demographic trends in europe, which are poor, on a per capita basis, growth in europe is like in the united states. this year was higher. also, it is not widely recognized that income distribution is better and europe than anywhere else in the world, which is important because even when growth rates of low, and europe, 80% households have seen real income growth for the last decade. in the u.s., that is 10% or 20%. >> how much of a factor is a much of at, how factor is that to the european union?
the u.k. will no longer be part , so is itmon market better a hard brexit? british up to the government to decide what to do. it looks like it may be a hard brexit, but we are waiting for a an explanation from the prime minister. it seems most likely because if the united kingdom does not want to accept the freedoms we have in the single market, the free , reject thepeople authority of the european court of justice, that would lead to a hard brexit, but it is their decision. in the longomically run that it might the really a problem for the u.k. because it will reduce warned direct investment. we see that already happening, foreign investors going to the continent instead of the u.k..
there will be some shift of financial services. it is bad for the eu, so that's why i regret the result of the therendum, but i think economic cost will be mainly on the u.k. >> greece, the second review of ecb,atest parallele bailout, te germany, how you find consensus? area, 19s the euro countries, and there are some should notut one over interpret, because greece is in the middle of its third adjustment program. esm have dispersed 31 billion euro in the context of this third program, so out of 86
billion, we dispersed 31 billion, so there has been progress. indeed notnt, we are agreeing on everything among institutions with the greek government, but one should not ignore they have come a long way compared to two years ago. cooperation is pretty good. >> we have to take a break. i want to pick up on what the ims role will be going for it. , more from the asian financial form coming up right after this break. ♪
bailout and whether the imf will bailout or participate. we heard also from the finance minister that there must be an alternative if the imf decides to bow out. what would that mean for the european institutions that must then take it on themselves? imfe have worked with the through this crisis for the last six years. we did it very successfully and a number of other cases, andugal, cyprus, where esm imf money went in parallel. now we are on the third package. we have no agreement with the imf. we would like them to participate. my personal preferences that this institution is set up that was agreed at the beginning of the crisis and will continue.
>> do you think the fact that there is an election year in germany that there would need to be approval from the bundestag to give more enforcement to institution such as yours? >> if the fundamentals change in the program and to continue without the imf would be a fundamental change, in the german situation, that requires a vote of the bundestag. >> you don't see greece facing a debt problem for at least a decade, yet one of the preconditions from the imf is a cut. thehat is one of disagreements we have. the debt level in terms of gdp is relatively high for greece, but the debt service payments are low because greece already received a lot of debt relief a few years ago. that is why for the next decade or so they don't have a debt servicing problems.
it's good that we do more when it is needed. is in linet it once with his traditional framework decisions, and that's part of the disagreement we have not been able to solve. >> windy expect to un-freeze the short-term measure? >> they have been unfrozen. they were blocked for a while, but that problem has been sorted out. in january 2017, we are starting to implement the short-term measures. some can be done immediately and quickly. , the rest ofime the year, to be fully implemented. we will start doing that, but need a few more legally important decisions from our board of directors, but i expect that to happen in the next few days. i know it istion,
across the pond, but trump is inaugurated this friday. how does this uncertainty play into what is happening in europe? a global uncertainty. globally, i see this backlash against globalization and cross-border cooperation. the brexit vote was also in that mode. as an economist, i am worried about that because i see very clearly that trade, cross-border cooperation, has helped thisndously to create prosperity of the last few decades, and to move backwards on that i think is not good for the economy. , thank you song much for your time today, the managing director of the european stability mechanism. we will be live today and again tomorrow from the asian financial forum.
>> it is 10:29 a.m. in hong kong. i'm haidi lun with first word headlines. li ka-shing buying duet group for 5.5 billion dollars, subject to regulatory approval, but expected to go ahead by mid-may. it is the latest attempt to bolster his australian business. republican senator rand paul developing his own alternative to obamacare. his legislation would include a provision for inexpensive policies with more restricted coverage.
he told cnn's state of the union, the requirements for procedures drive up costs. the outgoing director of the cia has called donald trump's comments about the u.s. intelligence community outrages. speaking on fox news, john brennan said the president-elect is not have a full understanding of russia's capabilities and intentions. series ofmid a insults and allegations by trump in recent weeks. come to avietnam have tentative agreement on their overlapping claims to the south china sea. the two countries have promised to bridge their maritime differences and safeguard the stability of the area. it comes as vietnam's communist party chief wrapped up a trip to china, where he met with
president xi jinping and the premier. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: this is bloomberg markets: asia p let's get up to speed market wise, japan after machinery orders, surprising to the upside, signs of life in the japanese economy, and ppi desert tha better than expected. here is david ingles. data points to add, overseas remittances from the philippines. the overall picture not happy at all. when you look at this board, stocks go down, dollar-yen , yenaching 114, gold of stronger, risk aversion, flow back into the u.s. dollar, giving you a picture of the lack
of appetite for risk at the moment. gold, back about $1200. if we do manage to finally the break above this key resistance level. 1.42. singaporean dollar, ing out with a note, and a lot of this comes down to a hard brexit and money flowing out of other currencies into the dollar. they are seeing the exchange rate seeing, 1.46 by the end of this quarter. that should be about, just a minute, should be about a 3% decline, or increase in this exchange rate, so it will make that trip. of thelook at this, some bright spots, gold, the mining stocks, two mining stocks on
top, iron ore at the bottom. in china, seven point 7% on top of the gains in gold, which is why we are seeing green right here. let me wrap things up with a look at some of the stock movers across the region. one stock, singapore press holdings, the stock under pressure, big today drop, 3% today. because of the earnings outlook, we now have the possibility of a cut in the dividend. the company is the publisher of the straits times index, wellness one. details.kkr with we saw the stock pop with the announcement in december. there is an offer, then a special dividend if the deal is completed. takata 10%, but looks to be sell
the news. down to this fairly big deal we are following for the company. rishaad: absolutely, and looking tumbling, 9%/dolphins value after announcing it would invest $2.2 billion in the leeco empire. david, how did he win this investment here? essentially, it goes back to an attempted sale. he was running out of money, and one solution was to sell some of the company's property. he went to the company that would have a lot this property, , and after 6-7 hours of conversation and i would assume a bit of drinking, they came up with an idea to throw a lifeline. this mean fordoes
his group of companies here? they were running out of cash. us than simply this is not really a lifeline. 15 sunac is doing is buying billion yen worth of shares, but notas committed verbally, contractually, reinvesting most if not all that money back into the nonlisted parts of his is this. rishaad: right, the thing is which of leeco's businesses will benefit the most here? >> it is hard to say. it could range from his mobile division to his sports divisions, all of whom are behind payment. suppliers have complained they have not been paid for the work. rishaad: thank you very much indeed.
what has been going on in other dealmaking, li ka-shing, $5.5 billion deal to buy duet grew. the utility company agreeing to the takeover after they raised the offer from december. peter williams joins us now. at williams joins us now can it will this deal be approved by shareholders? between structured the a bunch of different assets empire,i ka-shing's infrastructure and power assets. that will be subject to separate votes. it is a consortium of sorts. in terms of shareholders in duet , it seems they are fairly supportive. we spoke to one of the larger
shareholders recently. they like the fact that it is an increased did and a dividend paid out to investors. it seems as though it has a good early reaction. youaad: right, but do expect him to encounter any issues in this takeover? there has been reluctance on certain foreign investments into australia. reason, of course, the why this did came about of was knockedat li back last year when bidding for oz., one of the new south wales , washed on assets national security grounds, and that cause some diplomatic fallout for several weeks afterwards. these assets are seen as less
sensitive to gas and electricity distribution networks. we have already heard from the competition regulator with the thesaction, and it appears foreign investment review board has probably been likely to give the same answer, so it seems on the right track. thank you very much indeed. let's move it to vietnam. we are all over the region today. vietnam's prime minister hoping donald trump will reconsider his .pposition to the tpp >> i have had a meeting with
u.s. business leaders and secretary kerry of the united states, and the message i see is that i believe the new administration of the united reconsider its perspective on the tpp. japan, australia, and new zealand and the remaining members will work together to find a solution and come up with a way to benefit the tpp is notif ratified by the united states. haslinda: donald trump has made .t clear he wants to kill tpp
should that happen even though you are optimistic it could come up in another form, should that inpen, do you see nations asia gravitating towards rcep? member countries are engaging in negotiations, and i'm sure the rcep will be promoted. ,he new members of the cabinet many in favor of the tpp, so i think they might reconsider their decision. what i'd like to stress is that even without the tpp, vietnam will continue to move forward. tpp, we haveo the 12 free-trade agreements in place, so i think this will help our economies continue to be propelled forward. was in this he aided by china. there is a sense that china's
influence and power will increase, is there reason to be concerned about that? we participated in other china initiated programs like the aiib for the maritime silk road. china led initiative, but as long as it benefits all member countries, then it is fine to participate in such agreements. >> how would you describe the relationship between the economic and china? has that changed given the developments of the last few years. >> vietnam and china are neighbor countries. total trade turnover of over $100 billion. i think china needs vietnam, and vietnam needs china. it is a two-way street and economic development. the vietnamese prime
was q3 impact, some of the will be mitigated in q4. we are confident in our q4. rishaad: the german government finding social media networks if they don't make efforts to combat hate speech. it will give companies such as facebook and twitter to respond before they have to pay up. angela merkel sees this move help to counter populist movements gaining support across europe. martin luther king jr. holiday weekend providing contrasting results for two studios. it in first place for a second that after generating $20 million in sales. a different story for paramount. it's $125 million animation itster trucks flopped on
debut, opening in seventh place after making $10.5 million. about the global smartphone market, set to surge 40% by 2030 with the asia region accounting for 30% of that total. this is according to a new report released. our next guest is in singapore, great to joining us. home?is a smart >> it is a home that connects all of your devices, but also meets your needs as a resident dweller. you need to do shopping, watch movies, have security in your home. also you want to make sure people are safe and secure, including your data, so you can imagine a smart home covers all
of these aspects of daily life. you can turn on your lights when you're about to come home, that sort of thing? primarily, the market will be a $400 billion market by 2030, a massive market. currently everyone is looking for an opportunity that will take off after the smartphone has become so pervasive in everyday life. smart home, we talk about six major sectors, the biggest is the one you mentioned, convenience sector, refrigerators, washing machines, but there are other things like home security, energy management, also things like a growing trend around health and wellness, then there as the home media and entertainment sector, so there are many areas in the home that need to be managed,
and essentially a smart home is all of these things. rishaad: indeed, smart homes for different things, for instance in japan, smart homes are different there because of the aging population, so how do they differ from there and a smart home in singapore? is youhat is happening are seeing different markets adopt the smart home in different ways. japan has always been nothing forefront of new technology and the adoption of new technology. you are seeing the growth of connected devices, but more importantly, connected intelligence. lower cost of products that can be used in the home that are connected. seeing the initial push into the home is coming through devices, so amazon at co cho deployedex in the u.s.. products like these tend to be
devices, similar how the smartphone was in 2007, but what made it so interesting and compelling was what was around it. beingngs in japan deployed our product led innovations, but as the market matures and and ecosystem develops, you will see a service driven model that becomes important for success. rishaad: indeed, in the start we were talking about this being $400 billion by 2030. where will the bulk of that growth come from? >> it is a tremendous source of opportunity. a market of $400 billion actually excludes tvs, so the tv market is the largest market billionw, globally $130 $150 billion, smart devices already, but were not talking
about that. we are talking about everything outside tvs. the growth will come in convenience goods, and it is starting in the media and entertainment sectors. artificialtems or intelligence-led hardware solutions that are bought as devices and put in homes, and they are a novelty right now. event in the u.s., people unveiled new products that are interesting hardware solutions, but if you ask the or google home the same question, they come up with different answers. they are not necessarily as robust as natural language capabilities that humans have. that will grow into consumer electronics, refrigerators, microwaves, etc., and it will expand in into
shopping activity ahead of the christmas holiday. footraffic, footfall -- traffic, footfall, stayed up. malcolm scott has details. china's shoppers seem upbeat right now. they don't celebrate christmas, but they might as well. it is a good sign that traffic is on the up. year is coming up at the end of this month, and the numbers from december suggested could be a bright new year for retailers. let's run through some of the numbers we saw from these high-frequency numbers we are increasingly looking at in chinese economy. idu showed foot traffic on the up. we saw a pullback from a record and no camber in online sales.
from decemberyear a year earlier look too good, and consumer sentiment gauges are also faring well in december, people feeling better about their financial situation, and of course car sales holding up, a bright spot throughout the year, and the box office, a big boost to consumers. it boostedall, receipts. rishaad: regime change at the white house, that could engender trait difficulties with protectionism perhaps. can this strength be maintained? numbers go some way showing how resilient the chinese economy is. of course, his campaign
rhetoric. all taken together, these numbers show how important domestic demand are to the economy at the moment, and maybe show the overall in economy and picture is more durable than .any feel rishaad: when will we get a wider picture overall? >> this week we get some investment in retail numbers. gdp held up far better than people thought, 6.7% for the full year. the fourthfor quarter if you believe those numbers. very much.ank you right, ahead, sherry and is going to continue our coverage of today's top stories. what is coming up? are keeping and i on
samsung in korea, expecting to hear from special prosecutors on their decision on whether to seek an arrest warrant for the samsung electronics vice-chairman jay y. lee. this comes after they indicted the national pension chief for some links with samsung as well. bearingbe talking to asset management on the forex markets as we saw the pound fall below that 1.20 level for the first time since october's flash crash. we will also be discussing sunac on "bloomberg markets: asia" ♪
>> it is 11:00 in hong kong. we are in the middle of the asian trading day. ♪ >> theresa may is expected to take a hard line on brexit. the pound falling to levels not seen since 1985. korean prosecutors say they will decide today whether to issue an arrest warrant for the vice-chairman lee jae-yong.
for duet is music to investors' ears. markets in asia, capital flow into the yuan and yen. gold trading above a $1200 per ounce level. gains have been seen for three consecutive weeks. the hang seng index losing almost 1%. you have to keep in mind, we have seen three consecutive weeks of rallies for hong kong shares and mainland capital flowing into the hong kong market as they try to hedge for that depreciating chinese yuan. we're also seeing the japanese yen gaining for the fifth consecutive session. an, a lot ofrean yu
ore,ility there, iron another day of gains. barclays says to keep an eye on it given that we are going to see demand stalling. 5% as we seee than more news of floods in southern thailand affecting plantations. bonds in the region looking like this. yields just rising for the japan two-year. let's get other headlines from across the world with haidi lun. china has urged donald trump to recognize the high sensitivity with regards to taiwan and said the one china policy is nonnegotiable.
donald trump said he would only commit to the policy after assessing the progress beijing makes on currency issues. he says he is not prepared to declare china a currency manipulator. minister isrime holding out hope that donald trump will reconsider his position on the transpacific partnership. he has said he will withdraw once he takes office. recent comments from his cabinet picks have given the prime minister reason to be optimistic. >> the message i see is i believe the new administration of the united states will reconsider the perspective on the tpp and it will also try to achieve a new generation agreement that will benefit all parties. i see that the newly appointed members of the cabinet -- many of them are in favor of the tpp.
i think they might reconsider. and agreement to a $50 billion merger. the largest eyewear maker sells its product through retail chains. shares in the two companies closing higher on friday with luxottica up. expandhing is seeking to energy assets by purchasing duet group for $5.5 million. the deal is expected to go ahead by may. it is the latest attempt to strengthen australian business. global news 24 hours a day power
by more than 2600 journalists and analysts. this is bloomberg. you. ahn: thank south korean prosecutors are set to announce whether they will issue an arrest warrant for afterg heir lee jae-yong delaying a decision over the weekend. he was questioned last week in the undue influence scandal. a highly anticipated decision. the south korean prosecution team decided to delay the decision because of what they called a significant nature of the case. the prosecutors have been reviewing the testimony so far and they are studying prudently-related principles for the case. isn'tg concern here
whether or not he will be arrested, but what allegations will be put forward. prosecutors say the charges could be widened to include allegations of embezzlement and breach of contract. shery ahn: south korea just indicted the chief of the national pension fund. he was suspected of having pushed this controversial merger between samsung and affiliates. reporter: the investigation is into whether or not they made payments to gain the backing in the merger that you mentioned. he has been formally accused today of perjury. he was arrested in december on suspicion that he put pressure on the nps when he was a minister. pensionhe third biggest
fund in the world during the time of the merger. we are waiting for winter the prosecutors will issue those arrest warrants for lee and other executives as the dragnet has been widened related to president park. shery ahn: that merger was huge, making international headlines. a lot to watch out for in the next 2.5 hours as we await the decision. thank you for joining us. sunac haseveloper taken a tumble this morning after announcing it would invest $2.2 billion in a chinese technology tycoon, leeco. reporter: they actually approached sunac to sell property. this is early december.
he got to talking with sunac's chairman and convinced him to throw him a $2.2 billion lifeline. shery ahn: leeco is a holding group for a range of technology companies. what does that mean for gs companies overall? reporter: what they have done is convince the chairman of sunac to purchase his personal shares that he controls. he will then use most if not all of that money to invest in various parts of the nonlisted businesses that he controls. which currently own money to suppliers will hopefully pay their debt and be allowed to expand further. shery ahn: what are those businesses that would benefit?
reporter: it is difficult to say because he has not specified but his empire is very large. everything from bicycles to lobsterses, to organic . that money could go into any number of divisions. shery ahn: thank you for joining sunac. a breakdown of let's get a check on the market. risk across the region. you look at what is happening, right? .here are three market stories one is this move out of risk assets for whatever reason, whether it is renewed concerns over brexit. when you have the benchmark
down, money going back into the u.s. dollar which might actually peak in the next few months. gold back above 1200 for the first time since the other day. let's see if we can break through that level. i want to point out what is happening in chinese commodity prices. you have iron ore, rubber, take your pick. it is unclear why we are seeing iron ore prices jumping in i will not speculate why -- capacity cuts are looming. it sort of makes you think, what else is happening? when you look at it in singapore, that is in u.s. dollars.
barclays says at these levels, it is unsustainable, and you .ill get a slowdown in china copper having a very rational move their of 1%. i forgot to mention rubber. thailand could actually threaten supplies. 20% cut maybe this month. let's have a look at the other market story, the pound. it is down against every one of its peers, whether it is the all the way -- but down, it is even down against the olli rehn. -- against the lira. let's see what happens there. the pound is obviously 1.3% underwater. westpac saying we could be
testing lows. that is the one month that takes you all the way back to three months back. as we count down to the open of markets in london, a bit afraid to see what happens there. as i mentioned, the pound down against every single one of its peers at the moment. shery ahn: thank you so much for that. breaking news in south korea. a south korean paper is reporting that korean prosecutors are seeking an arrest warrant for samsung's lee. we are expecting a decision about lee jae-yong. they are saying that prosecutors are seeking an arrest warrant.
since an electronics right now losing 0.5%. lawmakers questioning the heads over whether they were pressure to give donations to a friend of president park. now we are hearing that they will go ahead with an arrest warrant for lee jae-yong. this is something to keep an eye on because samsung is going through a generational leadership change and this could ,ean more changes for samsung south korea's biggest conglomerate in the heaviest-weighted stock. we will have more. still ahead, no negotiations on taiwan. we will look at china's latest message for donald trump. next, hard brexit means hard days for the pound.
k.ery ahn: welcome bac we have been looking at the geopolitical issues weighing on the markets this morning. with donald johnson inauguration told they arewere still factoring in rate rises in 2017. >> we will probably get two or three rate hikes from the fed this year. that would be consistent with an improving outlook. they're stoned is to be a little bit more caution because you do still have inflationary -- that is not rising as much as it was in the past.
shery ahn: prime minister theresa may will signal plans to quit the eu market, sending the for the first20 time since october. parity could be on the cards . concentrations a and export-oriented companies. they have been hitting success of highs and that will probably continue as a consequence. nonetheless, our forecast is not unlikely. we could be looking at parity in the not too distant future if the worst fears are realized. shery ahn: the asian financial form, the u.k. is set to be the big economic loser from brexit but the eu will also pay a price. >> economically, in the long
run, it might be a problem for the u.k. because it will reduce foreign-direct investment. we already see that happening on the continent. politically, it is very bad for the eu. i regret, like most people, regret the referendum. poundahn: for more on the as well as other currencies, let's bring in the head of -- thank you so much for coming in. it is great to see you. do you expect the u.k. to make a clean break? guest: i think they have no choice. i think the eu would not give them any leeway because if you give the u.k. leeway, maybe some
other rebel nations may decide to take advantage of that into the same. i think the eu wants to teach the u.k. a lesson. shery ahn: to show everybody else what could happen. case, it ishe inevitable that we are going to see parity? guest: i do nothing so. the u.k. is obviously trying to find other trading partners, and get closer to the united states. in the new world order, the united states will find new friends and new enemies. the u.k. is trying to come closer to the u.s. and the u.s. is -- poundk that parity on the is too pessimistic. shery ahn: we're talking about
sterling. guest: yes, pound sterling. hold some u.k.we equities but we have a currency hedge against us. forecast, we are not thinking of parity. shery ahn: we have heard it will not be easy on europe either. what happens to the euro? guest: the euro does export quite a bit of goods and services. it all depends in the new world order whether europe is going to be a friend of the u.s. or not. it is more complicated than just europe and the u.k. shery ahn: we saw some correction in the u.s. dollar last week. are you still expecting more of
the correction to happen before significant strength in the dollar again? guest: the positioning was so long that when they do not get , they had to square off their positions a bit. the weakness is more squaring positions, but the interference in the u.s. dollar is still going to be up in the next few months. shery ahn: does this mean that the japanese yen will also see some weakness? right now, we are continuing to see this run-up to the japanese yen. guest: this is also part of that correction. i do expect the yen to weaken again. that is up to the boj and the japanese government. they will be happy with that. shery ahn: they are already seeing it in some of their data from the end of last year.
order to diversify from real estate and looking to lease his internet finance unit. now a check on shares in takata, trading down 10% after bids outnumbered sales on friday. the airbag maker agreed to pay $1 billion to settle a criminal investigation into product faughts linked -- product ults. nintendo is looking like this, down 2.7% in tokyo after shares tumbled on friday following the release of details about the latest gaming console. the switch disappointed investors with a higher than expected price tag, making it more expensive than rival devices. they are not convinced it would replicate the success of the wii.
li ka-shing has agreed to purchase do a group in a $5.5 billion deal. the board agreed to the takeover after cheung kong infrastructure raised the offering. let's get more from sydney. how is the deal structured and will it be approved by shareholders? therter: four cheung kong deal is complex, and likely to be split among three companies. it's going to be different votes for different parts of the deal. for cheung kong, it offers a bit of diversification away from europe and into australian assets including a pipeline in western australia. it herempler for do
devoted -- it is simpler for duet. we have spoken to one of the larger shareholders and they liked the increase in the bid. it is popular with some of the larger shareholders and popular with the market. 5% right now. shery ahn: briefly, do you expect li to encounter any foreign investment issues with the takeover? reporter: not this time. there was the ausgrid story last year. has indicatedccc that he has no problem with the bid and analysts say the foreign investment review board will
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download the xfinity tv app today. ♪ it is 11:29 a.m. in hong kong, 1229 p.m. in tokyo, i am haidi lun with the latest first word headlines. south korean media outlets are reporting that prosecutors will seek an arrest warrant for jay y. lee. an official decision is expected to be announced today after being delayed over the weekend and comes after investigators quiz jay y. lee for 22 hours as a suspect. the country's national pension chief has become the latest public figure to be indicted by prosecutors. as much as oneng
point 6% before trimming losses on reports that theresa may will signal intentions for a hard brexit during a speech in london on tuesday. the sunday times believes the u.k. prime minister will say she is willing to quit the eu single market in order to take control of borders and laws. of the ciag director has called donald trump's comments about the u.s. intelligence community outrages. news, john fox brennan suggested the president-elect does not have a full understanding of russia's capabilities or intentions. the comments, admitted escalating tensions following insults on allegations by trump in recent weeks. outhe may step in to help its banks struggling to deal with bad loans. is likelye ministry to finalize a capital infusion plan for its state run lenders this week. the report says the government could offer more than $3.5
billion in assistance, which should be announced as part of the budget on february 1. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. shery: thank you. seeing the regional benchmark falling .4% after three consecutive weeks of gains. let's go to david in glass for a breakdown of markets here in asia. ingles for a breakdown of markets here in asia. a decentere has been rally, renewed concerns over brexit. we are looking at sharp declines, especially now at session lows. china and japan and hong kong down 1%. i'm looking at that 22,700, taking us back to a week ago.
composite, 1.5%. since ween a while have seen declines of that magnitude. we are getting word, not a lot of details, from regulators they are looking to reform the index and put in some startups here. , 1866ndex down 34 points takes you back to september 2016. ok, let's look at southeast asia. now, the reason i bring up southeast asia is despite the gloom and doom we are seeing today, and yes, we are seeing some indices get sold off, it has been one of the bright spots so far. it is one of the two best-performing markets in asia, singapore and philippines.
chances are we will get a better outlook. day, but down shares up 1.5%. since --es, remitted remitted since -- remitted since is we are pushing towards 1.2%. south korean won, we went to 1200, come back down to 1180, go long on dollar-won. gains are expected to fade for the south korean currency. we have been talking about samsung. the singaporean dollar, 1.43,
ing, the end of the first quarter, looking at 1.46. the takes you back to global financial crisis, so that is a dollar move higher, and the philippines out with remittances today. looking for an increase of 8% roughly. shery: thank you. beijing has warned trump not to question its claim to taiwan, saying it's one china policy is not negotiable. this comes a day after the president-elect hinted at a major reset of u.s.-china relations. details,nzie has the so another round of sparring between china and trump. tom: that's right. the latest war of words, this one triggered by this interview trump gave to the wall street
journal on friday, in which he refused to commit to the one china policy, saying he will wait to see what progress china made on trade and its currency. of course, this comes after the phone call he took from the president of taiwan on december 2, when he won the presidential contest. that was a protocol-breaking phone call that smash four decades of diplomatic agreement, fromhat caused a response the foreign ministry to this latest comment from trump, and they said this policy is a political foundation of u.s.-china ties and that it is nonnegotiable. we heard robust words from state media, china daily saying these and his show trump comments were not a miscalculation, but wishful thinking, and china may be forced to take off the gloves once he gets into power if he continues this kind of talk.
shery: this is only one of the issues between the two sides. what are the other areas of contention between trump and china? trade is number one, trump trying to link that to geopolitical issues as well as taiwan and the south china sea. as we heard from rex tillerson last week, saying he would try to block china from access to the south china sea islands, comparing their actions to russia's annexation of crimea, and that prompted a furious response from state media here, the global time saying that if washington was to act on blocking china from the south china sea, that it might result in war. korea, trump has said that is an area where he would like to see china make more progress, saying they have not done enough to rein in pyongyang's nuclear ambitions. he did offer something of an
olive branch to beijing, saying he was not going to be labeling china a currency manipulator on day one of his job, that he would wait to speak to his counterparts in beijing before making an assessment and call on that particular label. thank you. tom mackenzie joining us from beijing. vietnam is still holding out hope that the transpacific partnership will come together, even though donald trump has vowed to withdraw from it on his first day in office. the trade deal would be a boost to vietnam's economy. i see isssage that that i believe the new administration of the united states will reconsider its perspective on the tpp, and it will also try to achieve a new generation agreement that will benefit all parties concerned. >> i see the newly appointed members of the, many of them are
in favor of the tpp, so i think they might reconsider the decision. haslinda amin spoke exclusively with vietnam's prime minister, a great interview, by the way. tell us why he is so optimistic? vietnam is optimistic simply because of the views expressed by trump's team, those who will be taking key positions it hasmp's government, led to the prime minister to believe that tpp is not that yet. clear to say was that he isn't opposed to tpp, even though he does share some of trump's concerns. commitment from other tpp member economies, that remains strong. the australian prime minister made it crystal clear he is still in, the same thing for the japanese prime minister.
with or without the u.s., vietnam will propel its economy forward and ensure other trade deals will be pushed through. take a listen. tpp,en without they vietnam will continue to move forward, because in addition to the tpp, 12 free-trade agreements, three under negotiation, including the rcep, so this will help our economy's to continue to be propel forward. haslinda: to be sure, tpp is not to boost trade, it is a way for vietnam to be independent from china, currently its biggest trading partner, $17 billion in bilateral trade last year alone. shery: in the region, we do have territorial disputes. vietnam has been entangled with china over claims in the south china sea, so any development ahead of trump's inauguration on that front? haslinda: it does look like both
countries want to convert tensions, which peaked in 2014. over the weekend, both sides issued statement suggesting they will take action to ensure stability in the south china sea. one news agency suggested that they will avoid any action that will complicate the situation. this is quite evident from the visit and talks of the vietnam's communist party chief with xi jinping and the premier over the weekend. they said they will seek long-term solutions and discuss transitional solutions as well. the two have a pretty complex relationship, clashing several times, including a bloody war in 1979. it does look like both want to over such a scenario again. you so much for that. haslinda amin breaking down her explosive interview with vietnam's prime minister. foes, and friends,
shery: welcome back. a quick check of the business flash headlines. is seeking to diversify beyond real estate and is looking at technology, finance, and health resources for growth. billion taking a $2.2 tech companies affiliated with the leeco empire. the chairman says the company sees real estate gross stagnating from 2026 onwards. sys says rising global uncertainties are putting pressure on prices.
it comes as the company and rivals continue to slash costs and invest in cloud computing. the ceo remains upbeat. we have had significant large deal even send the last several quarters. i am confident. as they ramp up, they will contribute to that revenue. be not beat will there anymore in q4, some of that risk. so we are confident for q4. shery: we are back now. great to keep talking to you, especially as you don't like to go into politics, but we have to talk about what you call the new world order. we see president-elect on calling nato obsolete.
we see this new world order. tweeting new world order. i'm not sure once they sit down around the table and discuss whether he can continue to make these kinds of statements, so this is a pre-inauguration mr. trump, but i'm not sure he will be the same one after that. rishaad: you would think that he would change already, reverting to some sort of normalcy? >> if he was going to revert in the future, he is not right now. >> i think he will change though . i think he would change a bit. rishaad: you sound like the father of an errant child. [laughter] >> i think he will have to really. the around him, they will say we are going to make the statements publicly. he does not have full control of the senate.
he still needs a few seats in the senate in order to implement a number of policies like cutting corporate tax or increasing government spending. he needs those votes, so i think his people will tell him that you can continue to tweet, but when you speak publicly, can you cool down a little bit. is said about the eu and nato, marking a turn towards geopolitical risks to moving from monetary to fiscal policy, more deflation, inflation, and on top of that, other changes possibly as well, so these are changing times. are we returning back to normal? the last eight years have been pretty different. >> yes, indeed. of last year,le we are returning to normal in the u.s. already.
we sell wages starting to rise in the u.s. labor costs are rising in the u.s.. ,he bond yield will bottom out then continue to rise after the u.s. election, so we definitely are going into what economists like to call the late stage of the normal business cycle in the u.s. especially. other economies will come later. some synchronization on the global framework when it comes to returning to normal, but protectionism perhaps as a risk? protectionism is as bad as it was announced pre-election, then it will be really bad. a 45% tariff hike on chinese goods,and 35% on mexican would be absolutely disastrous. it would not just impact on mexico and china, but the rest of the emerging world.
>> the supply chain. >> exactly. in the worst-case scenario, it would be very bad. i hope it won't come to that. >> what if it does? with someone at a conference who said let them have trade wars because it gives an opportunity for china to , let'sstart reforming start doing some structural reforms in china and force them to do good long-term structurally. >> they have. >> is it enough? an you are hit with 45% tariff i, it is never enough. hike, it is never enough. on,lanka, pakistan on, so so the rest of asia has
benefited from china being the multinational corporation. they have already done that. obviouslyina should continue to reform. they already have reforms in the steel industry. more than 10% has been shut down. the same goes for cement and is going on china with a quiet reform and revolution concerning excess capacity industries. it is doing the right thing. week, theinum, last u.s. filed a complaint with the wto regarding anti-dumping situations. do you see more tip for tat coming? >> i'm sure there will be. we will talk a lot more about these trade frictions and so on, the thing that mr.
jack ma did with alibaba, that was quite clever. he said i have a lot of people working for me and china, but people working in the u.s. as well, so why do we grow together. one million jobs, how realistic is that? >> i think that what it comes down to in the end is for mr. trump and the republicans to be able to show they can grow more jobs in middle america. with stealing commodities, how worried are you that we will see a huge correction of higher commodity prices given the run-up last cutting mostly based on the supply side, but demand is still faltering? in chinamand for steel is quite strong, because the infrastructure programs are still going on and quite strong, inner-citys, all the
logistic developments, and not only that, but the u.s. also has run into some shortage of steel production as well. a lot of excess capacity was with demand,d so there is a mad rush for orders. that's why i think around the world you see inventories being built up everywhere. the export numbers from many countries actually look great, and the pmi numbers look great, because everyone is trying to reorder at the same time, so i'm not saying there is a big boom and economic growth around the a bit of is just synchronized recovery and everyone is rushing to buy something. >> it is always great to see you. bearing asset management explaining to us the new world
shery: the pound is taking a beating as investors fear u.k. prime minister theresa may will push for a hard brexit during a speech in london on tuesday, while some are worried about the the director eu, for the european stability mechanism says he is still optimistic. is justified, but some of it ignores the positive things in europe. uncertainty, brexit is
one, although economically, mainly a burden for the u.k. some elections in the biggest member states of the eu, but elections are not necessarily bad. they add to the uncertainty, that is correct, but for instance, what i see in germany and france happening, of course we never know until it happens, but the most likely scenario is we will get a reform-minded government in france, and in germany, very likely a continuation. uncertainty, yes, but not necessarily something that ins up in a problem. also, people ignore some very positive developments in europe. growth has been above potential for three years, and the headline growth may always look low, but when you take into account demographic trends in europe the which are poor, on a per capita basis, growth in europe is like in the united states.
even higher. also, let me add that it is not widely recognized, income distribution is better than europe -- in europe than anywhere else in the world. even when growth rates are low, in europe, 80% of households have seen real income growth for the last decade. in the u.s., that is only 10-20%. >> how much of a factor is a hard brexit as theresa may says, how much of a factor is that to the european union? no longer part of the common market or be part of the common market. is this better that they have a hard brexit rather than a slow one? >> it is up to the british government to decide what to do. it looks like it may be a hard brexit, but we are waiting for clarity from the prime minister.
it seems most likely because if the united kingdom does not want to accept the freedoms that we have in the single market, the movement of people, if they reject the authority of the european court of justice, that would then lead to a hard brexit, but it is their decision . economically, in the long run, i think it might be really a problem for the u.k. because it will reduce foreign direct investment. we see that already happening, foreign investors go to the continent instead of the u.k. or shifts in theme financial services. politically, it is bad for the eu, that's why i regret like most people in the european union regret the result of the referendum, but the economic outcome will be mainly on the u.k. shery: that is it for this edition of "bloomberg markets: asia".
♪ ausef: the pound takes beating as theresa may signals a hard line on brexit. korean prosecutors promised to announce their decision on the samsung's vice-chairman jay y. lee. he could be facing arrest. yousef: dismissing the eu and calling it obsolete, donald trump shakes the foundations of transatlantic relations. shery: it t