tv Bloomberg Markets Asia Bloomberg January 16, 2017 10:00pm-11:01pm EST
leader.g the notets across asia, we are getting direction from the u.s.. they are closed on the holiday. everybody is looking ahead at theresa may's speech later this evening. people say we are probably going to get more confirmation of a hard brexit. that, thisf continues to be the case in asia, seeing the dollar rallying again. the japanese yen crowded, and on the back of that, emerging-market currencies losing ground. 0.1%,ilippine peso down gaining ground .1% at the moment . the south korean kospi rallied a percent after samsung, the heaviest weighted stock, gains 2% despite the possibility
bet vice-chairman could arrested. not surprising, given that in south korea, we have seen other executives of conglomerates accused of bribery and corruption. ,lso, coming back to companies leading their companies again. investors are taking that with a grain of salt and looking at their latest profits. samsung has done pretty well. doing a commodities -- commodities as well in asia, the --kei leading declines in nickel leading declines in ofals as concerns come out indonesia as they increase output. iron ore up 1%, people asking themselves, what's going on with iron ore prices? we thought it was a supply side thing. it keeps getting flooded. iron ore prices continue to rise, and the rally on the metal, passing that 70 level.
looking mixed, but the two-year in japan and australia, losing a bit of ground with yields gaining in japan .6 basis points. let's get to haidi lun. japanese prime minister shinzo abe urges asian nations tpp as early as possible. donald trump campaigned on opposition to the tpp, but speaking in high noise, -- speaking in hanoi, abe supported the partnership. >> it is the foundation going forward. i should like to strike towards greater high quality and ambitious agreement. >> japan would like to be the standard bearer for the free trade regime at all times. the imf raised its gdp
forecast for some of the world's biggest economies. it maintains global growth outlooks at 3.4%. the organization growing at 6.5% up from an earlier prediction of 6.2%. the united states raises 2.3% on an unexpected boost from donald trump's policy. the u.k. forecast to increase to 1.5%. pace inat the slowest five years, despite record imports by china. prioritizing cash flow over volume. in thets jumped 8% fourth quarter. forecast to remain in line with estimates. extending gains in 2017. they searched last year. upgraded its rating on the indonesian stock market after jakarta cut business ties
with the bank. they downgraded indonesian equities by two notches. after the government responded, the two neutral, saying the volatility following trump's victory should subside. day,l news, 24 hours per in more than 120 countries. this is bloomberg. is set toresa may announce that the u.k. will pull out of the eu single market when she sets out her brexit plans on tuesday. the british prime minister will say she has no interest in a approach.alf-out most likely a hard brexit? >> that seems to be on the cards. theresa may kept those types of details close to her chest, but there were extracts -- excerpts
of her speech provided. one excerpt from the speech that you be delivered today, the cable seagate new and equal partnership between a new self-governing global britain and our friends and allies in the eu. we do not seek to adopt a model adopted by other countries or hold onto bits of membership as we leave. she is expected to signal plans to abandon the signal -- the single market and seek a new theing relationship with eu. the u.k. cannot secure free-trade deals with other countries. ed as her final plan. she will announce 12 key objectives, likely to include gaining control of immigration, restoring power over lawmaking to parliament, and taking the u.k. out of the jurisdiction of european courts. immigration was a critical issue
for brexit voters and without the free movement of people from the eu, that u.k. and be a part of the single market. worried.vestors are one of the uncertainties for the -- what are the uncertainties? >> details are still scant with the march deadline that may set in place regarding triggering formal talks with the eu. it remains to see what the transition will entail for business groups who are hoping for closer ties with the eu to remain, specifically banks that might be disappointed by that exit from the single market. we may see a shift of jobs and operations to london. one uncertainty was addressed by the bank of england governor regarding business investment. >> we are in a situation right now where, for understandable reasons, visit this -- business investment has been dampened by
because, theret is access to finance that there is uncertainty about ultimately, what our relationship is going to be with our largest trading partner, and that is weighing on business investments. >> he touched on how the bank of england's outlook for 2017 depends on britain's new deal with the eu. we have seen volatility in the u.k. financial markets. the pound briefly dropped belowght below one cup -- 1:20. traders are bracing themselves for what may might deliver today. everybody will be looking forward to that. sophie, thanks for joining us. are talking about global risk on bloomberg television. thomas told us, they are not expecting a clash in europe. actually, the other way around way around.her
>> we see growth rebounding in europe, and not only in europe, but in the u.k. confidence has been stronger than what we could've expected after the brexit vote. we are not in that crash type of scenario. a ramp up ofn will notowth, which exceed a long-term average, but will be slightly better than last year, and should benefit all the countries. shery: as the world counts down to donald trump's inauguration, the u.s. chamber of commerce talks about trade growth for the president's agenda. >> he has talked about the importance of trade deals around the world. what we need to do his work with him on a coherent, cohesive policy. the united states can't afford to retreat. 95% of the world market is
outside of the u.s. we need to sell to it and show leadership. we need to work with president trump in establishing how we can grow the economy domestically, but we have to do that with the trade agenda that keeps our borders open, that ensures that we are trading around the world, and that we are helping set the rules. comes to china, s&p says the pboc is faced with uncomfortable choices as it rattles pressure on its reserves -- battles pressure on its reserves. xp want stability. they have 3 trillion and reserves, although they used to have 4.2. if they tighten the controls, they will never get to the point where the you want is seen as a global reserve currency. they will have to make an isfortable -- the yu seen as a global reserve currency. they will have to make uncomfortable choices. >> xi jinping steps into the
spotlight when he addresses the world economic forum. he will be the first chinese head of state to address the gathering. great to see you again. xi jinping trying to frame himself as a championship -- as a champion of free trade. >> this is significant. time when the rhetoric coming out of the u.s. has changed sharply, with trump preaching trade tariffs. here, we have xi jinping bringing the biggest chinese allegation to davos. issues like globalization, and have plain sailing. there is skepticism around trading policy. you have to think, you have to have a pretty willing audience willing to listen to the message of trade and doctors and -- and
opportunity versus trumps isolationism. this is days ahead of the trump inauguration. >> the timing couldn't be a greater contrast. he is expected to say, there are opportunities in china and we will see more trade and growth. -- push back against the narrative of protectionism. in the past, chinese leaders used that house as a forum to preach china's role in the world. in 2008 during the financial crisis, the prime year said, -- the premier said, we are here. shery: trump has been threatening tariffs on china for white some time. how likely is it that he will go through with that, and we could see a trade war? he has been consistent on his china criticism since the election. he has appointed china talks to his tea -- hawks to his team.
he continues his rhetoric about tariffs and accusing china of deliberately devaluing its currency. i think we are a long ways from a trade war. at the same time, there is growing nervousness around what actions trump might take, not just how that might hurt china, but if he goes into sectors in other supply chains, like electronics in korea or taiwan, it become -- may become more than just a china story. ery: chinese media has been retaliating a bit, bit by bit, on their remarks. thank you for joining us. expectest on what to from davos and president xi jinping's remarks.
the markets are busy. latera may makes a speech today. david is watching the market. david: those are the remarks that matter. obviously, discount the importance of what the chinese butident will say in davos, when you talk about the markets, the speech from to reason they front and center when she does try to inform the idea of what it will look like. have a look at asia. the five-day chart, asia-pacific equity index here, to get some scope here, 139 is the five-day chart. the have come up for three state days and a higher for the week. volumes are not there. 142 was the high. last year, 112 was the low. we started off the year at 135. have a look across assets, this gives you a sense of what markets are doing at the moment, because if you take japan out of
the mix, which is getting weighed on by the japanese yen, it is not as bad. most stocks are down, but samsung is lifting the tide. at the pound, it is not so much a question of whether there is downside. it is how much downside there is. we are at 118, and that is sort of going to be the floor, dependent on what the speech is going to say. the risk or the downside from that is really, if it is a thanr town -- tone projected. this gives you a sense of the risk. when you look at the bloomberg dollar index, nothing is happening, flat across the currency markets except for the south korean wons. thanks so much. still ahead, as korean ofsecutors seek the arrest
♪ president xie jinping steps into the spotlight on tuesday when he did -- when he addresses the economic forum. , mark is our head of equities asia. let's start with xi and davos. this comes when we are seeing protectionist rhetoric from the u.s. how far can xi jinping go in stepping in and filling the void left from trump? is, i think we have to interpret trump is a dealmaker. they are starting out with aggressive statements to do a
deal. you don't start in soft places, you start in hard places. understands there are deals to be made. i think it will transform the nature of davos. like, been, the quote i where billionaires tell millionaires what the middle class are thinking. it is been a closed talking shop. be at theit will center of global position. i think will be interesting. shery: you mentioned the nature of davos, i read an interesting piece about how davos is out of touch with reality and the world order. not predict brexit. they could not predict donald trump. , andlectuals gather again do they have it wrong in understanding the world order now? mark: what has happened over the last year is, what is now being referred to as populism is a rejection of those policies,
where they would all agree, generally, what great fellows they were and they were saving the world and everything would be marvelous. what we have seen is, votes from people saying, we don't support your views. had a terrible year. have aer thing is, they big group think. last year, at this time, at davos everybody was saying china was going to collapse and the rmb was going down. you should sell everything. they tend to get caught up with in the markets themselves. the markets believed what was coming out of the hedge funds attending davos. ais year, there is hopefully bit more humility and hopefully, more recognition that the world is moving in a different direction from their cozy little bubble and hopefully they will engage more with that. lead of the second largest country in the world, in a strong position himself,
coming there and saying this is what china thinks, that will shake it up. 2017, in you think your notes, i can see we will move away from bureaucrats, more market focused. we will also be taking over from lawyers and dealmakers. explain that. the world has been run by an increasing layer of bureaucracy and regulation. theeveryone law passed in u.s. under obama, there have been 35 regulations put in place. there have been a lot of executive level regulations on top of existing laws. the same thing happened in the u.k., where parliaments doesn't make laws anymore. bureaucratic bodies impose regulation. that doesn't work with the anglo-saxon model. the voters have rejected that layer of bureaucracy, and look who trump, who is a dealmaker and a markets man, has brought in. he brought in businessmen and
dealmakers. i get a sense that there is a push, that lawyers are having to , they are getting pushed back by businessmen and the dealmakers. as an investor, that creates a different world where we have to start to challenge what we think are the business models. if you have a business model that is great because you have a regulation behind it, suddenly that gets replaced by a dealmaker. you have to reassess. we will continue the conversation on trump and brexit. stick around. mark, thank you. coming up, vietnam's economy. an interview with the prime minister. this is bloomberg. ♪
this year. there plans to open the economy, but the country faces big challenges. >> after 30 years of reform, the vietnamese government and vietnam have achieved a lot of accomplishments. however, we are still faced with many challenges, namely that our economy remains quite small in terms of scale. macroeconomic stability and the restructuring of the economy are still making slow progress. productivity loaf -- low productivity, it income issues of people, and outstanding issues that lay out the goals and mandates for the government at this time. that requires us to improve the restructuring of the economy at all sectors. we need to also reduce corruption and develop a strong force of officials who are able to better integrate the
vietnamese economy into the world and implement commitments vietnam has made in all the fda's we have signed. >> it is a challenging environment. what would you say are the prospects for growth for vietnam this year, next year, given the slowdown in the global economy? >> the economic growth of 6.7% this year and then, even higher growth rate for the years to come, so that we would be able to achieve an average growth rate of 7% for five years. see some, we sentiment, and also a tendency of protectionism around the world. that is not the major trend. i believe the main trend and tendency is still economic in thision, especially
region. that also includes the united states. that is why vietnam aims to capitalize on the tendency to ensure our economic expansion. haslinda: are you concerned about the rising anti-globalization sentiment, which has derailed the tpp? >> there are reasons why i am not too much concerned about protectionism. because we have a growing business community. it is reaching one million enterprises in 2020. our people are dynamic. they love doing business. we also have 20,000, over 20,000 projects to be implemented with total capital of $300 billion in u.s. dollars. voting in an independent economy is not against global trade. shery: the anon's prime minister
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download the xfinity tv app today. ♪ it is 11:29 a.m. in hong kong, 3:29 p.m. in london. theresa may set to announce that u.k. will pull out of the eu single market when she sets out her brexit plan on tuesday. she will say she has no interest in a half in, half out approach. the pound has fallen to its lowest since october/crash. jinpingpresident xi steps into the spotlight at dave tuesday, expected to
in thee largest polluter fight against global warming. shunned said to have the conference because it betrays his movement. haveberg television will special coverage of the asian economic form and davos, including a panel on the future of finance. that is coming up at 3:30 p.m. this afternoon in hong kong. on wednesday, a discussion on the crisis of the middle class. francine lacqua hosts christine lagarde and others. we will bring you those live and in full on bloomberg television on radio. donald has met martin luther king the third to discuss what he describes as america's broken voting system.
he says the talks on holiday honoring his father focused on voting rights. of democratsber will boycott the trump inauguration after the president-elect criticized john lewis. 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. asia's regional benchmark is continuing to fall for a third session, but individual markets trading all over the place. korea, let's get david ingles to break this down for us. david, what is going on? david: right. to your point, it is not consistent. it is one of those days where you take the eco-data and throw it out the window. there is a risk to smaller
markets, southeast asia index there, .1%. south korea lifted by samsung. australia,ets like the biggest the klein in about five weeks, basically erasing its 2017 gains yesterday, falling below 5700, the laggard today. -- wepanese yen strong will get you that in a moment, but weighing on the nikkei 225. we look across the currency markets, dollar-yen, 113, so hovering around these levels. it is range found today. it started to pick up slightly, but it speaks volumes when the vietnamese dong this
one of the stronger currencies today. we are moving into the middle of the trading session and asia, the lira weakening. we see a lot of weakness in the currency. pound sterling holding steady ahead of the speech, some at in cash, apboc spike and money market rates. let me wrap things up with a look at volatility in pounds sterling, creeping up, up for a second straight day, which takes is closer, not quite at that extent, there is your brexit. that is where we are at the moment. markets are betting that this calm when not continue. shery: thank you. more and more uncertainty. we do have some interesting forecasts from the imf.
it has raised its economic outlook for some of the world's biggest economies. ramy inocencio has the details from new york. its: the imf has released quarterly update, and the good news is that it is raising its 2017 growth forecast for the u.s., china, and the u.k. when it comes to the world's biggest economy and a donald trump white house, caution is in the air. global outlook, keeping its growth forecast unchanged since the update in 3.6%er, 3.4% for 2017, and for 2718, but a revision with u.s..s., 2.3 for the in 2018, that rises. the chief economist from the imf explained the reasons and the
risks. take a listen. u.s. can expect the new administration with congress will bring in tax reform, some lowering of tax rates. stimulus, andart some of that will flow to the rest of the world. one risk we worry about is that the stimulus will be so great that the fed will have to raise interest rates rapidly, beating to a very, very strong dollar. the stronger dollar could have negative impacts, raising borrowing costs and emerging-market countries with dollar denominated debt. for china, the imf raised guidance, but kept 2018 unchanged. 6.5% for 2017, up from 6.2%. there is expectation for government stimulus to keep the country stable ahead of the communist party leadership
meeting, where president xi jinping as expected to consolidate his power. china has been slow to address asing corporate debt at 163%, level that has triggered financial crises in other countries. for the u.k., the imf raises its forecast to 1.5% up from 1.1%, reversing a cutback in october. for 2018, it has revised down its growth forecast to 1.4% from 1.7%. the imf releases its next quarterly update in april with clarification on the u.s. and the u.k., following donald trump's 100 days in office, and when theresa may speaks this tuesday am aware she is expected to advocate for a hard and clean brexit. a succession plan at
samsung is in disarray as prosecutors seek a warrant to arrest jay y. lee on allegations, including bribery and embezzling. we have been tracking the developments. getces are there he could arrested if the court approves the arrest warrant, that my question would be, does it even matter? ofth korea has a history executives convicted coming back to lead companies, even from jail. leaders have a history, a very long history of calling the shots from behind bars. this could be the case with jay y. lee if he is arrested. right now, the chances of being arrested are fairly high given the fact that there is a perjury charge against him, which means prosecutors believe he has lied
in the course of the investigation and maybe destroyed evidence to hamper the investigation, which is offering a good argument to have him arrested. shery: who will take over some sun if lee is arrested? would it be an inside executive of samsung? or would it just be within the family again? there is a lot of speculation about who would run the company. the daily operations have been run by executives. the people behind the rise of the company, the electronics division, so it is possible that these people will isbably step in if lee arrested or put behind bars, but there is also the possibility that someone within the family, like the sister, may step in temporarily, because it she has
a lot of experience in electronics division. be huge, a would seismic shift for south korea, where it is known for these patriarchal empires that are run in these conglomerates. >> that's right. to be a competent executive, running a hotel chain, but the thing is that there might be a public backlash if that happened, because there is a lot of public criticism and anger about families rising -- running business empires. in the case of the sister, she has proven to be competent, so we will have to see eventually what happens. shery: thank you so much for joining us on the latest from some sun. -- samsung. bloomberg is being told that tata sons wants to boost its
stake to protect it from takeovers. companiesmore with that tata sons is looking to boost its stakes. >> tata sons is looking at boosting stake in key listed power, steel,a motors, and chemicals. chairmanis is when the takes charge . month -- next month. what will be his challenges as they overcome this leadership struggle? >> the priorities for the new , to restore faith among
investors, but one key companies with the listed under tata sons. it was almost explicitly said that it may damage the brand if they lose control, so they would want to take key listed companies to avoid any potential takeover threats. shery: thank you so much for joining us from mumbai with the latest on tata sons. up, biting the brexit bullet, theresa may's plan to leave the eu single market. this is bloomberg. ♪
this is "bloomberg markets: asia". business flash headlines, cathay pacific shares rising after announced plans to shorten its readhedging program and brand its workforce. the kerry saying it won't hedge feel bets as it has in the past after losing more than $1 billion in the last three years. staff andlso reassign has not ruled out redundancies. reassure beijing that foxconn remains committed to china as it expands its u.s. operations. a high-ranking chinese official expressed concern to gou about the iphone makers american plans. trump has singled out
apple as a country that should manufacture in the u.s. gou declined an invitation to trump's inauguration. pointed a group president and ceo. he says he is delighted to be part of baidu's evolution. he has a phd in computer science and holds 48 u.s. patents. an search giant has set up augmented reality lab in beijing as it seeks to head off rivals and new forms of advertising. welcome back. are our guests. ands focus now on trump what happens after the inauguration after january 20. we have u.k. triggering article
50, brexit speech today from theresa may, what should investors be looking at? >> most international investors are underweight europe as a because of the whole of election cycle coming up with the french elections, german elections, and speculation about where anyone else leave the european union and so on. i think they have learned from if you position to aggressively a head of uncertainties, it can be very painful. fx guys do all the front running. theaw this with trump when trump play was on the mexican peso, brexit about sterling, and this idea that hard brexit mean sterling must go down, that is what the fx guys say.
we had a long time where has stabilized, and now this clean brexit that theresa may is emphasizing, this , and some people not wanting to change at all. and so both the trump and with the u.k., i think it will be focused on trade. what is the deal that will be done on trade. rishaad: some of this will be political grandstanding. you have to be there as far to the right as you can, but we discussed think it before, it presents a massive opportunity for britain actually. tother there is a vision actually promulgate that idea. listen to what the people in charge of the brexit negotiations from the uk side
say, about being more open to trade. finance the hungarian minister said europe has more to lose than britain does. >> the point is that it is a astoms union, and within customs union there are no trade barriers, but there was a war against the other 6.5 billion people in the world. all the opportunities outside the customs union, the investor waiting for more detail, rather than trying to rush to one side or the other. the macro guys will play the currency. >> if you're right, donald trump hinting at the u.s.-u.k. trade could come up, the deal faster than expected. obama came over and said if you don't vote the way david cameron wants you to vote and stay in the eu, you will be at the back of the line. donald trump said maybe you
won't. and europe could be the equivalent of china in the first quarter. >> this time year ago, going into davos, china was going to collapse, iron or, every single one of those china traits has gone horribly wrong for the davos men. i don't want to be a deliberate no international investors wants to be exposed to europe at all, so one of the things we are saying is what policies do you think will come out of a candidate who will win in france or germany. sophie: what do you see their? the fringe candidates seem to be supply-side reform, a positive potential realm. when we look at the company , that ise companies
positive for the trade side of that. if you can reduce regulation him a particular labor laws in say a, then you start to little bit like what happened with the banks in the u.s., positive yield and less regulation. -. we think that post selections that there will be less regulation, i think there is a movement towards that and a recognition of that and i think we will find some good opportunities there, bottom-up, individuals, but it makes me feel a little bit contrarian. >> you're guessing by the german election that things could be out of the way, this pressure and uncertainty? isn't that the biggest risk though, angela merkel's position, losing support already of late given her stance on immigration? >> there is that. and markets we have to look at that and say what is going to
happen, what are the policies going to be, how would this affect me? if i was theresa may i would be sitting there saying if anyone wants to get voted in in germany, we will not put tariffs on german motorcars, do you want to put tariffs on our motorcars? if we start doing trade and negotiations with the people standing for election -- rishaad: there we go. >> you get the guys coming in to make a commitment about what he will do. i think there will be some clever posturing from the u.k. politicians. >> nothing expected out of the ecb this week, but when do you expect them to act? >> they are not the story anymore. the world has moved on from central bankers. is moving away from bureaucrats employers towards markets and dealmakers. i think that is an interesting era now.
shery: welcome back. this is "bloomberg markets: asia". jpmorgan has upgraded its call on the indonesian stock market to neutral, reversing a downgrade that prompted the government to cut ties with the bank. fors get to haslinda amin more on this. what are they saying that to this change in assessment? a surprise after two
weeks, that is for sure. thatmorgan is saying now volatility in emerging-market bonds will subside after playing out following trump's election win. that is the reason for its reversal in its call on indonesia, so now j.p. morgan calling it neutral. two weeks ago, it downgraded indonesian stocks to underweight , so from underweight to neutral, it said it expected it indonesia to lag behind emerging markets. did it make the right call? since j.p. morgan cut its rating, the yellow line underperformed the wider emerging markets. shows whatchart happened last quarter, foreign investors sold 2.8 billion dollars of indonesian stocks and got smacked,piah the central bank intervened and
propped it up. it does look like j.p. morgan did make the right call. right, but is there a sense that j.p. morgan was pressured to reverse its rating after indonesia retaliated? that would mean a lot. , j.p. morganl itself says there was no pressure for its reverse and call, action taken by the indonesian government it said had nothing to do with it. in a statement, it said its research is independent and published as the result of extensive, objective analysis. inyou speak to some people the market, they say it is probably a compromise with the government. you know, indonesia retaliated and stopped all business with j.p. morgan. last week, it took further action against the negative research, ordering all primary bank,s, hsbc, deutsche
they have to maintain relations with the government, or if they fail to comply, their dealership licenses may get terminated, so crystal clear what indonesia once. you so much. haslinda, joining us from singapore. bloomberg markets: middle east coming up at the top of the hour. yousef gamal el-din is standing by in dubai. lots coming up. we have a call on saudi arabia from the imf, downgrading 2017 growth to .4%. implications the of that and look at the 50 billion dollar renewable energy plan being floated by saudi a ceo, more insight from in dubai. tim foxalso talk with
♪ measures, thef pound the trades near three decade lows with theresa may set to advocate for a hard brexit. vietnam's prime minister promises greater access to lenders and securities. switch, saudi the arabia 650 billion dollars for a massive renewable energy program. >> china's president set to take center stage at davos as donald trump stays away. yousef