tv Bloomberg Markets Asia Bloomberg January 17, 2017 8:00pm-9:01pm EST
rishaad: i rishaad am salaam it from bloomberg asia headquarters in hong kong. this is bloomberg markets: asia. ♪ rishaad: japan leads asian markets below and the yen spiking after trump talks down the dollar. theresa may gets explicit about brexit. china's president tackles protectionism warning that there
would be no winners from a trade war. we are 30 minutes away from the start of the trading day in hong kong. the -- but and take lumpur starting the session. what is going on? one point clear. about the equity markets in just a moment. this will highlight how the sentiment has changed from this time last week. friday, monday and tuesday and that is where we are at the moment. when you look at what sort of investors are buying into it is almost like protection. japan is one of the worst hit in the world. the second worst performing market.
dollar-yen pushing toward 112. that is an extreme example but it is what is hitting asian equities at the moment. we're seeing that extend the losses from europe into wall street. waites are up and let's for that to get underway. we saw the biggest drop in stocks since the brexit vote. futures and all things .qual, gold gets bid up let's wrap things up with a look at the markets opening. we have time one and where i am -- thatpore and we have
is a third of 1%. and ie the dollar off wanted to mention this. for the most part this morning but bank of and i wanted to mention this. america, david wu has described as the president-elect's open mouth operation. it is giving a lot of these traders in the -- and the underlying story said that the dollar is too strong. we are -- it is not hard to imagine that every morning call might begin with let's start things off with a look at the president's twitter feed. that has led to the big drop in the dollar which is why we are seeing some fairly extreme levels at the moment. referring toare what some call the commander in tweet. to sydney and haidi lun. samsung's chairman
has arrived for a judge to of an on the validity arrest warrant. he is accused of bribery and embezzlement. a decision is expected in the early hours of thursday. suit accusing it of forcing apple to use a chip for lower licensing fees. -- inggest maker of chip a statement qualcomm says the case is flawed and based on misconceptions. they described practices as monopolistic. says ita's government resuming research of it gets
information. boeing triple seven disappeared in march 2014 with 239 people on board. the airline says the search may take on a more desk-based format. has been an agreement between three countries involved. program,usion of this the search would be suspended but as the minister said, this morning, if new evidence emerged that pointed to another location then of course the three nations can consider searching there. haidi: hsbc said trading torations are -- could move paris from london. the ceo spoke exclusively to john nichols wait of the -- at
the economic forum in demos. clarity around single market forward.ortant step it removes a lot of uncertainty. you can see how the pound rallied as the prime minister was speaking. for us we have fully operating banking subsidiaries in france. we can wait and see how this develops. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. presidenthe chinese calling a government and businesses to reject trade wars and protectionism as he hit at get policies advocated by donald trump. the irony is not being lost in a lot of people here.
general secretary of the communist party of china, the standardbearer for free trade and globalization, she jinping making the speech of the economic forum. hitting back at protectionism bettering the key was management by government and also focusing on things like the growing wealth gap and financial regulation. this is the first time he had pushed back against the attempts by donald trump and policies he has put in place or is putting in place to tackle china on trade. even though he did not name trump or the president-elect in the speech. take a listen. protectionism is just like locking oneself in a dark room. while wind and rain maybe kept outside, so are light and air.
no one will emerge as a winner in a trade war. >> the darkroom analogy. a former chinese officials said this speech underlined the fact that the chinese government is taking very seriously the prospect of a potential trade war between the u.s. and china. rishaad: tell me something. how is the domestic audience in china going to receive it? has been trying to raise his profile since he took over as president. he gave a speech at the u.n. back in 2015, china hosted the g-20 last year. now this big speech, he was the top later at the world economic forum along with 80 chinese is nist delegates. it is about projecting an image of a man who is powerful and a visionary leader and a strong leader.
that is important because the communist party congress that happens at the end of this year, a key article moment for china where a leadership reshuffle is expected to take place. china is seen as something of a bastion of stability and continuity. that gives china's leaders an opening to push through some of the changes they want to see in infrastructure and architecture. belt, one road initiative, china has plenty of economic problems of its own but growth is stronger at 6.7%. that plus [indiscernible] has given china's leaders the confidence to step up. rishaad: still ahead, and accounting scandal. market value. we will discuss toshibas many challenges. may'smore on theresa clean break with the european union.
rishaad: theresa may pushing for a clean break from the european union. the clearest vision of exit today. total death kathleen hays has more. what did she exactly say, this is fundamental. that's she made an impression on markets around the world. the house taking on -- taking -- pound is taking it on the chin. ground to european union on the freedom of capital, people, meaning immigration and services? looks pretty clear that theresa may has decided to choose freedom over things like
immigration in the u.k. over trade with the rest of the eu. here's what she had to say. >> i want to be clear. i am -- what i am proposing theot mean membership of single market. european leaders have said many times that membership means accepting the four freedoms of goods, capital, services, and people. and being out of the eu but a member of the single market would mean complying with the eu's rules and regulations that included those freedoms without having a vote on what those rules and regulations are. keep tradingnt to with the european union. she wants a customs agreement, a customs union which is a free trade area with a common external tariff. she wants the ability to negotiate trade deals with the rest of the world, not just with european nations. she does want that talk in the
, a punitive deal, trying to punish the eu for leaving and discourage other countries from going away, that would be calamitous for the european union. .hose are her core objections we will see how far she gets when it comes to real negotiation. how bad with this before u.k. trade, possibly how bad could the read through the when it comes to inflation? look atit -- take a this chart. these blue bars showing you that trade with the eu is about you a half of what the u.k. does. the next biggest block would be the u.s. at 10%. this is important. on the other hand the eu buys a lot from the eu and the u.k. buys a lot from the eu. the european union. maybe they have some leverage. let comes to inflation the following pound is boosting
inflation faster than expected. inflation up from 1.2%. this couple kate's for the bank of england. hard brexit is moving ahead now. that 50%the point is of trade is with the eu but it is heavily skewed in favor of the european union. let's not forget that. that is a lot more little room in her negotiating position. >> it is not over until it is over. she hopes this will be in place by the end of march to start the negotiations. and then wrap up until -- it will not wrap up till 2019. thehas decided to push for hard brexit, going for the hard negotiation is the best course to follow now. thanks for that. more on brexit. haslinda: eu leaders are seeing
here ready when you are. they are responding to theresa highbrow approach. the -- our guest. took a highball approach. she wants full control of immigration and once as good a deal as possible when it comes to trade deals with the eu. she is not giving any leeway at all in negotiations, a she? >> she has made some choices and she is limited for options. she decided we're not going to be part of the single market. britain is not going to have european economic area states like norway or switzerland. it is not going to have a customs union like turkey. it will have a comprehensive we trade agreement. part, that is britain having its own arrangement with the european union.
thatting all of the models others have for it forward. that might be a smart move. that could be the best approach. it is far more than taking control of immigration. brexitot forget that aferendum was truly driven by deep concern amongst the population about immigration. she has gone beyond immigration. right now the has been an increasing fear that that freedom of movement would have to be adjusted or reset. with all these elections coming up, that could well be an issue on the agenda. she has tied britain to certain outcomes and certain scenarios. the markets are reassured and certainly those on the far right of the uk's conservative party are reassured as are the u.k. sides. there is a lot still uncertain. haslinda: there could be years of uncertainty about a smart brexit. -- has written is
defined its course to be is to exit under the article 50 process. at the same time, if it can, seek to negotiate a comprehensive free trade agreement with the european union, and let's not forget as that happens over the course of the next two years, britain has not to start to engage with potential partners globally and establish its own free trade agreement. this is a country that is -- has not had international negotiators for the past 40 years. isn't equipped to do it, it is a big question. like withthe markets the herd and the pound is rallying but for how long? there is a lack of clarity but the bucket thinks there is clarity now. >> we have heard everything and say nothing. everything is still in play. we really do not know how it is borderless have a island andp with customs rules and new agents
which will be needed and required. that is a serious question. the position from nicola sturgeon yesterday, the leader in scotland has made it clear that we are one significant step closer to potentially having another referendum. there will be a battle at home and complex negotiations in brussels and the need for britain to establish itself on the world stage. haslinda: what does it mean for asian economies? >> china wins. linda: china always wins. try has lost its best friend in the european union that britain is making it clear that it is set to do deals with china. it will find every way to establish the most preferential terms for its relationship with china going forward. the european union, the amaining member states need close relationship with their largest trading partner. will have to leave
>> donald trump is focused on reducing in america for americans. we fit into his bital -- business model. >> he is talking about doing all the right things. the things that should have been done in the past. there is very little they need to get the economy from strength to strength but there are risks. if there is an escalation of international conflicts [indiscernible] we have to do what we always do, engage with government and make our case and hope that things will evolve. >> we benefit if the construct
around the economy changes. s we plan to helps grow loans and deposits. be a debatelso which i think will be helpful for growth. in davos, one strong voice came through and that was xisident she jinping. -- jinping. he seems to be the only reasonable voice out there when compared to the likes of trunk -- trump. have you been surprised at how he stepped up to play a leadership role? >> he is enabled and forthright position. i think he rightly said that our
troubles and our challenges do consequence of globalization. let's not forget, what we saw with the brexit vote, what we saw with the election of resident trump was a rejection of globalization. and the economic harm that it was perceived to have done or has done too large -- a large swath of middle america and concerns about open borders and free trade in europe. i think [inaudible] we are seeing what our new world order might look like. establishing himself as the voice of globalization and free trade, the principal advocate for free trade and a strong voice on climate change. and with president-elect trump focusing on tweets related to his daughter and opinion poll results. and britain embroiled in these negotiations.
haslinda: how do you expect u.s.-china relations to pan out? >> it is the question. he owned all others. an emerging to see hardening of that relationship and the greater risk of a potential trade work? clearly, it is a little harsher today. it is a little more uncertain today. trump isdent-elect holding firm to some of that rhetoric. that xiwith position jinpin has takeng he is a leader who is a advocate for globalization. it is in nobody's best interest as he said yesterday. seeing -- what kind of geopolitics will we see?
>> it a real challenge for business. we are in an environment globally of a new nationalism. of leaders who are asserting a agenda. of nationalist looking at the world in terms of zero some. winners and losers. negotiation's. it is way more than just those countries. we also have the polish andation and hungry president or to one in turkey. we have a very muscular shinzo abe as well. we have a large number. we have got the strongmen around the world. haslinda: thank you for your assistant -- assessment. haslinda amin.as samsung back in court.
, who was talking about free trade. we also got the reference rate. the highest since november here. this also against the backdrop that we could be getting price data out of china any minute here. that's what we've got going on at the moment. markets at a down day. we have not been able to challenge the 20,000 on the dow. 1%e prices in china dropping month onmonth --.1% month. what we have is a day where across the board we have weakness when it comes to the equity session against this backdrop of some dollar weakness. that is not helping things in tokyo. out what's going on
with a bit more detail as we get these numbers coming through. in terms of house prices, something people have been concerned about. here's david with the market action. reporter: absolutely. just the sheer scale of what that entails, the movement in the property house and the movement that comes with it. more details on that in a moment. it is a snapshot of the markets right now. a broad decline across the region at the moment. you go down the list, you have s&p futures, and on a day like this, 1215 was your level. just to mention some of these lines that have come through. h,k at dollar c and
obviously a big drop in the dollar overnight. at 2.23 percent. we had a big drop, a big adjustment. that while that six was expected, it is the injection of cash that has come so far from the best this week in the pboc. billionalking about 460 between seven-day reverse repos hundred 75 billion on monday. -- 175 billion on monday. let's have a look at the money market rates overnight. we are down to 2.16%. we are nearing chinese new year.
cash might be quite tight. it's a seasonality factor. i think that's the best we can describe it. 2.16% is your overnight rate. equity market in hong kong half of 1%. we are seeing broad-based declines across the region. a hundred on the upside, just below 23,000. it looks to be a broad-based rally with the exception early on. the philippines just opening up at the moment. 7100 at your level. we are still seeing broad-based declines, but we have come up most of the day. i showed you the dollar-yen
bucking the trend. down to't look to be single stop, because just about every stock is on the way up there. rishaad: getting to these home prices out of china. prices declining in 46 cities as opposed to 55 in november. some of the headline figures here, beijing and shanghai on a month-to-month basis decline when it comes to house prices. existing homes down by half of 1% on a month-to-month basis, down by 2% as it comes to new homes. context, homeo prices are up year-to-year. new home prices are down by 2/10 of 1%. that is on a year-by-year basis.
that's what we have got going on. further curves have been imposed. it does seem like some of those are working as home price growth ass slow down in 46 cities opposed to 55 cities in november. let's get the first word news headlines. here's heidi. deutsche bank will pay $7.2 billion to settle its handling of mortgage backed securities in 2008. the deal with the justice department includes a 3.1 billion dollar civil penalty and four $1 million in really to homeowners. attorney general loretta lynch says the bank and treated directly to the financial crisis. deutsche said the u.s. was seeking 14 billion u.s. dollars.
the to say they will spend 3.1 million dollars on factory and r&d in the country over the next five years. they say they have no plans to ship american jobs to a recently opened production line in mexico. hyundai says it will boost the u.s. economy, leading to increased demand in cars. hesia's president says doesn't believe u.s. president-elect donald trump hired prostitutes in russia, calling the report "nonsense." the kremlin told reporters the unsubstantiated claims work concocted by people with no moral boundaries who are trying to undermine the election result. trumpmos were shown to and president obama by u.s. intelligence agencies. >> these stories are clearly fake. visited moscow, idaho or when he came here, a couple of years ago, he wasn't a politician. we didn't even know about his political ambitions.
just a businessman. one of america's wealthy people. do they think our special services are hunting for every u.s. billionaire? of course not. it is absolute nonsense. from the u.s. army intelligence analyst, chelsea manning will be freed from prison in may after president obama committed her sentence for leaking classified material. in 2010 andsted sentenced to 35 years for passing 700,000 military files and depomed cables to wikileaks. the decision allows the manning -- allows for manning's early release does not amount to a pardon. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm haidi lun, this is bloomberg. rishaad: the vice-chairman and heir apparent will be decided later wednesday when a soap -- engle,ey saw -- steve
what do we know? what do the next few hours hold? obviously a couple of technical issues there with the audio. let's have a look at what's going on elsewhere as we wait for that line to be reestablished with steve engle insole. seoul. toshiba looking to spin off its chip business. the company'sre most profitable division, but it may sell up to 20% of the unit. what is behind all this? toshiba has been facing some challenges recently. they said that they may have to write down the value of their nuclear business in the u.s..
there are part of a transaction about a year ago that has led to some deeper problems than they realized. as part of that, they are trying to bolster the capital. they are considering spinning out part of the memory chip business that has been one of the bright spots in this broader conglomerate. they make everything from televisions to pcs, as well as nuclear facilities. they are looking at spending out part of that as a way to raise $2 billionmillion -- or $3 billion. they say no decision has been made at this point. rishaad: the point is, this company needs the money. does it not? reporter: they do. this is their second accounting scandal and a couple of years. they had an issue a couple of years ago with some profit padding. they had to pay a record fine here in japan as part of that. now they are dealing with a second issue revolving around their nuclear business in the u.s.
westinghouse bought this unit from a company called chicago iron to help construct nuclear plants. there have been delays in those plants -- in the construction of those plants. coulda has realized they write down to the tune of a couple of billion dollars. they're trying to boost their capital. we reported as earlier, have said they are willing to extend the financing to toshiba at this point to try to rearrange some of these assets, raise some capital, and stabilize the balance sheet. rishaad: thank you for that. have a look at orient overseas and what is going on here. it is jumping 11.3%, the most since march 2011. having a look at what is going on with this company, it is the highest it has gotten to since august 2015 after reports on a bid from a ocl. as it is a get more details, we
will bring it to you. it is dropping back to a gain of 8.4%. more on this big decision out of a court in seoul. we have the heir apparent of samson, his future hanging in the balance as an arrest weren't is considered. hopefully we have steve now. what do the next few hours hold? we know for sure, for the next couple of hours, he is going to be held inside this seoul district court, which is behind me in the building that holds the seoul high court. that hearing before a judge is expected to last between two and three hours. we are not expecting a decision from the sole judge until maybe after midnight. it is probably the most prominent case on the docket today.
he has other cases to decide. this one will be decided perhaps between midnight and 2:00 or 3:00 in the morning. much is at stake, because this is the first time the major head of a conglomerate has had a special prosecutor issue an arrest warrant. past heads of these companies have been put in jail or convicted of crimes, however, this is the first time we have had an issue of an arrest warrant and had to have a decision made on that. what does it mean for jay y. lee? it means whether he's been tonight in jail and subsequent weeks ahead of the trial, or if he goes home today. again, this is a case that is gripping the nation because it is more than just the regular andbusiness and politics corruption combining. this goes all the way up to the president, who was impeached.
there are a lot of people in this country who are sick and tired of this kind of relationship. what happens if the court approves this arrest warrant? as many do expect. reporter: sorry, i lost you there for a second. rishaad: just want to get your view. a lot of people are expecting this arrest warrant to be issued. what happens next? what happens next is he would be put into jail. he would be remanded to custody. then again, we have to start looking down the road. if indeed he goes to trial and father, the, his psion of the company, has been convicted twice of some bribery
charges and taxes asian. however, he never went to prison , and returned to the company and continue to run the company. this has been standard practice. some executives have ruled their company from prison. a lot is still hanging in the balance for him. rishaad: thank you for that. steve engle there. concerns over a potential trade war between the united states and china. we're going to be hearing exclusively from the bank's chief executive. ♪
million and could seek share this year. -- increase has demand for its products. considering raising their state in the indonesian whiskey producer. smirnov is weighing an open offer. the australian conglomerate says earnings should come between 102 million dollars and $105 million. hsbc says china could routed big area for growth this year, and the bank is raising its presence in the river delta that surrounds hong kong. --spoke exclusively >> in every country, there are
risks. china is not unique in this. we are pushing into the po river area ascause we see the a conglomeration of cantonese speakers. you've got this bridge that runs from hong kong to west bank. the has the real rate is being built to hong kong. decoration is taking place. we see this is a big opportunity for us. in a hong kong, we have a very big market share. this is the first opportunity we have had to expand across the border. there gdp has slowed somewhat. our timescale for hiring 4000 people is pushed out, but
probably no more than 18 months. reporter: you're not worried about to anchored in the cantonese part of china? there are not always readily relations. approacht operation for hsbc is in hong kong, and we are blessed with 29,000 talented cantonese staff. it is a logical thing. my confidence that we can execute this well is very high. reporter: what about the bad debt. numbers, $3.8hese trillion in wealth management products, we all know is not entirely solid. you have issues in the financial system. how do you deal with that? >> you have to deal with two different levels. what is your company's exposure? what is your banks exposure? hours has been very limited. we been conservative. -- we have been conservative.
we have very limited exposure to smes, very limited exposure to local government. thesecond exposure through chinese banks, and we have been prudent in the way we have constructed our lending exposure to chinese banks. the third order is the extent to which bad debt has hit the system, it slows overall dgp -- gdp. we are exposed to that. don't see a hard landing. we're still looking at 6.5% gdp in 2017. there's a point at which people assume chinese statistics weren't reliable. team andave had a working with the chinese statistics office for the past couple of years. the chinese data is reliable. therefore, we see pretty good gdp growth. dallas --taying in
rishaad: you are with "bloomberg markets asia". chairman says he expect only a few concessions to get approval for china's $43 billion deal. he says he is not worried about going through. concerned, we'm are still extremely confident. we are going step-by-step. it takes time. we got the approval last august.
next on the agenda is ftc in the u.s. and the european union. we have made quite good progress. dealing withill be china to finish. it takes time. all the competitors merging together, so i understand how it relates. reporter: is there anything you have run into that investors might be worried about? >> really not. the only thing is what happened in the industry. our deal is a change of control. china did i have a lot of activities in the business. we want to understand the full picture of the industry. reporter: are there any areas of overlap that might prompt regulators to ask you to dispose
of some assets? what you prepared to get rid of? >> the only activity that china has in the chemical space is a quite different from the research-based products we have. nothing that will fundamentally change the business as it is today. reporter: you mentioned the fromval that has come down the committee for foreign investment in the united states. is there any reason to be concerned that with donald coming to office, he may ask to reopen its consideration? >> two reasons why am not concerned. it is quite, difficult to reopen that. the second is that i believe donald trump is focused on reducing in america -- producing
in america for americans. so we figure well into his business model. reporter: you're going to continue as vice-chairman of the company once the deal is done. based on everything you know now, will you and china together the answering donald trump's call to bring more manufacturing to the united states? >> we keep expending in the united states. i think we are already fitting the bill today and syngenta will continue to be a global company. it is one of the things we find attractive and what makes us what we are today. rishaad: the syngenta chairman speaking in davos. coming up, it is the end of an
♪ john: welcome to our special bloomberg coverage of donald trump's inauguration. every night this week, we are looking at policy repercussions. ofay, spending and the costs some of those promises donald trump has continued to make since his election victory. i am asking congress to support the construction of new roads, bridges, tunnels, and railways all across our nation. we are going to do it.