tv Bloomberg Markets Asia Bloomberg January 22, 2017 8:00pm-11:01pm EST
♪ it is 9:00 a.m. in singapore, midday in sydney, 8:00 in the evening in new york city. i am rishaad salamat at bloomberg's asian headquarters. this is "bloomberg markets: asia." ♪ rishaad: taxing questions, the white house says donald trump won't release his returns i has team offers alternative facts. democracy isstern flawed, but ready to work with the new administration. verdict,reparing its
badly fitting batteries will be blamed. news fromo breaking the federal aviation authority in the u.s., united continental holdings requesting a ground stop for domestic flights. it applies to mainland flights. we tried to get hold of the airline, but haven't had any calls returned just yet. we will bring you the latest as well. a full ground stop for united airlines there. just under half an hour before the trading week is underway in hong kong and shanghai. chinese lunar holiday. markets coming on stream. sophie, a good day. sophie: a good day, but not some earkets in asia as they tak
into account what trump had to say on inauguration day. strength weighing on japanese shares, falling for the first time in four days, exporters weighing on the nikkei 225. thisba having a good start monday, its biggest intraday gain since december. media reporting toshiba will raise 500 billion yen to cover its nuclear write-down. plus, canon is considering investing in toshiba's business. .1%, but gold miners advancing for a third day. in the other direction, the biggest mover on the asx falling 15%. as told provide a hint the health of the u.s. economy. the company said it faced
revenue and cost pressures towards the end of last year in north america due to u.s. retailers restocking. is on course for a seventh straight day of declines. take a look at the kospi, strength so far for korean shares. looking ahead, south korean fourth-quarter gdp and taiwan. some samsung pressure coming up. that's what we are looking at today. rishaad: breaking news, samsung has revealed the cause of those overheating note seven smartphones was down to faulty batteries. ones, we haveized all the details. had indications that samsung were going to say the batteries were the key issue behind the overheating
smartphones, some of them catching fire. we have heard from samsung electronics saying faulty batteries did trigger the note 7 fire, saying they will strengthen safety. the head of the mobile division of apologized over the note 7 issue. we have some pictures coming live images of the company making this announcement, telling us about what did trigger these fires. rosalind: hopefully we will get about the issues that may have been behind that faulty battery. year, a u.s. consumer safety agency said the batteries were too bigng sdi and pension when inserted in the phone, causing the phones to overheat. we will probably find out more today as to exactly if that was
the reason behind it and what the issues were in the batteries. critics at the time said samsung rushed to get its phone out before apple. so that contributed perhaps to the problem with the battery. rishaad: it doesn't surprisingly seem that the overall samsung business is holding up well. it isnd: and this is what best known for, but has ,uccessful and strong divisions a chip division driven by demand , so that's doing particularly well. it has fourth-quarter earnings guidance in january, posting its biggest operating profit in three years, $7.8 billion. that is despite the issues with the note 7 phone. analystsperformer many think it will be the chip
division on stronger prices. the fourth quarter earnings release is out tomorrow. we will see more in terms of how divisions broke down and what divisions and how they performed, but consumer electronics probably not performing as well as others. ofhaad: we had the head product in seoul, korea, he has just apparently apologize for this whole crisis, if you will. we will be monitoring further headlines as and when we do get them. , here isrst word news haidi lun. good day. president trump is breaking a campaign promise. a top adviser sanko white house no intention of releasing his tax returns. trade is expected to dominate his first week in office, meeting theresa may on friday to talk about a post-brexit deal. the president and his team have
stepped up their war against the u.s. media and what were termed as alternate fax. president trump picks a secretary of state almost certain to be confirmed as key republicans drop their opposition. john mccain and lindsey graham will vote for rex tillerson despite concerned about his relationship with russia. john mccain said the new president deserves the benefit of the doubt. a committee will vote on monday. a new push to end the fighting in syria with russia, turkey, and i ran talks in kazakh a stand. the and armed representative groups representatives will attend as well. tohough the u.s. ambassador kazakh a stand -- kazakh a stand hong kong has retained its rank as the most expensive housing
market for the seventh year in a row. survey says the median price of a home in the city was more than 18 times the median annual household income. affordable housing has been a consistent headache for outgoing chief executive. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. been sendinga has the u.s. president and all of branch, congratulating him and offering ways the countries can cooperate. we look at state media, a bit of a different note being struck here. quite different to what the messages out of beijing. twitter, often critical of china. his inauguration address, he did not mention china by name
but did make references to certain policies on economics and the military side. china of course has been very impressive for us and its criticism of some of the picks of the calling it the rates wall of protectionism, peter navarro, robert light heiser, who has been critical of the chinese currency policies, and also wilbur ross, who at his confirmation hearing said china was the most protectionist major country, then rex tillerson, secretary of state nominee who has been critical of china's expansion in the south china sea , so a little bit of an all of branch coming from beijing. newspaper?ut the china in the last week has
made statements about improving iness for foreign investment areas long closed like banking, insurance, mutual funds, and elsewhere. they are sending signals may want to do business with china, but the geopolitical issues are more touchy. seem theit does language has been far less compromising when it comes to taiwan. >> not compromising at all. rishaad: exactly. and taiwanina sea are two issues, defining core interest. rishaad: these are the red lines being drawn. >> they will not budge on these issues. olive same time, those branch editorials came out, we had one from the people's daily what the reiterated communist party of china has been saying for 60 plus years,
democracy has reached its limit and the deterioration is the inevitable future of capitalism. there, you heard it here first. news,d: back to breaking united continental has grounded domestic flights down to i.t. issues. that request was passed on to the faa in the u.s. united air requested a ground stop for domestic flights. that's what you have. so if you are headed to an airport and a domestic passenger, issa just you ring a head and have a word with him. right, still ahead, talent crisis, a third of banking employees looking to leave. we look at why later on. plus, trump's administration seems to be driving investors color. trumps favorite why investors are seeing a golden opportunity. that is next. ♪
you are back with bloomberg markets, the latest business flash headlines. saudi arabia's energy minister say they have cut supply by one point 5 million barrels a day since the first of january, 80% of their collective target to stabilize prices. it is one of the best agreements producers have had. indiana, they agreed on monitoring to ensure 100% compliance. maker takatarbag having another difficult day. sellers vastly outnumbering the buying side of things, the stock yet to trade. losing 20% on friday, tumbling on news that they favored court-let bankruptcy. the stock had been severely
beaten up to that point. foxconn chairman terry gou weighing a joint investment with apple in a u.s. display factory. the facility would cost more than $7 billion and create 50,000 jobs. while u.s. protectionism is inevitable, american consumers may not be willing to pay higher prices for products made at home. asianxt guest believes markets have improved since the end of last year. she joins us now from singapore. buy onwhat it was was the election and sell into the inauguration. where do we go from here? >> right. i think the picture has not changed significantly from december. the market is still searching for clarity despite donald trump now becoming president.
i think the market itself has shown optimism, even in asia. gaining 4.5%kets since the start of the year. in general, markets are going up, so we have a good start to that year, but moving forward, it depends on how things play out for sure, yeah. saw heading towards that 20,000 down level, much talk about that, a bit of a question on everybody's lips. the point is we have gone further away. price to earnings multiples in the u.s., 21 for the s&p? 18.5 when it comes to the dow? the point is, what is the danger of stretch by uh and's having an impact on equity markets in this part of the world, which are
cheap relative be speaking? i think in that sense even though the pe ratio is high, the defense is the market is financials andt industrial sectors on the back of donald trump, who has inspired the market. in that sense, even though that is the case, even though the pe ratio is high, it's about how much higher it can go when policies do come in. thisugh uncertain at moment, in comparison for asia, there is still the trade issue that is unclear at this moment. i would said the disparity between the p/e ratios -- rishaad: tell me something, as we head into that inauguration and in the wake of it as well, do we still have this movement towards haven assets? >> right, so i think one thing
we all noticed to so far is that gold prices has surged above the 1200 levels, turning into support, so moving forward, there are many safe havens, and itselfself is presented shiny at the moment, especially given the political uncertainty with the elections in in europe and also in asia as well, so i think gold is getting its shine on. ok, lots ofht, uncertainty as well, now what are you looking at in this part of the world? what are the questions being asked by your clients? >> this is trying to figure out the policies we have really for donald trump. for the asian side, it is about the trade policies.
it is the first and foremost concern for the asian market. up and gdp picks in thats for the u.s. trend, it will be beneficial for asia trade policies. we have heard the u.s. president holds a nationalistic stance, that there will be constant moving forward and some countries will benefit more than others in asia. rishaad: what about oil prices? opec saying it is one of the most successful agreements they have ever shaken hands on, what does the markets say? >> right, the market right now, you can see that the net are still atitions historical highs, so in that sense, the market is still terms of oilh in
prices and the opec discussion helped. on the other hand, baker hughes higher than a year ago, so that itself is not a rosy picture moving forward. this is a problem of a some supply-demand balance at this monet and how we will move forward in the balancing of the supply struggle. rishaad: have a great week. next, make peace, not war. australia still backing the tpp -- tpp despite donald trump's plans to scrap it. we will hear from the nation's finance minister. ♪
minister has downplayed the threat of an all-out trade war between the united states and china. mathias cormann telling francine lacqua that australia is still committed to the tpp. looking forward to working with the trump administration. australia has been a long-standing friend to the united states. obviously we are confident that the trump administration is going to be focused on making as asthat america is strong and successful as possible. we look forward to doing lots of business with you. >> this is the u.s.-australia -- relationship. there as another relationship you are reliant on, the u.s.-china relationship.
what happens if there is a trade war between china and the u.s.? >> we don't believe there will be a trade war. we do have a strong relationship with the u.s. is our largestes destination for investment and largest source of foreign china ist, and indeed our largest trading partner, the u.s. is our second largest trading partner. these are both important trading relationships and we look forward to both of them going from strength to strength. what kind of impact will his policies have on the asia-pacific region? there must be a little bit of concern, even if we give him time? >> it is too early to tell. we look forward to working with the administration constructively. there are a variety of areas will australia has an interest rate we are committed to tpp and
proceeding with it. there will be conversations to be had in relation to do so, not only the u.s., but other countries that are part of that. , andve to give this time we look forward to engaging positively and constructively. >> are you concerned about the level of the aussie dollar? this is one of the strongest performances. it must hurt your ability to get away from mining? >> the value of the dollar is set by the market. it is not controlled by the government. that is an important feature of our system, an economic stabilizer of our system. rishaad: it is what it is. that was mathias cormann speaking to francine lacqua at davos. minutes away from the start of the trading day here, the well,ket auction, some, on the way up i believe, but
only by .2%. the hang seng index kicking off the session there. flat when it comes to the futures, against this backdrop of a mixed bag. we have the safe haven assets being favored so far. the yen climbing, and u.s. and australia government lawns doing the same yang, yields coming down a little bit, and that's currently what we have that the moment. right, let's tell you about what else is happening. over 1%,i off by trading 200 points lower in tokyo. the kospi moving slightly to the upside by .2%. downuld say the nikkei because of that yen strength, exporters dragging things down. as donald trump considers taking on china over trade, we look at
your first word news. samsung says that is made by an affiliate were to blame for the note seven fiasco. overheating and fires were called by separation in the batteries, which were too thin. the company apologized and promised to strengthen batteries safety. the company's deepest business off its flagship smartphone and may have cost at $6 billion. an wall street journal says investigation into been massive data breaches said yahoo!, citing unidentified sources saying they were look at
whether the company should have reported the hacks earlier. breachid the 2014 affected fewer than the 500 million disclose. secretarypine finance has started a visit to beijing to discuss $15 billion worth of investment. china agreed to the deal and october, the president calling on beijing to help rebuild philippine infrastructure as part of its pivot away from washington. givenh lawmakers have approval to the president's campaign to secure sweeping executive authority. members have voted in favor of making the president the head of the executive and abolishing the prime minister. it will trigger a referendum that could be held and april. opposition parties say the changes would concentrate a significant amount of power in one single authority. global news 24 hours a day powered by more than 2600 journalists and analysts in more
than 120 countries. this is bloomberg. rishaad: asia has been digesting what donald trump had to say. here is sophie kamaruddin with a aok at early marching action, lurch towards the safe havens. sophie: a pickup in safe haven buying, gold, yen, treasuries on the rise. japanese shares falling for a fourth day. the one bright spot has been toshiba, rising the most in three weeks on reports the company plans to sell a 20% stake in its chip business with canon as a possible investor. checking in on samsung shares, up .5% after the company apologized over the galaxy note seven debacle, saying that faulty batteries contribute to fires plaguing the device. 200, brambles falling
largest palette shipper, downgrading its forecast on pressures facing its u.s. operations. checking in on currencies, the softening of the dollar rally after trump's speech, the yen leading asian forex higher, and the singapore and dollar seen the biggest gains. afterfshore yuan trading china set the fixing. stronger than friday's fix. on sunday, the pboc adding to record cash injections ahead of the lunar new year. with that, let's check in on how chinese markets are shaping up this morning. the shanghai composite and the kong, gains in hong of over .1% and shanghai, rising for a second day, telcos and consumer staples leading the rise.
adding .3% so far with industrials leading this market higher, snapping a two day drop. rishaad: right, let's get you to breaking news that came through from the top of the hour, samsung has confirmed that faulty batteries did cause some of its note seven models burst into flames. what has samsung been saying since then? it is about the wrong size battery. rosalind: that's correct. samsung has been saying that regularly sized batteries caused overheating and said the separation film was too thin in the batteries, which caused the fires. the original laterally was made ofsamsung sdr, an affiliate samsung electronics. the problem was that the replacement batteries were also uplty because of a ramped
production to get those to replace the faulty ones. those replacement batteries were also having problems, so samsung said they provided a target for the specifications and are taking responsibility for our failure to identify and verify issues arising out of design and manufacturing. you can see this ongoing press ,riefing by samsung electronics talking about issues they had that caused the note 7 to overheat and catch fire. samsung has not yet detailed the estimatedhe recall, to cost upwards of $6 billion. samsung has yet to unveil what the costs are going to be, but the mobile division head has apologized over the issues with the note 7.
the december 2 consumer trust is harder to quantify because it has been samsung's against ever business crisis. samsung has a product out in march, the next in the galaxy s line of products, and samsung says we have taken corrective measures to ensure this never happens again. rishaad: right, going to take a look at what else president trump has been doing. he has made no secret of calling china a currency manipulator, but he is not the first president to take it up with them. what is the biggest difference between 1994? join china's campaign to th the wto. the u.s. labeled china as a currency manipulator and said unless you reform the exchange rate, we will not support your
effort to join the wto. that was a big stick, and it did work. china did reform and change their exchange rate system, making it easier to buy foreign currency. larry summers at the time said that was their biggest weapon to use against the china. 1994, the u.s. lifted the manipulator tag. not anme around there is easily identifiable caret they can dangle for china. rishaad: the chinese economy is different the 1994. the key is that it is not as export orientated. manufacturing sector is very important there, but we know that we are seeing an ever bigger role for services, consumption driving growth, services now bigger than manufacturing, so there is a
view that if the u.s. wants to widerd that perhaps the economic impact would not be what it would have been 20 years ago. whyaad: so the question is don't they support new tariffs on china? do u.s. consumers want to pay more for their goods? there are many different layers, but there are u.s. companies with operations in china who would feel like they are getting targeted by terrorists and risk of retaliation by china. they have a big stick and will target u.s. investments in china. this in the consumer goods areas, nike, starbucks, and apple. you can see the impact it would have on the wider supply chain, title i feeds into the supply story, which feeds into the u.s.. they would also be hurt.
ratchet up wants to trade tensions, it would not be there would that, be spillover and unintended consequences as well. very much.ank you having a look at the relationship between china and the united states and where it may go from here. indeed, trumps trade talk got even tougher in his inaugural address and on the white house website. the question is whether that will extend to the u.k.. he will sit down to discuss perhaps a post-brexit view. kathleen hays, a warm welcome, what did the president say? >> it is wonderful to be in hong kong. this is an interesting question. we know donald trump talked tough on trade on the campaign trail, but there he is getting ready to be sworn in facing the crowd with his inaugural address
and promising it seems to get tougher on trade in terms of police u.s. trade partners and taking every letter of every deal and making sure it is enforced. , onvery decision on trade taxes, on immigration, on foreign affairs will be made to benefit american workers and american families. we must protect our borders from the ravages of other countries, making our products, stealing our companies, and destroying our jobs. he saidsn't just what in the inaugural address either. the white house website now reflects donald trump officially. he has found to withdraw from nafta., renegotiate if you can't get what he wants in terms of a deal that is fair
for workers, he threatens to withdraw entirely. jump into the bloomberg with me now, nafta's impact on manufacturing workers. what is the u.s. job killer? nafta? china entering the wto? exports, line grew, but manufacturing employment is what has fallen. not hard to sort out is mexico and what this means to them. 80% of mexico's exports go to the united states, but when you think of that, you can understand why the president of mexico over the weekend said he will look for a respectful dialogue with donald trump guided by mexico's interest. he is meeting with donald trump on january 31, so not wasting time getting his voice in the mix.
you know, we have theresa may talking to donald trump this week, possibly talking about a trade deal here. could be out of the european union in two years and need to do a deal here. in terms of theresa may and what she is looking for, a possible trade deal for the u.k. with the u.s., a white house said the trump team is also eager to lay the groundwork for a trade deal that will take is complete.exit theresa may said she once to build on the special u.s.-u.k. relationship, not just trade, national security, and more. they believe their talks with may ahead of the vote encouraged
her to be more aggressive and take a stand, and that will help in her talks with the eu. talks on as opening post-brexit trade deal with the u.k. as well, so as the theresa may said come u.k. is open for business. andaad: domestically, trump they are not facing easy weeks, are they? >> challenging weeks, let's say that. we have seen the market give up a little bit, skeptical on how quick trump can take steps on trade, tax cuts. consumerour bloomberg index, the numbers for the latest we, republicans confidence has ebbed a bit. ebbed.ts, there's has
independents, the only group where they are getting more confident. theresa maythat faces a decision from their supreme court on tuesday to let her know if she can go ahead as planned, trigger the brexit or not. if they turn that down, it goes back to u.k. parliament. there is a potential coalition forming to make sure she does -- rishaad: is there a crisis brewing when it comes to the banking industry? our next guest certainly thinks that is the case. that is on the way. ♪
bloomberg markets. banking may be facing a looming with one third of employees planning to leave over the next two years. let's get more with the chief executive and managing partner, thank you for coming into what is the section with -- situation we are in? trouble of having attracting talent and retaining existing employees. declineseeing a huge from graduate destinations from ivy league schools. of these graduates are transitioning into technology careers. rishaad: they're going to the google and facebook of this world. also, with the turnover they are having at some of these banks, it's costing them a lot of money. an amazing figure, some global banks could be hit with $1 billion a year in this?
that's an awful lot of money for one bank. >> that's correct. the key costs banks aren't factoring in our the replacement costs of the individuals they want to keep. are onry turnover rates the rise, and this is despite the fact they are bringing the ax down on headcounts. if you want to replace a good men office, front office vice president working in aif global market role, not only do you have to consider salary premiums , but they are hidden costs. any new hire they bring in ultimately will take time to get up to speed. it is three times the cost of total annual costs.
rishaad: it's better to pay them more to stay? i'm deftly not going to make that 100% argument, but there is more room for banks to see about negotiating with their current employees rather than simply replacing them. rishaad: is 1% of voluntary turnover, each 1%? bank's you look at a cost base and factor in replacement cost figures we calculated, a factor or multiple of two angle or three times, especially front office employees, these numbers stack up. a lot of global banks, especially global turnover rates, it is 1% or 2% above averages. rishaad: the thing is that banking is changing and the industry is having its guest restructuring that i can remember. now, what is the future of
banking look like? that will be key when people decide what they want to do. >> i agree. there will be lots of banks making choices. you are seeing universal banking models come under extreme pressure because it is hard to sustain a fully integrated platform. rishaad: when i talk about the restructuring, i'm talking about the boutique houses, not just hedge funds, nimble asset managers. >> absolutely. you are seeing that industry dynamic change, and a lot more career options have picked up a lot of market share, attracting some of the key talent such as goldman sachs, ubs, and deutsche bank. rishaad: when you decide what you want to do, it may not be
quite so comprehensive as he used to be. you are saying also that people are now going into tech, established technology companies, google, amazon, facebook. do they have the same compensation? >> no, they don't. they are definitely competing, but this brings to light another dynamic around why people are shying away from the industry. there is a reputation or stigma associated working in investment banks that did not exist pre- financial crisis, but there are dynamics about what banks offer in terms of a holistic value proposition, and this is where banks have left a lot on the table. is their fundamental proposition beyond compensation.
the banking industry needs to think seriously about the talent proposition. they still need to retain their best and brightest talent to be successful, and unless they are fundamentally addressing those concerns, they will go through much more of a rough time. very muchhank you indeed. right, coming up, why job seekers in singapore have it easier than most when it comes to finding work. ♪
immigration policies. singapore has a tight labor lid onbecause it put a foreign workers before immigration became an issue. singaporeans were complaining about foreigners taking jobs, pushing up prices, and became an election issue, so the government stepped in and slowed the entrance of foreigners, so here we are struggling to fill jobs. economy, slowing singaporeans can find a job in eight weeks. those in australia and other emerging -- developed markets take twice as much time to get a job. whost all of those workers retired at 62, they were reemployed. i want to show you this other chart that shows you have singapore and hong kong lower longer term, but it is still an
issue in singapore, the rising disconnect between skills and jobs. skillsogy requires a upgrade, and that is not happening fast enough. upgrade or be left behind. rishaad: the thing that is a bit one country having trouble creating jobs is the philippines. this is among the fastest-growing growing in the world, english language proficiency and literacy advantage as well, so what is going on? the persistent problem of creating jobs in the philippines is because it has a fast expanding population and job creation is unable to keep up. in the past three years, the number of people entering the job market was greater than jobs created, plus the quality of jobs are below par, so even though gdp is surging at 7%, that benefits are not trickling
down to the people. only 60% of those that can work have jobs. in vietnam and thailand, we are looking at 70%. so the philippines will have to ramp up job creation in the country. you for right, thank that. we are taking this news conference earlier live out of seoul, korea, the samsung product chief apologizing for what has been happening at the sdr,ny, blaming samsung the battery maker associated with those note 7 fires. they are saying at the moment invested 130 has million dollars in battery safety. that is coming through at the moment. anything else of interest, we will bring it for you. in theup, a new man white house, we ask whether
is almost 10:00 a.m. in singapore, 1:00 p.m. in sydney, and almost 9:00 in the evening on sunday in new york city. coming toad salamat you from bloomberg's headquarters in asia and hong kong. this is "bloomberg markets: asia." ♪ rishaad: united airlines grounding all flights in the u.s., hit by computer problems. samsung blames the overheating smartphone on batteries made by an affiliate. affordable hong kong? the city is the world's most
expensive housing market for the seventh year in a row. let's get to market action and get to sophie kamaruddin. sophie: a mixed day in asia, but some turnaround, shares in wellington green. pointing to a lower open, reversing friday's rally as markets digest what trump had to say on friday. safe haven demand boosting yen strength, gold above $1200, so the stronger yen dragging japanese shares down for a fourth day. especially exporters weighing on the index. bright spot, in focus earlier, climbing 7%. we are looking at japanese sixth, takata set for a day of losses, likely to fall by the davey limit. -- the daily limit.
elsewhere, rising gold prices are helping miners on the asx, but the index down .5%. a quick word on brambles, coming afterc drop the company downgraded its profit forecast on weakness in u.s. operations. gainsere, taiwan leading in the region as energy and materials support that advance, and chinese stocks rising for a second day, up .5%. strengtheningan as the dollar extends as losses. today, the pboc strengthened the daily fix. .6%,on the hang seng, up consumer stocks and driving that advance. read taylor bell international hoping a two day drop of 2%, .utperforming
that is the view in asia. you for that. you nine did airlines grounding all mainland flights in the nine states, blaming i.t. issues for this. dan maes is there, his flight delayed, now waiting. are you on the tarmac? i think we just had, we will retry him. we lost him on the line. while we wait to make that reconnection, let's join haidi lun with first word news headlines. president trump is breaking a campaign promise, a top advisers sang the white house has no intention of releasing his tax returns. trade expected to dominate his first week in office, meeting
theresa may on friday to talk about a post-brexit deal. the president and his team have stepped up their war with the media over the size of his inauguration audience and what were termed "alternative facts." rex tillerson looking to be confirmed as john mccain and lindsey graham said he will vote for rex tillerson despite concerns about his relationship with russia. john mccain said the new president deserves the benefit of the doubt. the wall street journal says the investigation into two massive reaches at yahoo!, citing unidentified sources saying they will look at whether the company should have reported the hacks earlier. the report said that yahoo! thought the 2014 breach affected fewer than the 500 million users it eventually disclosed. toshiba's shares on the rise, theently up, this after
newspaper reported the company is seeking $4.4 billion to cover its nuclear write-down. the report says selling 20% stake in its memory chip operations would generate $1.8 billion, with potential investors including canon. is facing pressure to secure an investment for a british nuclear power project. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. storyd: now this is a developing, sam song electronics identifying and confirming that it was faulty batteries causing its note seven model to burst into flames. some sun has been talking at a news conference, what are we up to speed with? rosalind: the batteries caused the overheating and damage to film7 phones, separation
in the batteries was too thin. samsung has engaged several agencies to conduct their own investigations. they are trying to recover consumer confidence in its products. ,mong the agencies that spoke they conducted their own investigations and some of the batteries, the film i mentioned, and the repeated charging of the phones, multiplying issues over time. the batteries were made by samsung sdi. samsung saying the replacement batteries were also faulty, but for different reasons because of the speedy ramp-up in production to replace the initial batteries
that have problems in the first place. we are taking responsibility for our failure to ultimately identify and arify the issues arising as result of battery design and manufacturing. it also said we have taken corrective measures to make sure this never happens again. says it has invested $130 million in battery safety and that it's batteries may be installed in future samsung phones as well, so the relationship expected to continue. rishaad: i would have thought so. do we have any numbers on how much it has cost the company? samsung has not detailed the financial impact of the samsung note seven fiasco. it took a hit in its third also it haslts, and
made an allowance. to variousken experts, and generally it is expected that the costs will be upward of $6 billion to samsung even so as fort samsung electronics as a company , this division is not doing that well and will hurt it, but the company is doing very well, partly because it is driven by other departments, like it's chip business, which is increasing at the moment due to demand. it posted its biggest operating profit in three years in january. he will get more detail on fourth-quarter results tomorrow when they will be releasing more information about the breakdown of the different divisions and how they performed. muchad: thank you very indeed. having a look at samsung and the message coming out, this news
conference earlier on suggesting , telling us where we were with that note 7 exploding battery issue. dubioustill ahead, a honor, hong kong holding on to its ranking as the most expensive housing market. we will have a look at why this is a constant headache. we will get the view on what lies ahead for u.s.-china relations as donald trump behind the white house office desk. ♪
do we have the share price? we don't. shares, onat toshiba the way up after the company , looking4.4 billion for a bailout. sending the new u.s. president an olive branch, on hisulating him inauguration. we have a look at state media taking a different tone. >> there is not one state media organ, or is there? they have many multiple organs that get their message out and send the different messages. i will get to the strident view in a minute. , one agencykend congratulated president trump hoping for a win-win cooperation
going forward with the united states. china daily said the tubing countries should strive for updated, more desirable version of globalization, so a similar message that president buzz,ping gave a doll saying trade wars will not benefit both countries and warned against rising protectionism. also in this article, various steps that china is trying to are foreign that investment environment in china by relaxing restrictions that foreigners have had in insurance, mutual funds, another areas restricted. china as i talk about the mixed message, leading up to this, china widely criticized the picks for donald trump's, calling the selection of peter navarro as economic advisor,
robert lighthizer as trade representative, wilbur ross at commerce, who said china was the most protectionist country, calling them the great wall of protectionism to trump, not to mention rex tillerson as well, critical of china's endeavors in the south china sea. rishaad: talking about the south china sea, it is a different tone geopolitically, isn't it? they always want economic cooperation and have benefited from that partnership. it is the geopolitical stuff that gets quite tricky. in that article, they also no sovereignty for their rights in the south china sea, and finally this other, people's daily editorial.
rishaad: quite different in their tone, aren't they? same oldut it is the stuff. i'm 50 years old and have been hearing this sense year zero. democracy has reached its thets, and deterioration is future of capitalism. you have heard it here first. rishaad: i have never heard that in my life. you hear something new every day. >> i take that back. you should read it. rishaad: right, thank you. rhetoric,st the same an olive branch in one hand, something the plo used years ago, an olive branch in one hand and a kalashnikov in the other. really trying to look at trumps rhetoric and have a talents to approach to it. hand, china is
concerned about what it considers its core interests, the south china sea, the east china sea, the issue around the taiwan. on the other hand, they are willing to potentially work on some of the economic issues. concerns inarger the region of months u.s. allies is that trump might seem to make a bargain on these economic trade some of the geopolitical issues for it. that is a big concern here. rishaad: well, tell me something, what happens next? everybody sets out and talks the talk, but they have to walk the walk as well, so there is room to compromise, isn't there? >> absolutely. i think there will be room to compromise on the economic issue. where i don't see room to compromise on the chinese side is the political side,
especially the south china sea. rex tillerson has talked about denying access -- [please stand by] it is strange how japan and australia are lobbying for it and saying they should still sign the tpp despite donald trump having no interest. is this deal dead or does it have to have the details changed in effectively be the same thing? there are ahink couple of different options on the tpp. one would be the other 11-country tpp without the u.s., but again it would lose a lot of value. said withoutr abe
the united states, the agreement has less meaning. also, a lot of the countries that negotiated the tpp negotiated and made concessions based on the u.s. taking part, so it is difficult not seeing the u.s. involved in it. the second part is to wait out president trump, hoping that later in his term that he might turn course on that are even wait until the next administration, the next election, and hope for a candidate that will be more amenable to the tpp, but the options are limited. me something here, if we look at the region as a whole, the whole burden sharing side of things with japan and trumpidentified by donald . do you have any further noises on this? >> yes, so in japan, they are looking at it from a couple of
different perspectives. from one perspective, the idea of host nations. domestically that would be difficult to sell, japan providing more financial assistance for host nations of when they already provide over half. where the compromise is likely to be will the focused on japan's own defense budget, potentially continuing to increase defense budgets, and also japan's role in the region, controversial and sensitive due to the competition, but that is another area that trump may look to press on. rishaad: ok, well, north korea, again, they have been threatening to have an icbm statesan have the united in its range. donald trump tweeted famously, that will not happen. but what will happen then? exactly.
this is the uncertainty and why i say we are not only in a post-truth era, but a post-nuance error, where we can take every tweet from the president as fact or policy. we are not sure what he means when he says it won't happen. statesat mean the united is planning covert or military action to preempt that? or does he just assumed the north does not have this capabilities? i think it will be a rocky road with north korea. the main thing his advisers should stress is the need to work try laterally with the south koreans and japanese and have a united deterrent front. they are conducting trilateral exercises at the moment, the three navies to work together, so that is a positive sign. indeed, there are a limited set of options available theim, but one of course is
leverage that china could bring to bear if it chose to. >> exactly. frame, china to has been the bogeyman for a number of different issues, and north korea as well for china not willing to step up to the plate and implement sanctions. i think he tends to over inflate that a little bit. , ita does have a large role is north korea's largest financial connection, but even china has had trouble dictating policy towards the regime, so while it is important to engage china and enlist china's support on the north korean issue come i don't believe that is a silver bullet. rishaad: will the next four transformation in global geopolitics from a unipolar world to one that is
bipolar or indeed multi-polar? think it will, and i think we are already seeing the signs of that, even in the obama administration. in principle, that is not a bad thing. with the rebalance to asia, the focus on a network security approach where allies and even china in certain respects can take leadership. what i see in a different manner anddrastically increasing allies and partners expected to take a very large burden sharing approach and coming years, and that will create uncertainty and potentially flashpoints. rishaad: jonathan, great talking to you, insights on the geopolitical situation. right, let's tell you about what we have, p prices, hong kong tops the list of the least afford housing markets. ♪
rishaad: the shortage of affordable housing in hong kong has long been a headache for the government, but it does not look like things will change anytime soon, the city retaining its first-place rank as the the most expensive housing market. this goes back, a bit of a black eye. claimuppose he could affordability improved marginally. years if you 18 use all of your income. rishaad: which is shocking, isn't it? >> it does not take into account how much you can borrow to do this. theact, the survey masked
fact that hong kong is less affordable to another cities because nobody can come up with a down payment. rishaad: that is the story they are not telling us? >> correct. rishaad: the point is we have a situation in hong kong where there is not enough housing coming on the market. some have said that ties between the government here and property developers is too tight. what is the narrative there? >> the government controls virtually all of the land and it decides which parcels to put up for tender every year. even if the government were to release a lot more land, the developers are in a position where they can time the market. complicating it now as that all the mainland developers are coming in and have been out hitting the locals, so you could argue that perhaps it is the and connected mainland
that is an added dynamic that needs to be taken into account. andoils down to supply demand. the other source of supply is redevelopment, but the government is making it harder for people to redevelop existing land because it forces them to still pay land premiums if they change their use. third, also a gateway city where chinese are big buyers. thank you very much indeed. weing a look at the strains have when it comes to housing in hong kong. we have a break, but on the other side, donald trump has not held back on china so far, but is there more bark than his bite when it comes to his currency comments.
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only xfinity gives you more to stream to any screen. download the xfinity tv app today. >> it is 10:29 a.m. in hong kong dime haidi lun the with first word headlines. says batteries were to blame for the note seven fiasco, overheating and fires caused by separation film in the batteries , which was too thin. crisis deepest business killed off its flagship smartphone and may have cost at $6 billion. the philippines finance secretary starts a visit to beijing today to discuss investment. china agreed to the deals during the president's trip in october,
openly courting beijing for help in rebuilding philippine infrastructure as part of the pivot away from washington. sayshairman of terra firma >> it will lead to dramatic changes in the u.k. economy. real wages could recline 30% over the next few decades with the interest rate rising. still he says the decision to leave the single market will ultimately benefit the u.k. economy and business. , and this is one of the strange things about business, i think it is bad for the majority of people, but for my business, it will probably be good. >> a new push to end the fighting in syria begins with russia turkey and iran holding with damascus and representatives of armed opposition groups in kazakhstan. the u.s. ambassador to
kazakhstan will attend the talks as an observer. it is not clear if the groups will meet face to face. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: well, i am rishaad salamat. let's have a look at markets, a mixed bag, yen strength taking its toll there for the japanese industries. 225 over 1%nikkei seenr after yen strength after the dollar faltering after donald trumps america first speech. the dollar fall against g-10 forex. against the yen, that is the chicken really where we are seeing that action, staying
below 114, coming off the .arlier session low the singaporean dollar strengthening as well, leading gains among southeast asian forex, and offshore yuan strengthening beyond the 6.84 level. a quick check on some equity in japan, a big , climbing 8%iba after reports that the company is seeking to raise 4.4 billion dollars to cover its nuclear write-down. on the risesharp after foxconn said it is andidering a u.s. plan, taiwan semiconductor adding the most points to the index, also taipeigest gainer on the
stocks there. this is broadly the view we have across the region. thank you very much indeed. right, the past two weeks have seen markets grappling with one big question, does the trump reflation trade have legs. inglis, one analyst is suggesting watching a particular currency. which one is it? dollar-yen. the reason we are watching this place toobviously a look because the dollar is the other side of the yen, but essentially looking at 115. things are happening and converging on 115, yields 2.5%, and the correlation between them the highest it has ever been. so let me start with this chart, the correlation is very tight. today, we were talking about
this, if we push above 115, that is a clear sign that the trump trade has regained some steam. look at this. our head at 115, and as this comes down, yields have also fallen, now pushing back towards 2.43%. that is one side of things. have a look at this other one. let me shift my charts quickly. this is quarterly correlation between the two. it goes all the way back to 1980, and it is at just about the highest level it has ever been. if you want to look short-term on correlation, the 40 day chart shows above .8, which is the level we have only been at four times. the correlation is quite strong. if yields go up, dollar-yen goes up, and if we see a decisive
therebove 115 and stay come a again, that is back. rishaad: tell me something, what about market positioning? where have we caught with that and what has it been looking like? right, the market when we talk about leverage, it is still short on the japanese yen. have a look at this data, backward looking, the week ending january 17. what we have seen as that even though the market is still net short on the japanese yen, and the short positions were built up when dollar-yen shot up to 118. we have seen two straight weeks where shorts have been covered as we went from 118 back down to where we are. i have to point out that this week, we will be watching yields
closely because we have a lot of options from the u.s., two-year, five-year, seven-year. , and obviously yields have gone up. and the take-up of these bond options has been good, so fourill be watching all ban for how much indication on appetite for yields, bonds at these levels. right, thanks a lot. actually, what do you know about the immediate impact on asian markets at the moment? if we did see the dollar rally continued, what is likely to happen? data shows it is outflows. every time the dollar moves up dayyields go up, the same outflows come out of stock markets in asia. have a look at data from last
week on each individual exchange. this is when yields went from , coming back a little bit, but the inverse correlation when it comes to out lows and the strength of the dollar is also very clear. rishaad: thanks, david. , we've been talking about him and his trade talk. it's a question about how that when heend to the u.k. sits down with theresa may to discuss a possible post-brexit trade deal. is with us in hong kong. tell us about trump and the anti-trade fire. >> thank you. it is great to be an hong kong with you all. what a terrific city and opportunity to look at the united states from the same
perspective and vantage point that the rest of the world does. campaignump on the trail, he was fiery on trade, seeking votes, representing the underrepresented rust belt, but he is in the white house now, giving an inaugural address in which he continued to pound the table. in the u.s., it was the fact that he hit it and hit it hard again. trade, onecision on taxes, on immigration, on foreign affairs will be made to benefit american workers and american families. we must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. and then this continued because the white house website is now reflecting donald trump's
abuse, where he and -- donald , where he intends to go, withdraw from tpp, renegotiate nafta if he cannot get a fair deal for workers. this chartook now at that shows what happened to u.s. exports to mexico, imports from mexico after nafta started, and it shows what happened to manufacturing workers as well, jobs lost, imports and exports have risen, but how much has been nafta, how much china injuring the wto. when they started out, they were accused of having a rigged important issue for the u.s. and mexico. 80% of mexico's exports go to the united states.
the mexican president will meet with donald trump on january 31. rishaad: theresa may heading to washington as well to talk about a trade deal with britain, so what do we know about this so far? said they house aide are hoping to lay the groundwork for a post-brexit trade deal. prime minister may says she wants to build on the special u.k.-u.s. relationship. australia said they are getting tradeto open talks on with the u.k., possibly on investment. theresa may has said the u.k. is open for business, and she's not just talking the talk. she is walking the walk. rishaad: it would seem that way. right, let's get back to the new president making no secret of his opinion when it comes to china and accusing them of currency manipulation. he is not the first president. and a lot of
change since then, but what is the biggest difference? bill clinton's administration label china a currency manipulator between 1992-1994. back then, the clinton offerstration was able to .hina access to wto the u.s. pushed back and said in reforms and your exchange rate mechanism, we will not support your candidacy, and reforms, respond with easier to buy u.s. goods and equipment, so china did meet the u.s. halfway. they did not meet all of the .equests
negotiation key tactic back then. rishaad: the chinese economy is barely recognizable. >> it is night and day. if the u.s. goes hard on tariffs , it might not have the same impact it would have 20 years ago. we know services are bigger than the manufacturing side of the economy. we know consumption is a key growth driver and exports were a net drag. wayrebalancing has a long to go, but they done enough to diversify things. tariffs,you get american consumers will not want to spend more money on their goods. it is one reason why companies are not interested in having new tariffs slapped on china. you would be targeting u.s. interests in china.
buyers. something like 21% on friday alone, a share price that has plunged already. they lost 45% of their worth last week. that is after the stock had been kicked in in the months before. isconn chairman terry gou said to be weighing a joint investment with apple in a u.s. display factory. saying the facility would cost more than $7 billion and could create 50,000 jobs. isle u.s. protectionism inevitable, american consumers may not be willing to pay higher prices for products made it home. remains thechat most popular app. the bigl survey showed
three internet companies dominate the market. after wechat, another tencent app was the second most widely used. right, the future of the tpp, or does it have one? be ad trump continuing to concern for businesses across the asia-pacific. , the agreementos once to be put into place says takeshi niinami. we need to consider before anything, but we would like to have integration more clearly. guy,he is a real business not a political person.
the foreign affairs, china, russia, i don't have a clear idea yet. >> what would you like to see more clear? that and what else? korea, southth korea, japan, it is a sensitive operation from a total view. stable or aake it more desirable environment? that is one of the major concern from my point of view. >> the president-elect's , theing secretary of state equivalent of your foreign minister of course, has a very clearly articulated view of what the united states should be doing in the south china sea to defend what we called the spratly islands on behalf of japan. do think that would be a wise move? >> this is a different concern.
falls into foreign affairs. we are now believing some possibility exists. idea.t have a clear >> what is clear is that donald trump does not support the tpp. it looks like that agreement is dead. companies, yours included, wanted to see the tpp. what would you like to see in its place? >> tpp is very important for the new generation of japanese industry. variousludes the business environments, so that is an important point. , that is anreement important point, so we would like to keep it. >> what if the trumpet
administration does not support it? is a big problem for us. japanese society still keeping clear intentions to extend it. >> if the tpp dies, what does that cost you in terms of revenue? >> not directly, but as you know, the current reason is one of the strong waves of the industry. that environment could create a new business opportunity, but some of them facing a big to deal with the debt. you have a train factory in the u.k.. how will that be affected by brexit? >> i don't have any direct thege at all because to 2019 oralready up
rishaad: singapore's unemployment stands at the highest in a years, but it is still easy to find the job. why is that the case? why do people in singapore have it easier than elsewhere? it's the fact that singapore has a tight labor market. unemployment at an eight year high, but just 2%. it has to do with the government putting a lid on foreign workers and immigration. in 2014, immigration became an election issue. in arms,ans were up saying foreigners were taking up a jobs and pushing up prices and causing congestion in public trains, so the government
stepped into a piece the people and put restrictions on foreign workers. are, a tight labor market, companies struggling to fill positions in services especially. slowing economy, singaporeans can find a job in eight weeks. those in australia need 16 weeks to secure. , all those who retired last year at 62 were rehired. i want to show you another bart chart. singapore and hong kong have the lowest long-term unemployment rates. silver lining, yes, but still a problem. singaporean workers have been left behind by technology. if they don't upgrade to her skills, they may find themselves without a job. rishaad: one country in this part of the world is having real trouble creating jobs. philippines,g the
an economy growing rapidly, one of the fastest in the world. it has huge advantages due to english proficiency and literacy as well. why is that the case? >> job creation is not keeping pace with the number of people looking for jobs. years, the three government has failed to provide a job to everyone entering the job market. it is find a job there, likely to be poor quality, and that's why millions of filipinos find work overseas. who can workhose have a job. in thailand and vietnam, it is closer to 70%. the president wants to create jobs, pretty ambitious, but he needs to do that. rishaad: right, bloomberg markets continues. sherry and looking at our top
stories, and what's on the way? , wey: samsung of course break down that investigation on what caused the fire on the note 7. they are saying it was faulty batteries. that is expected to cost more than 5 billion dollars for samsung. we are looking at winners and losers of a potential china-u.s. .rade war we breakdown what trumpet means for global trade -- what trump means for global trade. on bloomberg markets: asia. ♪
>> >> we are in the middle of the day. welcome to bloomberg markets: asia. ♪ samsung blames the overheating note seven fiasco o on batteries made by an affiliate. donald trump want release his tax returns as he offers up alternative fact. and on a portable hong kong, most extensive housing market for the seventh year in a row.
the lack of specifics on donald trump's inauguration speech shows this protective tone from donald trump. that is affecting marketeer here in asia and sending the dollar lower. was thisaw last week rebound in u.s. treasury yield. the treasury yields soared higher and the dollar fall off. this is an having anyone because we are seeing this reversal. this is seeing a reversal. this is having an impact on japanese yen, the currency we are seeing is this retreatment. the yen is strengthening again. look at the retreatment. this is showing the dollar and
yen support is there in the short-term. 112 technical levels must be breached if we see this reversal. this is increasing and gaining strength against the dollar. we will keep an eye on the markets because this is affecting what equity markets are doing. they are also losing ground. for now, let's get to first world news. eidi: they have lifted a grounding order in the u.s., having resolved problems from computer failure. they were grounded for about 2.5 hours. delays on81 sunday. those widespread delays and cancellations were on delta and southwest. president trump is breaking a campaign promise. top advisers are saying the white house has no intention of
releasing his tax returns. trade will dominate his first week in office. he is meeting with theresa may on friday. the president and his team are also stepping up their war with the u.s. media. president trump's picked for secretary of state is almost certain to be confirmed. john mccain and lindsey graham say that while both are concerned about rex tillerson, they are concerned about his relationship with russia most. the committee will vote on monday. this company is seeking $4.4 billion to cover its nuclear write-down. stake to a 20% generate 1.8 billion with potential investors including tokyo electron.
they are saying that toshiba is facing pressure to secure investment for british nuclear power projects. day, news, 24 hours a powered by with a 2600 journalists in more than 120 countries. this is bloomberg. sherry? that theamsung says batteries caused their galaxy note 7's to burst into flames. what exactly are they saying here? they say that these factors were part of the issue. because batteries to overheat and catch fire. -- this caused batteries to overheat and catch fire. it caused a short-circuit and it was a defective design. several agencies investigated the issue. they include ages like ul.
-- agencies like ul. they apologized for the galaxy note 7 issues in a press conference. this was a detailed investigation to the issue. they have a 20% stake in sdi. the replacement batteries that were made will actually also be faulty. that was because of a very quick necessary toat was try to replace the initial batch. samsung did say that they found the targets for the batteries. we are taking responsibility for our failure to ultimately identify and verify the issues. we're taken several corrective measures to make sure this never happens again. the fbi said that they have
invested about $130 million in are looking to design batteries better in the future. this is inspected to cost billions of dollars. >> it has not released its the impact of the guilty note 7 issue. but yes, there have been estimates of upwards of $6 billion of the financial impact for symptom -- samsung. this happened at the end of last year. they have posted very good results for the last quarter. the operating profit in three years came in at $7.8 billion. analysts say that shares are surging. essentially, it isn't doing so badly.
many profits have been driven by other divisions outside of electronics. it's other business is doing very well at the moment. tomorrow, the 24th of january, we will get a breakdown of the earnings to see what divisions did and how they performed. we will have more information tomorrow. sherry: i am very surprised how resilient they have been. thank you so much for joining us rosalind chin with the latest on samsung. china is offering an olive branch to donald trump and hoping for win-win relationships. democracy comes into the nude criticism of one state media -- renewed criticism. from the ramparts of china.
-- different parts of china. >> on the one hand, you had the congratulations from the likes of chinois. they congratulated trump on his inauguration. ephen: they are hoping for a cooperative relationship with donald trump in the future. the two countries should strive for a updated and more desirable version of globalization. this feeds into things. of stepsdecidedly kind that they are trying to take. they are trying to open up the economy to foreign investment. prying open sectors like have -- that have long been restricted like banking. they are trying to bolster the value of intellectual property rights which is a problem the united states has had. past editorials have had -- been 's fix.ritical of trump
they say that he is building a wall of protectionism. robert litan heiser, u.s. trade representative has been very radical of the currency policies in china. he said that china is more protectionist than any other country. then there is rex tillerson who has made those very interesting comments that they would not allow china to access the island that they are reclaiming in the south china sea. sherry: that issue and the one china policy in taiwan, that is something that china is not compromising. where do they draw the line with trump? >> they are seeking economic cooperation. that has been the bedrock of this relationship over the past couple of decades. stephen: economic gain for china
really. trump argued that we have been economically robbed. china says that on the geopolitical front, the one china policy and also the china sea, these are defining, cour interests. -- core interests. on the one hand, we like economic cooperation-- but democracy is dead they say. we're been hearing this for a long time. democracy has reached its limit. they have been saying that for years. sherry: they are very strong comments coming at a very tricky time. >> very tricky wording as well. they see what is happening in the united states, the social unrest as a failure of democracy where america was a that is a benefit of democracy.
we can demonstrate. sherry: thank you so much for that stephen engle. now the economic landscape in the trump era has been a topic for our guests as well. the peterson institute says that the president's policies won't work. >> it is going to be a boom bust cycle. you said that as you let into mr. fake, -- mr. fink's co mments. they can pay for what they are proposing. but they make it two years or three years of growth. since we are close to full employment anyways, we put probably get some dead we will probably get some wage growth. sherry: they expect markets to be muted in the first part of the year. you may have a good
second half in 2017. i think the first half will be somewhat disappointing. not terribly disappointed, i stay interest rates will low. i don't have a problem with the bond trade. i think the 10 year will probably go down to 220. a lot of these programs are going to take longer to take affect. >> the cancel of foreign relations, jonathan miller says that we could see some deals. there is a long way to go and others. >> there is room to copper mice on the economic issue. tore i don't see what compromise is on the geopolitical side. especially in the south china sea. the secretary of state nominee rex tillerson has talked about denying access of some of china possibly claimed reach. this will probably come to a
head if they try to implement that. sherry: that is the word from asia. we are seeing words from asia looking a little bit mixed. japan just reached a regional benchmark. let's check in on the markets now. phie: with that resilience, we are seeing asian stocks bounce back from a two-day drop. led primarily by text stocks, we are seeing that on the clock speech. samsung is picking up the lion share. are up about 9/10 of a percent. heading for the highest gross since june, 2015. they add to 22 point for the index. -- they added 22 points for the index. china is leaving the advance in terms of points. this debuted in shanghai today.
the stock was suspended after it search by 24% daily limit. that is the transfer debuts in this market. australia, a weaker down. away.ell this one is deepening its drop. this is after it downgraded its proper guidance. there has been an advanced in gold prices. the market is closed for lunch. we did have a good day. chief said that they will monitor the impact of a trump administration. also, his pledge to make america worries aboutng protectionism. we are seeing japanese autos .all
ry: welcome back, this is bloomberg markets: asia. a quick check of the latest business flash headlines. airbag maker takatary: welcome s bloomberg markets: asia. is having another bad day. another fall by the limit is in the cards with sellers again. they are basset hound number and buyers. 21% on friday
alone. shares have plunged on court led bankruptcy. lost 45% of their warmth since last monday. quote themeview saying that the facility will cause more than $7 billion and could create 50,000 jobs. they are quoted saying that while u.s. protectionism is , consumers may not be willing to pay higher prices for products made at home. utility companies in california are seeking $1 billion to remote electric cars. they are looking to boost spending on charging stations. to me, the goal of 1.5 million zero emission cars on the road by 2025. california is pushing forward on cutting greenhouse gas emissions despite donald trump's promises
to kill this at the federal level. let's get back to the markets. our next guest is all about diversification right now. drys keeping himself powder and having a reasonable cash balance. joining us now is mark franklin. thank you so much for joining us. let's talk about this reversal in the dollar strength we are seeing. we are seeing a correction in the dollar. even that investors are still a few dollars short of the are we seeing more room for decline? short in thea big u.s. treasury. i think what we are seeing now has found some of that shorting position. people taking slightly more balanced approach toward global currencies beyond this. sherry: given how volatile this
has been on the movement of the dollar, we are seeing all of this reaction in asia, how do you assess a risk asset for this year? be a i think there will lot of volatility this year. a lot of economic variables at this point. we are in uncharted territory with a new residency and administration. i think there is a very important niche for the diversification. there are some relatively low cash like instrument as well. having some kind of sector breath in your portfolios is important. sherry: we'll see more risk premium this year. mark: yes, i think so. time, there will be
some volatility from one month to the next. you are an investor and you see these tweets coming from trump, we are not expected up to go away anytime soon. does thisf a risk carried when so much can change day today on whatever the new president says? mark: you have to look at the new approach to communication. that is a modern approach to communication. from the financial perspective, that is volatile. but it is in keeping with how the world is evolving. sometimes, it makes sense to take a counterintuitive approach in reaction to some of these tweets. military spending angle for example. i see that as a sign that there will be a big increase in military spending over the next couple of years. what they're trying to do is get the first blow and in order to
say we are going to give you more contracts over the next four years. over this weekend, trump talked about achieving energy independence. is this feasible given how interlinked the u.s. as to the global energy markets? what would this mean for prices going forward? i think we are seen a show revolution over the next couple of years. this back down. kindare moving toward some of energy and dependents where back in the 1970's, it was part of the cartel. i think longer-term, what we're trying to see from this is policies that will make it easier for the u.s. to get new licenses and environmental clearances. we're likely to see them in the energy . sherry: let's talk about trump
sherry: welcome back to bloomberg markets: asia. the shortage of affordable housing in hong kong has long been a headache for the government. it looks like things won't be changing anytime seven. expensiveetained its housing market in a new survey. this.ick has more on i remember going out to the occupy hong kong movement about two years ago. everybody who complained about they will to buy a house. >> i think there are two
problems. one is that the government has not released enough land supply. simple economics. not enough houses are being built and too many people want to buy them. the other thing that is thereing is that because is a very strict mortgage limits on how much you can do. it means the people can come up with down payments. lookseport ability survey at median incomes and the median price of a house. what it doesn't take into account is the fact that you have to have a huge pool of savings before you can get on the property ladder. that is something that people were worried about during occupied. how expensivee they are. we are not talking about property prices. rent as well. they just hike my rent. pretty painful for us living in hong kong. what is the survey not telling us? >> it is not telling us about the mortgage aspect. all it is looking at is the
average income and price. if you spend all your income on housing, it would take you 18 years here in hong kong. that compares with something like seven in london, new york is very affordable, an interesting thing about the survey is that it is 406 cities. the top trends are in asia or the gateway cities. number two is sydney. a popular destination. number three is vancouver. that is a hugely popular place with asian buyers. many chinese and mainland people are buying those properties. some of those are pretty upset about that. >> as a matter of fact, vancouver follows hong kong's. lead. people just incorporate that into the cost of purchasing a house. it doesn't really deter buyers.
♪ is 11:29 a.m. in hong kong, 12:29 p.m. in tokyo. i am haidi lun. samsung says batteries made by an affiliate were to blame for its note 7 crisis, caused by separation film in the batteries, which was too thin. the company promised to strengthen that a safety. the crisis killed off and it's and cost thetphone company $6 billion. yahoo!sive breaches at are being looked at and whether
the company should have reported the hacks earlier. breachthought the 2014 affected fewer than 500 million users it eventually disclosed. the philippines finance secretary in beijing to discuss $15 billion worth of investment. china agreed to the deals in october. the philippine president is open according beijing as part of its pivot away from washington. a new push to end the fighting in syria begins monday with russia, turkey and iran holding talks in kazakhstan with the damascus and armed opposition groups. the u.s. has been out of the loop sensor relations with russia deteriorated before the election, although the u.s. ambassador to kazakhstan will attend as an observer. 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.
we are seeing bonds rally from australia, japan to investors seeking safety. let's get a check of the market action with sophie kamaruddin. sophie: before we check in on that rally and bonds, the nikkei 225 online after the break, dropping over 1% as yen the of dragging on japanese shares, the taiwanese index leading gains in the region, and the shanghai composite up .3%, a day of swings for kospi. bonds, that rally in monday trade gather strength, , theickup in treasuries 10 year yield falling on that. the gains a reflection that
concerns over trump economic thes will take time given america first pledge. s&p 500 futures indicating a weaker open, a reversal from the rally on friday. safety buying giving support to gold and the yen. steam,at dollar losing weaker against g-10 peers. falling for a third straight day, they yen adding to friday's advance. headed for then highest close in two months after a stronger fixing from the pboc today, the first time in three days. have beeny movers we watching in asia, toshiba adding -- 8.5%ter reports after reports it is seeking to raise $4.4 billion to offset its nuclear write-down. sharp gaining given what foxconn insaying, investing jointly
a u.s. plant. and brambles the biggest the kleiner, deepening the drop after a trading update today saying it has revised profit forecast downward given weakness in its u.s. operations. you.: thank the unwinding of this reflation thistment continuing monday, so is the trump trade really over? let's find out from david in glass in singapore. one analyst at least suggesting dollar-yen is a clue. but what is 115, happening this morning, and we started talking about it, we were close to 115, so the thinking here. if dollar-yen goes back above 115, the sign the trump trade is back on course.
today's trade, fading fortunes, a sign the early enthusiasm has fizzled out. again, 115, but who knows really? the reason we are watching this closely is because yields this last week in the u.s., coming back. this correlation between dollar-yen and yields in the u.s. is as close as it has been on record. in fact, let me change this up quickly and show you what that looks like. correlation, 20-day, what ever you choose, this one is 40-day correlation, back above the yellow line. we have traded above that line only four times in the last 15 years. the reason 115 is quite is that this
correlation is very strong. once yields pick up this week, very important option in the day, two two days, 1-5 17-day. one seven-day. analysts saying if you look at fibonacci retracement analysis, short-term support for it. let's talk about the dollar weakness, a lot of it stemming from trump's inauguration speech and what he did not say basically. yeah, well, first things first, it is too early to talk fibonacci. it is only monday. when it comes to wednesday, we can talk about retracement levels. that being said, have a look at the yen, dollar-yen, a three-month chart here. to extrapolate from what is happening today, what was in
said during the speech, that is exactly what a lot of these traitors we talked to this morning, basically saying the dollar is up heavily because we did not get the details of what would have supported, or the hope we would get something from that speech on how to make the dollar great again, this pomp priming program. we did not get anything. we got something, but not sufficient enough to keep the streak going. so at the moment, very short-term. one trader told us 115 point 50, that is the level when you get that on dollar-yen, we see heavy selling across these leverage markets. not always the fibonacci retracement, but how are investors positioned on the yen? still net short,
but we have seen the short positions get covered essentially. to 118,en went from 100 short positions built up from november to where we are. those short positions have been covered, data ending last tuesday or wednesday. thank you so much. david in glass with the latest on the dollar-yen trade. it is all about donald trump, who is now in the white house, the world's biggest companies trying to gauge the likelihood of the u.s. trade war with china. there could be losers on both sides. our bloomberg markets reporter has more on this. how are the markets rising in this potential trade war? >> we talked to analysts and strategists in the past few days, and they are warning the markets in both china and the united states are yet to price of ae significant impact
rising trade dispute between the two largest economies. shery: how do they think the market will cope in a worst-case scenario? say a trade war breaks out and we have retaliation from both sides? their wares to case scenario, morgan stanley sees , loving 45% tax on imported goods on each other. indexescase, the msci likely to fall 40% from its current level. the shanghai composite index may the 2008all below hundred level, 10% from the current level. shery: we have heard about the 45% tariffs, but at least trump has not mentioned that again. when it comes to potential trade wars, who could be most affected? >> from that china perspective,
the producers, consumer electronics, apparel, those kinds of products are among the most exported goods to the u.s.. those makers would have been impacted, so companies like lenovo would be among the biggest losers. side, electronics companies that derived by large share of revenue from the china markets could be among the biggest losers. some brands in the u.s. like nike, general motors, tiffany, so people are thinking there a reduction in chinese customers with rising tensions between the two countries. shery: thank you so much for joining us.
our china markets reporter on what we can expect from trade tensions between china and the u.s., or potential tensions there. let's talk about another huge topic, brexit, the head of one against private equity firms expects brexit to be bad for the country, but good for his business. irra firma's chairman says withdraw from the eu will mean opportunities for firms like his. >> of course britain will continue to borrow money, and we fact we are in the european union, so people will put a risk premium on that. interest rates will go up. that will lead to bankruptcies, and it would lead to opportunity, so sadly, and this is always one of the strange things about business, i think it is probably bad for the majority of people and bad for the country, but for my business, it will probably be good. >> on what kind of scale?
how good does it get? give me some other numbers. you talk about interest rates going up to how high what they have to go? >> when i talk about a 30% reduction, i'm talking about in real terms over 20 years. -- not quick, slow. , thatms of interest rates will take some time as well, but the u.k. at some point will have , people talk about the j-curve, it has never worked in the u.k. in terms of thy way should. the u.k. did it for 200 years, constantly evaluating -- evaluating. foronly way we could pay debts was to increase interest rates, so how much, i don't know, but the differential
shery: welcome back. this is "bloomberg markets: asia." i am shery ahn. arabia's energy minister says opec and other oil producers have already cut supply by 1.5 million barrels a anyway first, more than 80% of their collective target under last year's deal to stabilize prices. it is one of the best agreements producers have had. a meeting in vn at agreed on
monitoring to ensure 100% compliance. wechat the most popular app, 80% of the population. showed the bigy three internet companies dominating the market. tencent app another was the second most widely used. alibaba third, and baidu's mobile app. split top the north american box office, raking in $40 million over the weekend. the movie was directed and stars with 24 different personalities who kidnaps three girls. sequel came in second with about $20 million. welcome back. joining me is a portfolio
manager and my other guests. thank you for coming in here. we have two special guest. let's talk about tromp, china, trade protectionism -- tromp, china, trade or texan is in. as one of your key risks for 2017. ump you gauge where tr stands now with trade with other nations and withdrawing from the tpp. will rcep take its place? a the base case is not broad-based move towards protectionism. i think it will be selected and targeted. i think he will renegotiate nafta, so selective industries. >> do you think that what he really wants is to keep trade .eals in place
it's more like surgery, rather than chopping off the leg, cosmetic surgery. >> i think that president trump, he is pro-business, pro-free markets, pro-deregulation, so what he feels is that the trade agreements the u.s. has signed have had more headwinds for the u.s. economy and workers, so he fors to get a better deal the u.s. economy and u.s. workers. >> he has threatened upwards of 45% tariffs. how realistic is that if he is pro-business and the need for the u.s. consumer to have consumer goods. talk about reflationary. >> i think it is difficult to impose harsh tariffs on an economy and not expect a response. i think he will go after the steel industry.
the chinese industry are already thinking about re-rationalizing the supply side. chinesel not hurt the economy that much. >> you do think protectionism will be a key, big issue for next year, so what are they? be a big issue. theoretically, there is always a risk. 2017 isone key for re-militarization. we are repositioning around the theme of militarization. ump is surrounding himself with people who have hawkish positions towards china. i think military spending is going up, so you want to position yourself around increased u.s. spending. japan, soso china,
where do investors go in those markets to find those opportunities? >> where you see earnings momentum and evaluation. to 2016 as nice end a result of currency, but the yen's moves in the last few days , some depreciation against the dollar. earnings are going up, so you want to position around contracts. .> i'm the fed person here i have to ask you about the french elections. it was the stealth issue coming into 2017, but a lot of people are saying april 23, that's when they vote, this is something potentially one of the biggest investment risks for 2017, do you agree? rounds of theo presidential election, a runoff of 5-6 candidates, than the top to go to the final round.
my expectation is marine le pen wins the first round him a but below 30%. what we will see is a combination of centrist parties ganging up on her to win the presidential election, so my expectation is that she does not win. the dutch general election on march the 15, we have to watch that, because the freedom party is ahead in the polls right now. >> the british prime minister also meeting with donald trump, what can she get out of that meeting? would you position against more weakness in the pound? i think what they're looking to do is build a personal relationship. trump has referred to the reagan-thatcher years. clearly they are two different personalities and did not get off to the best of starts during the campaign, so let's build some goodwill there and talk about trade down the line.
cannot form a trade agreement with the u.k. until it leaves the eu. >> we will hear about that tomorrow from the supreme court in the u.k.? >> the supreme court is hearing the appeal that the government launched that parliament had to approve the brexit trigger. i would expect them to uphold that judgment with a slightly more split vote. in the short-term, the pound rallies against the dollar. >> there have been so many signals in business, at least in terms of optimism, is there a risk that the fed has to tighten more? >> the most important data point was that business optimism index , something like 105, the highest level since 2004, and exciting number. if you look at what happened there, small businesses, it would take time for deregulation to reach the real economy, so my
hunch is we are starting to see a positive inflationary cycle, but some of those rate hikes make it carried over into 2018. >> every time we have this optimism over rate hike's, it in's up not happening. thank you for joining us. always a pleasure to talk to you. coming up, you're hired. we will look at why singapore may be one of the world's easier places to find work. this is bloomberg. ♪
why do people in singapore have it easier than elsewhere. haslinda: it has a tight labor market. we talked about how unemployment is at an eight year high, but it is just 2%, very low. it has to do with the government putting a lid on government and immigration. singaporeans were saying foreigners were taking jobs, pushing up property prices, causing congestion and public trains. they put restrictions on foreign workers, so here we are with a tight labor market, companies struggling to fill positions, especially the services sector. i want to show you this bart chart. singaporeans can find a job and just eight weeks. those in other developed markets need 16 weeks.
atost all those who retired age 62 were also rehired, so older workers are also finding jobs. here is another chart, singapore and hong kong have the lowest long-term unemployment rate. there is still a problem. singaporean workers have been left behind by technology. if they don't upgrade their skills, they will be left behind. this is an economy, the philippines, one of the fastest-growing in the world, and yet still having trouble creating jobs. why is that? singaporehere we have and the philippines, job creation is not keeping pace with the number of people looking for jobs. the problem in the philippines is that the government has failed to provide a job to everyone entering the job market. a job, it isd
likely to be of poor quality. of reason why millions filipinos find work overseas, even though gdp are among the highest in asia at 7%, only 60% of those who can find work actually have jobs. vietnam, thailand, indonesia, at least 70%. they are trying to create about 1.5 million jobs a year. it will be difficult, but something the president has to do, and he wants to look at tourism and manufacturing to help him do that. you so much. bloomberg markets: middle east is coming up at the top of the hour. i couple of big interviews coming up? is the keyword or do we continue to talk about the policy fallout on the u.s. and the rest of the world. credit suisse joins us for that conversation. bank, the ceo joins