tv Bloomberg Daybreak Asia Bloomberg March 28, 2017 7:00pm-9:01pm EDT
♪ said to-pacific markets follow wall street higher come all following consumer confidence in the u.s. economy. >> tesla when the vote of confidence from china and tencent buys a stick. >> trump says he is ending the war on coal. theresa may will trigger brexit in the next coming hours. we have world coverage on at daybreak asia, live from tokyo
to discuss the latest on toshiba's struggling nuclear unit. we will also be in beijing on tencent's latest that. >> and we will have the latest on president trump's energy policies and comments from the fed. --it two or three rate hikes more rate hikes, we should say? i am betty liu here in new york where it is just after 7:00 p.m. and it is just after 7:00 a.m. here in hong kong, i am yvonne man. betty: it is so interesting how investors can see this turn on a dime. one minute we are talking about is reflation over and then, it is back. we are going to hear more from said officials later this week. that will hopefully add some clarity to the outlook. for today, consumer confidence
really juiced up the markets behind this rally. yvonne: it was the data that reese byrd this rebalance. take a look at how things are looking in the asia-pacific. it was like a flip of the switch. the dollar rose and the banks rebounding white a bit. we are seeing stocks quite positive at the start in new zealand at 4/10 of 1%. on than currencies, cautiousness coming forward. australia we did see commodities advance after falling for six sessions. oil also back above $48 a barrel. we did see disruptions in libya. at the open, pretty much flat, 7636 for the aussie at the start. dollar-yen around the 111 territory. looked like a soft open in tokyo in terms of the nikkei futures and what they are signaling out of chicago this morning.
betty, if it is not trump getting the boot, it is this reflation trail having further to go. betty: don't forget we have brexit coming in a few hours. that is likely going to give investors another case of heartburn. you can imagine. yvonne: we will see how much has been priced in. we did know -- it did not know it was ineffective for the 29th of march. a stake in tesla, a 5% stake in the automaker. let's go to tom mackenzie he has been following this for us. how significant is this a of confidence for elon musk and tesla? are it is a boost, they burning through their cache files as they try to get their model 3 out this year. that is the ambition of elon musk.
the money and investment comes at a convenient time. tencent invested about $1.8 billion in the open market, and the share market we had earlier this month. it is a mass-market lower-priced electric sedan mosque wants to roll out. , it has to their portfolio of investment in technologies helping to shakeup the markets. for example, right hailing, they have some investments in didi chuxing, artificial intelligence, and mapmakers. it fits into the portfolio tencent is putting together. we heard previously from tencent developy think they may their own artificial intelligence for the u.s. auto industry. something alibaba is doing, as well. this is a positive, popping
yesterday to near record highs at the back of this investment. betty: certainly a cash infusion from a very important company. what does it mean for tesla to push into the chinese market, tom? david: bloomberg reached out to the north largest investor. what they said was that this will open the door for the model three in china, tencent's connections will help with that. tencent is famous for its wechat app. 50 million over users. in terms of branding potential, that is huge. teslahing to push the rand. we have seen its sales pick up to about $1 billion in 2016, almost three times from the
previous year so they are growing. on the road teslas in china. according to some researchers, in the first two months of 2017, they sold four times what they did the previous year. of course it will be key to focus on its model 3 series. if they do get it out this year, investors positive about this between tencent and tesla. yvonne: thank you. let's get the first word news. the u.k. will trigger brexit in the next few hours, launching at least two years of negotiations with the european union. 44 years of ties will unravel with the ambassador to the e.u. will invoke article 50 of the lisp on treating. that should happen at lunchtime in brussels and they will address the house of commons at the same time. president trump has an executive
order to roll back his predecessor's carbon cutting commitment. trump promises fossil fuel resources, to combat climate change -- trump has called climate change a hoax and wants to read orient -- reorient policy. >> we already have a devastating anti-coal regulation. i am following through on my promise. my administration is putting an end to the war on coal. oal.ill have really clean c >> turkey's government has criticized an executive at a state owned bank about trade sanctions with iran. accused of conspiring with an iranian turkish gold trader. they sold 1.2% following news of
the arrest. halting at least 20% of coal. at the mine.ended 26% ofion is on hold, salable output according to bloomberg's calculations. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. betty: thank you so much. let's get more on this big rally we saw today. -- a spike in consumer confidence, a 16 year high. oliver joining us. what happened? oliver: of trump rally is back. betty: are we going crazy?
oliver: bottom line, we had a little weakness in the past week. becauseday here today there were some centers that showed weakness, sectors that had been pillars like financial companies leading the market higher. we have goldman, jp, bank of america, wells fargo. bank of america with a big jump. they had been hit hard a few days ago when bond yields were headed downward. we see strengthen the commodities space. ultimately, a solid day here. we will bring in a question of whether or not reflation trade is dependent on trump, and make things the murky after friday. tt will be important to suss ou which are moving higher. we saw strengthen the commodities space. the first time it has gone up to
this degree in a long time. it is been having an effect on energy companies pulling them down. those bounced back today. a lot of tension as to how low oil prices to go, if we are at the start of a bear market like we saw in 2015. if we get some of the strength on the table back in oil it will help the stocks. it has been overlooked. we cannot forget about oil, at the end of the day. it is a risk on sentiment that will affect markets. hurtingsome weakness some of those yield dividends. who exactly is buying at the moment? oliver: everyone is talking about buying at the dip. we had a story on this today and it exhibits largely with this chart on the bloomberg terminal.
is a lot ofn short retail buyers have taken place in the markets its november. if you look at net asset value, the big s&p 500 trust, you can see this area since november. .y. inflows into the s.p at the end of the day, this is a preferred investing vehicle for much of the investing space. you have to wonder how much mom-and-pop are taking place in the market. you see stocks as a percent of access held by households. there are cash levels coming out and consumers. we saw another consumer index level today. i think that is a big part of the market as well. yvonne: still ahead, facing the fallout. possible anchored the of toshiba's nuclear unit, what it means for the energy market. betty: find out why green
is daybreak asia, i am yvonne man in hong kong. betty: and i am betty liu in new york. the stocks rallying for the first time in nine sessions. rallying at a six week low. americans increasingly up the about the strength of the economy. consumer to the conference board, spike to its highest level in more than 16 years. let's bring in the head of macro strategy at green capital. peter, are you is cheered by these numbers as the markets were? >> no, i am more cautious after the events of last week. i do not think we will get enough information from d.c. quickly. we look at financials and value
stocks, they came back to levels last seen in december. a second chance to participate in the trump rally. betty: are we stuck in this rally -- range? peter: i think we are. there is hope down the road is something good comes from d.c. betty: i want to talk about the dollar. a lot of this has been fueling the dollar or taking the steam out of this rally. i want to pull up this chart that shows, even with all the volatility here, the net bullish dollar that has stayed pretty high. at least throughout the last 12 months. we are not quite at the levels they were earlier this year, but relatively high. you do not think there is a reason they should be? peter: no, i think people should be pulling back from dollar bets.
partly as tax works out, i do not think we will see the b.a.t. come through. betty: why not? difficultis a negotiation, maybe 5%, not 15%. krump will resort to a wea dollar policy. any time you see delays, they will push a weak dollar story so we can get better trade. betty: what about the fed hiking rates and that impact? peter: i think they will because us. they say it may slow things down. if we are slowing down when ecb pulls back, i think they would like to be more aggressive. the fed is not the only hiking game in town. stuff that is overly priced in for dollar strength will get pulled back. betty: when you say dollar decline, what are we talking about? peter: a 2% to 4% move, nothing
major. we are range-bound, you will go up and down. volatility remains stamp across all asset classes. mentioned a bit about these policy diversions, trade. how big of a risk is it? as you mentioned, the fed was the only game in town. now we are complacent when it comes to where the ecb end boj is going to go. when do we price that in? peter: i think it will star gradually. we are seeing a little bit in europe. the biggest disconnect, so my problems in europe for so long people are in the nile that there could be real growth in real inflation there. at that is my surprise from the upside of equities and downside of bonds in europe where they do get a break and have real growth, real strength. the markets are not prepared for that. with theresa may finally
pulling the trigger on article 50, has this been priced in? we expecting major moves from europe? expectingare not major moves. the statement will be telling, what they are looking for. what it is up to a two-year negotiation process. they will look for wiggle room overtime. i would be surprised if we see the market move on the actual filing. i want to move closer with the boj. we see communication with policy makers when it comes to the bond purchase program, the commitment to the 10 year yield capping around 0%. what does the need to do? do they need to raise that target? peter: it seems like that. since november it has been above 0%, ranges between five and 10 basis points, of late. this is a bit surprising. maybe they will join arrest and talk about a higher bound and
give themselves more wiggle room. it is embarrassing, the market wasn't december field it -- believed it was an upper bound. since then they have what it dressed in a have not been defending it. at some point be attention will turn to the boj. they will say, are you serious about this or in a tightening mode? yvonne: great to have you, head of macro strategies at green capital. we will be live at credit spaces asia conference throughout the morning. we will look at the outlook for india, the india governments chief financial advisor at a: 40 hong kong time. woodside ceo peter coleman a.m. -- 8:hat a: 40 40 a.m. in the u.s. that is 12:40 a.m. in new york.
the first of china's biggest banks has reported results in profits as agricultural bank of china rose 1.9% last year to nearly $25 billion. that is nearly 4% above what analysts expected. the smaller rival, bank of communications posted earnings that beat estimates. betty: china's most indebted developers said profits fell when soaring costs overshadowed sales. it fell to $740 million in the 12 months since december. but 1.5 the year earlier. finances jumped during that period. they are looking at all options for a stake in a copper mine in indonesia. and atuation is fluid
eliminating obama-era regulations. remy innocent deal what happened at the epa today. >> it is no surprise, donald trump did campaign on the road -- the return of coal mining jobs and that is a fulfillment of his campaign thomas. he talked about a new energy revolution. he is talking about it as a resurgence of old energy with coal and gas. he says he wants to end the so-called war on mining. let's take a listen. >> the miners told me about the attacks on their jobs and efforts to shut down their way of life. i made them this promise. we will put our miners back to work. >> donald trump pushing jobs as he has campaigned on. it is a question of presidential and party priorities.
mr. obama, a democrat, had climate and health care on the platform. donald trump and the gop have jobs more so and -- jobs more than climate in this case. let's look at the specifics in terms of the near term and long-term. let's go to the near term first. what could happen immediately here is that the rollback of the consideration of climate change in terms of environmental reviews by the federal government is one thing. another that could be rolled back is the moratorium or ending of the sale of rights to extract coal from federal land. the results of the social cost of carbon, the metric the obama administration put into place to estimate economic losses from greenhouse gas emissions. what could happen later are these things. this is the clean power plan that cuts greenhouse gases from electricity produced by fossil fuels.
federal requirements for hydraulic fraction could be rescinded as well as the mission goals and gas rules that pertain to methane. this could happen in the near term and long-term. we are sure what will happen first. one thing i know from people we have talked with, we can expect lots of legal action. yvonne: as the president's revise therder is to coal industry and create jobs, can donald trump come out victorious? >> he is hoping so with what he is trying to do here. it is a campaign promise. it seems like the devil will be in the details. bloomberg intelligence i spoke with rob barnett, our senior energy analyst and he said he does not think this is going to go very are in terms of rebooting the coal industry. one reason, the natural gas industry is seeing a boon in
terms of the falling price of gas. hop into the bloomberg. the white line is the price of natural gas. you can see it has been falling over the past 10 years, 59% down in the past decade. people wanting to use it, you can see that is where people are going. hop into another bloomberg terminal. i want to bring this to you, you can see where the coal mines are happening in terms of the united states. you can see were donald trump did see a boom in terms of election results. that is where he is trying to deliver promises. yvonne: we will talk more about trumps policies. and advisor to senator marco rubio's campaign will join us live this morning at 8:30 a.m. hong kong time.
>> a pretty cloudy day in hong kong. city,.m. wednesday in the 30 minutes away from asia's first major market open. p.m. tuesday7:30 here in new york where the markets did close higher. and all clear ahead for the bulls today. i am betty liu in new york area -- new york. yvonne: i am yvonne man in hong kong. won a vote ofas confidence from china with tencent buying a 5% stake in
tesla 41 $.8 billion. they will introduce a lower-priced model 3. they have been investing in technologies that are reshaping the auto industry including ridesharing apps and artificial intelligence for driverless cars. millionrgo has a 110 dollar lawsuit. a regulator has criticized the bank for an extensive and pervasive pattern of discriminatory and illegal lending processes pending years. they were faulted over their treatment of minorities, military personnel, and others. a nuclear paddle has scored a win in japan with a judge ruling against the starting. the osaka high court removed an injunction that has prevented an takahama.ompany in
opposition among voters is strong following the disaster of 2011. north korea has launched a new flight to china, taking a number of foreign invest -- destinations to five. it is roughly a 50 minute flight from pyongyang. they also go to beijing and others. headlines when they were awarded just one star, the only carrier in the world at that level. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. nina, this is bloomberg. yvonne: let's see how the asian markets are shaping up this wednesday morning. >> we did see stocks on wall street up for a second time in nine sessions.
that rally expected to continue into asia. stocks in wellington up for a second day. australia testing the year to date high. 58, 59 level we last saw in may 2015. the dollar rising for this first day in three. we see the dollar-yen pushback over 111. kiwi,ds, the aussie and the fed chair said two more rate hikes could be about right. in the commodity space we see gold steady near a one-month high. oil carrying some of its gains on news libya is cutting shipments from it biggest oilfield. we see rebounds with copper metal at its lowest level in two weeks. let's take a look at how that is
potentially fueling what tokyo may see at the open. taking a look at the futures board, we are likely seeing a gaze across the board in asia here. global stocks on course for a fifth straight monthly rise. have japan retail sales are in a half hour as well as the rate decision out of thailand. and economic data out of vietnam. let's take a look at what is moving in australia. movingcyclone debbie through the northeastern coast, harming 20% of coal output in australia's largest basin. it is still up 7/10 of 1%. specificok at the movers in australia.
let's look at this function on the terminal. one of the highlights today is what is going on -- hang on, let me just move that and see what is going on at the year to date. i am sorry, the one day. this is up 3.3%. media rising to the highest in a year, reporting capital may have bought a 4.9% stake in fairfax. is likely toaid it miss its five-year sales targets. yvonne: thank you so much. sophie kamaruddin with a look at the markets. we will be watching shares of toshiba when tokyo opens in less than 30 minutes from now. with its nuclear unit, westinghouse said to be filing for bankruptcy any day, any moment. westinghouse has struggled with reactors in georgia, south carolina.
there was a $4.4 billion loss. ofning us now is the head research at nuclear. thank you so much for joining us. a lot can happen in the next few hours. first off, in the u.s., tommy what the fallout will be once we get this? industry in the united states is under attack by several different things. one, we have inexpensive natural gas and we have intermittent renewables eroding profits. many people in the industry are looking for new construction projects in georgia and south carolina to restart interest by redesigning capable and wonderful nuclear reactors. the fact that we have had problems with that is a serious blow to the industry because it was a pathway forward. the possibility exists that not only will plans in the u.s. or
utilities in the u.s. think second and third times about dealing -- building these kinds of plants in the u.s. it may happen overseas, as well. betty: it is such a controversial issue, building a nuclear plant. people say not in my back yard, right? who will be hurt or brought down along with westinghouse? >> probably the people that will be hurt the most will be the rate payers and shareholders of the utilities that are going to be in trouble. the fixed-price contract to that westinghouse signed limits the liability or risk to the utility, but if the losses are if anotherould -- company is stronger, they could withstand. they have a company guaranteed loan for $3.8 billion. they are it risk because they are a small utility and do have
a fixed-price contract. nevertheless there are rate payers that may pay for that. i thought it was very interesting in terms of the involvement of the department of energy. does this have wider implications now? the fallout of toshiba and westinghouse, will that give ammunition for donald trump to criticize japanese firms operating in the u.s.? >> it certainly could give opposition. trump is not in favor of providing subsidies to energy mark -- companies with this free market approach. however, who knows where this will lead. and to what extent the final situation will be with westinghouse. are a lot of things unresolved yet and we are waiting to see the final paperwork when we do file the bankruptcy. betty: a lot of voices are weighing in, lots of tweets quoting white house officials,
this is also an issue of national security. is it? it certainly is an issue of national security because for a variety of different reasons, and energy security point of view. nuclear plants are powerful sources of energy and we would like to have a robust nuclear power industry in this country for security purposes. it is important if you are going to have a strong international influence, from an energy security point of view these are hundred year relationships that a vendor has with a host country. we need a strong domestic industry as a basis to go ahead and develop international export opportunities which is part of the trump's interest. it seems like the russians, chinese, and koreans will be dominating the nuclear export markets. face of some the
security issues perhaps we want to address. yvonne: who may step into westinghouse's role? westinghouse is a fuel supplier, i understand they supply one third of the fuel for french reactors. westinghouse should perhaps stay with its business of fuel supply and also go ahead and design nuclear power plants. they have a very well respected nuclear reactor. separate theto difference between who designs the reactor and to build the. those are two specific distinctions we need to understand. you may be very good at designing a reactor, but not managing a multibillion-dollar, multi-year projects. yvonne: chris, great to have you. head of research. a roundup of stories to get your day going in today's edition of daybreak.
we are counting down to asia's first market open this morning. japan futures, at first check it is slow going at the open. the caveat is that the dollar-yen, we did the resurgence in the dollar overnight. they are holding those losses at 111 in response to euro futures up this morning. this is daybreak asia, i am yvonne man in hong kong. betty: and i am betty liu in new york. the world largest asset manager said to be taking up its --
shaking up its struggling unit. blackrock is lowering fund that its active equity unit. blackrock and its rivals say mounting pressure from investors over fees, clans are moving to hurt itsystems that active managers. yvonne: hsbc may raise cash for a private credit fund. they are seeking as much as $1 billion as they look to benefit from other banks pulling back from corporate lending. that would move to an asset management unit to widen access to institutional investors. it has not been formally sets. praise from president trump, announcing a $1.2 billion investment into three michigan factories. fore will be engine plants ranger and ford models.
the investments are part of 2016 contract negotiations with united auto workers union. three rate hikes in 2017, looks like an even better but after the fed hikes here. a rocky road to brexit. andesa may signs article 50 gets ready for tough talks ahead. not enough to talk about. policy editor kathleen hays here with more. agenda, top of the first. what are we expecting? >> we can step back and say there is a consensus we are seeing in fed speakers since the march 15 rate hike. they think they will do three rate hikes this year. gave a speech today. he is backing up what janet yellen is saying. rateuld see two more
hikes. he says the risk to the economy, looking at inflation are more balanced. this go policy, he says it makes sense to wait and watch for now. that is exactly what janet yellen said in march 15. was thinking about community development, banking, education, how banks need to do more lending to help poor people move ahead in life. in terms of other fed speakers, with we want to jump on this. no big statements on rate hikes. said it consumes the engine of growth. let's look at what came out today for the month of march. 7123 is the turquoise line we are looking at. 6, quite a move up that we see their. -- there.
what has not moved up is consumer spending, the white line. that is near 0.2%. here is the question, you have the soft data, the turquoise line, and the hard data that is happening. donald trump is not spurring spending yet. the bottom line, they are thinking, hoping, that they do three rate hikes. that is what we have gotten from all the speakers. yvonne: the big focus is that countdown to brexit. theresa may signs article 50. british: i am not even and i have a feeling about this. it is happening, you cannot go back to read theresa may wrote the letter and is sending it to the head of that you -- the e.u. mightnnot talk about what come out, now they will get down to terms.
the president of the e.u. commission said he had a good and constructive call with theresa may today. but he and tusk say you have to pay us 60 billion euros to exit. that is what is contentious. the brexit secretary said, what is it about? give us hard numbers, we do not agree. meanwhile, the scottish parliament backs that vote on independence. define things and making it garder for her -- defyin theresa may and making it harder for her. yvonne: thank you, samsung releasing its a new phone on wednesday. what will it take to revive the sales? ♪ betty: breaking economic news
out of japan. getting deep -- getting data on retail sales for the month of february. we are getting numbers that are a mess, up 2/10 1% month on month. the survey of economists had expected a rise of 3/10 of 1%. down 2.7%, aales much steeper loss than was expected of a 1.6 -- 1.8%. growth up 1/10 of 1%. of itwas an expectation being up 7/10 of 1%. good,ers feeling pretty but the bank of japan officials are having a hard time stoking that demand domestically in japan. yvonne: we have been talking about japan part of a
synchronized reflation trend across the globe. it is quite slow, as you can see from these numbers. we will have more inflation numbers later this week. let's talk more about samsung, they will be releasing their next smartphone wednesday, hoping to bury once and for all the crisis over the note 7. lets get him set -- insight. he joins us live from minneapolis. this has been seen as a aftertion phone,, the s8 the debacle with the note 7. peopleas not as bad as thought it was, samsung revenue inn for smartphones, down 3% 2016 verses 2015. when you ink about how big of a debacle this was, you think it would be down more than that.
they're smart phone market share went to 21% from 22%. i think this phone will cure the samsung hasms that had and the branding problems they have that. but the actual smartphone business is really healthy. yvonne: healthy, but if you look at the trend in terms of market shares, they are neck and that with apple. want to show you the chart on bloomberg. negative,n mostly what does samsung need to do with this launch to regain the top spot in market share? >> they cannot have any debacles like the note 7. they need new futures to get people excited. cool, topt is really control your phone. right now you use a digital
system like siri to ask questions like what is the forecast? they promise to be able to control your entire phone, which could set the s8 apart from other phones. you could say, send pictures of whichand canyon to papa, other assistance cannot do. it will resonate with people latching onto these digital systems. i want to emphasize i am skeptical they could have a product that really does what it says it does because they have tried other assistance in the past and they have not worked. yvonne: think about all these names, bixby, siri, how many more can i remember these days? i want to bring up another chart. we often talkple about them in the smartphone market. interestingly enough, in terms of shipment volume, samsung and
smartphone are pretty neck and neck. apple trumps samsung, probably due to the pricing of their phones. should samsung play that with apple or should they continue to play the undercutting of the price? should they continue on that front or try to move higher on the scale? >> i think they should keep doing what they are doing, which is undercut apple on some of the pricing. part of the reason, that high-end consumer is dedicated. our research in the u.s. is the intent to buy from apple users tends to be -- and it has been inching up. to try to beat apple at that game and get into that market, there are a finite number of people that can afford an $850
phone. the best thing they can do is stick to what they are good at and be more aggressive at lowering their prices. betty: should they mention at this event in new york city the note 7? do they address any of those issues? i would love it if they made light of it and had some fun with it. it is obviously the elephant in the room. if they can have fun with it and explain what happened with the note 7 -- they already explained it, but to reexplain it would be helpful tomorrow. what really stole the spotlight was that they announce they made be selling refurbished or rental versions of the note 7. everyone was scratching their heads, why are they doing this? >> this gets under the category of more often than not, samsung
tends to become death in terms of how they have had product announcement in the past and try to replicate some apple event to what they are doing right now in terms of refurbished note 7's. this and moveury on. i think they just do not get the joke. betty: indeed, thank you so much. great to see you again. plenty more to come with asia's first major market open just moments away. let's bringlutely, in sophie kamaruddin to tell us what we should be watching at the open of tokyo and korea. i am sure toshiba is one of them. >> it is a hot topic. it seems they will make light of the s8 release. looking at final bids today. and keep an i on a japanese nuclear stocks, they won
theresa may has signed article 50. yvonne: coming clean. donald trump rolls back climate change roles, and in the war on cold. betty: this is the second hour of "daybreak asia." i am in yvonne man in hong kong. yvonne: and i and betty liu in new york. if we were to look at any theme, we would say energy, front and center. we are awaiting this bankruptcy filing from westinghouse, the western unit of toshiba. also, in the u.s., president trump tackling climate change and lifting the coproducer. they are again in the spotlight.
yvonne: a good sign given these disruptions out of libya. let's go to the market open. shares we saw energy help lift higher. in tokyo, we are also seeing gains extending the rise we saw on tuesday. japanese shares rose over 1% on tuesday. not a seller, but some momentum here. we are seeing the aussie dollar about 1/10mentum up of a percent. it was the only currency to gain against the dollar. an downu one down -- tu about one third of a percent. this ahead of a decision we are expecting out of the bank of time and later this week. let's take a look at how commodities are shaping up right now. today, although
paring some of the advanced from libya announcing it would cut some of its oil field. we do have aussie funds tracking. look at what is going on in the equities space here. up 1%. gains description -- discretion stocks. utilities falling 5/10 of 1%. we will take a closer look at that in one moment. looking at the cosby, we have miners and banks on the appear. we did get the bank of korea, a sentiment gauge this week, manufacturers feeling more confident with sentiment rising
to 82 versus 81 in march. we are seeing industrials also on the rise. half of aalling about percent. let's take a look at some of the movers and shakers. the irst device since samsung debacle. we are expecting final bids to be submitted today. toshiba on the rise as we anticipate whether westinghouse files for chapter 11 bankruptcy in the u.s. kansait electric power -- electric power not trading quiet yet. we are waiting to see whether it
will filter into the tray later this morning. wenne: we will be -- betty: will be looking at toshiba possibly filing for bankruptcy with westinghouse and how that affects the banking in japan. first let's get to first word news with paul allen. from a vote of confidence in teslah a stake worth $1.8 billion. tencent has been investing in technologies reshaping the auto industry including ridesharing apps. wells fargo has reached a $110 million settlement with customers over its fake account scandal. the deal covers dozens of lawsuits across the u.s. separately, a regulator has accused the bank for an extensive and processes --
pervasive pattern of process over years. president trump has issued an executive order rolling back his predecessor's carbon cutting commitments, promising an energy revolution. he is unraveling rules and directives to combat climate change. called climate change a hoax and once to reorient policy to help oil and coal producers. trump: it was just the beginning. today, i'm taking bold action to follow through on the promise. my missed ration is putting an coal.o the war on cold -- debbie has weekend after crossing the queensland coast, but not after halting 20%
of coal output. about 50 million tons of production is on hold, the equivalent of 20% of sellable output. global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. i am paul allen. this is bloomberg. thank you. reports from japan say toshiba's file fornit is set to bankruptcy today. s&p ratings has lowered toshiba to triple c minus and saying it could fall farther. the corporate ratings agency director joining us now. great to have you. we know there is a hole in toshiba's balance. we know about the 6.2 billion
dollars write-down but we don't know how big of a hold this is overall for the company. give us an estimate how much cash toshiba needs to raise. >> thank you. yes, we estimate -- it is quiet challenging to calculate but, based on assumptions, huge cut is necessary. -- in case of the necessary cuts, we believe toshiba corporation are likely to support and provide additional loans to support toshiba operations. betty: you think the banks will have to come and step in. i just want to throw up a chart to show our viewers here showing
toshiba still has quiet a huge term loan outstanding it needs to pay off this year. if you take a look at it, it is bar onbillion, the pink the far left. is that the best scenario for toshiba? the bank should extend credit and the company gets to keep the ip business?s? -- ch >> even so, we think that difficult to render banks, such certain banks, are likely to maintain their support. we take a conservative view on additional loans because of the financials.
toshiba corporation's internal control, we take a conservative view on whether toshiba corporation will continue to support financials. do you think that at any point could the government -- or, do you think the government needs at all to step into the situation? >> at this stage, we do not expect extra government support to avoid liquid shortage for toshiba corporation. companies, toshiba is a private
company. betty: all right. thank you so much for shedding some light on that. the s&p global ratings, corporate ratings director on the possible credit fallout from this bankruptcy filing that we are awaiting. still ahead, we heard from someone who was an advisor to several residential campaigns here in the united states. ehe hoover institute is liv and joining us on president trump's agenda. yvonne: and next week go live to investmentsuisse conference in hong kong. this is bloomberg. ♪
, hongsing some money here kong dollars, 9.26 billion dollars from a right issue. this is a construction management group, part of 810 a. we have long known agent a for some while it is a very inquisitive company, into aviation and tourism. have really been reaching a broad here. watch thoseinue to lines coming out of h and a and the rights issue. headlines.k of the 22hipmaker has secured billion dollars. two thirds of that coming in .rom the jewel china bank china spending an estimated 200 $50 billion to become a world leader in should design and manufacturing. betty: japan's biggest shipping
line is forecasting a profit in the first year. to teamusen kk agreed up to create the world's six largest container line. it says profit will come from cost savings of 990 million dollars in the first year of joint operations starting next april. yvonne: nuclear power has scored a win in japan with a judge ruling against a band of the starting of two new reactors. an injunction to has prohibited companies from running plants. opposition among voters is strong following the fukushima disaster of 2011. theresa may triggering brexit. later today, paving the way for two years of talks to unravel 40
years of times. i will take you back to the credit suisse asian investment conference in hong kong with stephen engle is standing by. steve? or goodood evening morning to you. the coffee is being poured, we have a lot to chew on here with our next guest. credit suisse chief economist. they give for joining us this morning. we expect this trigger for negotiations for article 50. we have talked about brexit ad nauseam for more than six months now. what should we be really focusing on the be get into the nitty-gritty of the negotiations? >> i think we have to focus on the negotiations, watch the market reaction to the realization of article 50. in the last six or nine months, since the referendum, the turnede rate decline out to be a meaningful shot. it did not have the weakness in
u.k. data that surveys seem to suggest straight away. now we will see going forward as they negotiate things like the fragments sector and its relationship with europe, what happens to the pound now and is this a shock? with elections coming up in europe, does the broader climate affect that? steve: i just came back from another conference in china where a lot of those attending were saying eu should not just have brexit myopia, we have other things to talk about as well. is that at risk? >> of course. they have their elections, a wide range of political viewpoints being expressed in those elections and they have existing issues in terms of the financial systems, the banking system updating all of these things close crisis. none of that is complete. it is all a work in progress.
imf,ave the grief issues, that, obviously europe has a long list to think about. steve: what about the fed? a couple more hikes? is there a risk of overshooting? that was another topic that i heard at the talks last week. u.s. economy is doing pretty well. certainly well enough to justify to more hikes this year. andke in september december. may, june, no. that is due to a view that the growth will slow in the coming months ahead. excitations on stimulus are going down relative to where they were a few months ago. we are expecting a bit of a disruption, a slow down in global growth. u.s. data should be overall fine, but our view is it will take the fed a little longer to pull the trigger next time, so,
september. that is not a view we pound on the table at this point. we do not think inflation will start shooting up. we do think the job market will be ok. the fed can be pretty measured about this and watch the incoming news flow and decide what they want to do. the bias is to keep hiking. i do not think the two hikes this year is any kind of overshoot. steve: what are the ramifications in asia for a couple of hikes? wasgain my hike outlook closely related to my view on growth. a good growth environment for the year as a whole and the fed is hiking a couple of times, consistent with current market expectations, asia will be fine. steve: you mentioned pounding the table. trump is probably pounding the table, looking his wounds following the failure of the health-care bill. now, tax reform. what is the vipers pit he will
face their? >> this gets interesting. the reaction by just about everyone following the health care of that now they cannot do as much on tax reform because it is hard and they have to get the whole party together. this is where we see trump negotiate. do we see trump actually go in with his first bid, here is what the plan should be -- i would not be surprised if he is a little aggressive -- maybe there is even talk about border adjustment. a good negotiator does not give away all of his chips the first round. first question is usually about china. i have saved it from last. are we being a little complacent about the risk on the debt pile? is if youhave noticed have three to four or five
months of accelerated growth, no one asks about the debt crisis. when we had three to five months of weakness, everyone wants to talk about it. i do not think the risk goes up month to month. they have some issues to sort out long-term. it is not something that is going to materialize over the short term unless there is a new shock that we cannot first see right now. steve: thank you for your time on bloomberg television. we have kicked it off on this day at the credit suisse asian investment conference. back to you. yvonne: thank you. steve engle speaking with the credit suisse chief investment st.nomi in 20 minutes time, we will look .t the outlook for india then, peter coleman joins us at 11:40 hong kong time.
yvonne: this is "daybreak asia." i am yvonne man in hong kong. betty: i am betty liu in new york. we were talking of president trump support for the coal industry just a moment ago. now we turn to china. it is the worlds largest coal producer and co2 emitter, but trying to take a cleaner take on energy. >> china feel this is one answer to its towering pollution problem.
a new power plant that the industry likes to call a clean cold burner, spewing far less toxins in the older generators now shut down in beijing. this plant halfway to the port to a portengion -- chang city was opened recently. china is moving to more renewable forms of power generation, but bloomberg intelligence says kohl's still accounts for 75% of the energy mix. down from 84% a decade ago, but the move to renewables takes time. coa should retain -- retain dominancel in china. for poorhe energy people. >> we are trying to build new are fired plants that
cleaner than the old ones. notuodian says they do track emissions on the plant, but we can see omissions that they say are about 10 times less than a traditional thermal coal plant. the government gets it in real-time and can punish the plant if omissions get too high. burning cleaner coal does have its cost. odian say they are spending over a billion dollars over the next few years. >> there is more overcapacity in the electric power generation than anywhere in china. the capacity is down to the neighborhood of 50%-60%. this is a industry with extremely high fixed costs.
>> to be sure, the energy -- world energy association once to use more. they argue that trump plan for reviving the coal industry can lead to cleaner solutions. >> we believe that president trump will look at the technology in the u.s. hurt when then't weather does its job on one of the cleanest blue skies day of the year. yvonne: a feature we would like to bring to your attention is the interactive tv function. to will not only be able watch us live but also see some previous interviews and dive into the functions as we talk about them. you can become part of the conversation as well, just send an instant message during the show. this is for bloomberg suppliers -- subscribers only.
sunny singapore as usual. 8:30, an hour away from the open of trading there. reflecting the market sentiment we have seen in asia, equities seeing a rebound worldwide. betty: i am betty liu in new york. you are watching daybreak asia. let's get to the first word news now with paul allen in sydney. toshiba is looking like this in tokyo after reports its nuclear unit will falla -- will
file for bankruptcy in the u.s. with costse is forced overruns. meanwhile, reports that inc. j and d b.j. will not bid for toshiba's chip unit. z is to be removed from thezte than next week. department blocked shipments one year ago after claims that zte had been to iran. the u.k. will trigger brexit within the next few hours initiating two years of negotiations with the european union. 44 years of ties will be
mayveled after theresa hands over a letter invoking article 50. may will address house of commons. the first of china's biggest banks has reported results. the agricultural bank of china raised to almost $25 billion, almost 4% above what analysts had expected. cost decline and the bad ratio fell. turkey's government has criticized their arrest of the senior executive of one of the largest state owned things on torges of conspiracy to sell iran. as 1.2% fell as much following news of the arrest. global news, 24 hours a day,
powered by more than 2600 journalists in more than 120 countries. i am paul allen. this is bloomberg. betty: thank you so much. the trump administration has moved on from the failure of health care and is now focused on tax reform. id hooverned institute. he was an adviser to marco rubio for his bid for presidency in 2016. joining us now from singapore where he is talking to investors about health care reform in asia. great to see you again. what are people asking you in asia about health care reform? >> good to be with you and good evening. i think the people here are genuinely confused about what is happening in the united states. i think everyone thought donald trump would get the repeal and replacement of obamacare, the
afford will care act, above the line. of course, he didn't. the question is what's next? remains. status quo obamacare is the law of the land. this episode demonstrated how difficult it is to deal with health care in the u.s. is it just health care reform or is it a wake-up call about how difficult it is to deal in washington period? >> i think it is both. certainly health care is difficult. what president trump is realizing is the transition from campaigning to governing can be a difficult one. it is difficult for every president. even more than that is the transition from being a two maker to politics and government is very different. now you are dealing with people who do not have a bottom line that is discernible. you're dealing with people who are fundamentally ideological. that challenge is one that donald trump will continue to
face further and further into the presidency. betty: indeed, and we are so early on in the presidency. i want to bring up an interesting chart on the bloomberg terminal. our viewers can see basically no surprise here. we have been talking about his going down ands down. lower and lower. the white line showing the approval numbers. the blue line shows the disapproval rating, the job disapproval rating as well. given the cap there, what do you ofnk that will do in terms president trump's next step? this will make him, something, go even more extreme to get those rates backup. >> it is very interesting. i think you have a couple of trends at play. it is the case that in the
aggregate, his approval ratings are suffering. his numbers with his ace, the people who supported donald trump in this election, continue to be very strong. in the 70's and 80's. that would suggest he is going secure theiro support, to try and indeed reward them in some ways. for some issue is if reason he begins to see degradation in that number and rating begins to test the mid to high 30's, i figure will be a big problem for republicans generally as we head into yet another election cycle in 20 18. yvonne: what will the hurdle be like for tax reform? what is the expectation given the frustration on capitol hill? >> tax reform is no less easy than tax reform.
the u.s. tax code is remarkably complex. do you just deal with the business side or the individual side and what to do with the corporations that pass through and pay the individual rate and comply with the individual code? it will be incredibly complicated. one thing about tax reform that gives it a better prospect is republicans are always more comfortable talking about tax then health care. it is a natural policy area and will be in the wheelhouse of trump as well as congressional republicans. i would expect to see significant activity on the issue in the coming months. yvonne: does that include a border adjustment tax? we are not sure how donald trump, the president, is weighing on this issue at the moment. >> that's exactly right. the president has been skeptical of the border adjustment tax. he said, it is too difficult to explain. support a policy
that i cannot explain to the american people. the tax is a tool for acquiring revenue. the corporate tax rate down into the 20's they will need the border adjustment tax to furnish the revenue necessary to get them to that level. whatll have to see happens, but it is clear that donald trump as well as republicans in the senate are skeptical of the prospect. betty: i'm curious, not just on health care reform, but in general, what are some of the top issues on the minds of people youare talking to him asia? what to been they want to know about trump? >> there is brought uncertainty about the posture towards asia. there have been conflicting messages. you have reassuring messages coming from jim maddox, and rex tillerson, but then you have the president who seems to be absent about what the u.s. will do,
particularly in southeast asia. with respect to singapore, where i am now, some of the relationships here in southeast asia, there is a lot of uncertainty. everyone is interested in tax reform and obamacare as far as how it will affect various industries. many wonder how the failure to repeal an replace health care will affect their investments in the u.s. comes to china, can the campaign promises that tomp had when it came containment policy, can they be implemented now? >> i think the core of the relationship between trump and china will be one of pragmatism. i think trump is far more interested in issues that frankly have hung up the u.s.-china relationship in the past. i think the u.s. has reason to be optimistic as well as china.
we will see when they get together. that will be the meeting to watch in mar-a-lago. thank you. we are over half awake into the tokyo trade now. holding the gains. the dollar-yen back above 11. the -- not any surprise. you can see the convergence on the far right of the chart. that could show a dollar rally likely to follow. check out on the next chart how the aussie is faring against the yen. helping the pair through the overnight hike. still above the overnight hi
there. ,uickly check in on the pound giving that we are anticipating the triggering of article 50. the sterling trapping as much as half a percent earlier. a barclays strategist says the pound is extremely cheap at current levels. he does see cable at 132 byte year and, above the median forecast in a bloomberg survey. you so much. sophie kamaruddin on the markets. much more ahead. we will be back at the credit suisse asian investment conference where we will be joined by the chief economic advisor to the indian government. next. this is bloomberg. ♪
albums with images and their personal library. can hopes it will help to reverse their revenue decline. can and has been struggling as consumers switch away from digital cameras to smartphones. tonne: amazon has won a race souq.com. up in shopping is picking countries such as qatar and uae where most people own smartphones. trump announcing a $1.2 billion investment in michigan factories. for a data earmarked center. the fort america president says investments are part of 2015 contract negotiations with the auto workers union.
the indian prime minister faces continuing challenges to his plan to fix the economy. loan growth is falling and isains anemic while bad debt outstanding. stephen engle is standing by economictop indian advisor. steve: in the last five minutes here, sitting here with my next guest, chatting about all things happening in the world. thank you for joining us today, the chief economic advisor to the government of india. lots of talk about. let's begin with the macro situation. brexit trigger about to happen. i think the federation of the indian chamber of commerce talking about the double blow that could hit the economy from a reduction in trade and also a
weaker pound sterling. involves europe and the u.k. slowing down to some extent that will be bad for our exports. in the short run, at least, the eu economy is doing not badly. germany is doing relatively well. steve: you have been talking about increased exports. >> that has been in fact reflected in the fact that exports from india have really perked up over the last six months. they were in negative territory, but now, in the last two months .r so, they have come up there is a study upward trend. it seems like in the short-term, we have survived brexit relatively well. steve: what should be the focus for any post 2019 trade deal?
position is clear that we want to have relations with both the u.k. and eu. it is a matter of timing on how we do it. ,s far as eu and u.k. relations they have to sort themselves out. we have been in discussions on a free-trade agreement with the european union. there are also discussions with the u.k.. essentially, going forward, if we can get closer trade relations with both parties, that is the way forward for us. steve: you have talked about the big impact that perfectionism can have on the domestic indian economy, how are you reading it so far? >> so far, despite the campaign rhetoric and the early days, we have not seen much actual protectionist action. bills andall of these
intentions to act, but nothing has action happened. to that extent, things seem to be ok. if there are changes to the hb one b said, i think it would have a major impact on our economy. our exports have to grow every year. if you have protectionist trends, that will be affected, whether it is brexit or protectionist action in the united states. steve: it is still early on. he has time to do that. the big concern for the job market for indians in silicon valley and elsewhere, and the rhetoric -- sure, the or policiesbill have been shelved for now, but it could be revived. >> it could revived. was anxiety inducing. unless any actual action is taken i think -- also, if you
steve: welcome back to the credit suisse asian investment conference. i'm stephen engle continuing our conversation with our guest, the thef economic advisor to government of india. a lot happening. first, i want to talk about the investment climate. all gdp is relatively high, the investment numbers were week in the fourth cut it -- fourth quarter. i believe they fell to the lowest in the decade. when we have global rates rising in general, what needs to be done by the indian government to spur investment? >> first of all, the macro economic environment is very steep. inflation is down. the fiscal deficit is coming down. even in terms of growth, 70% in this environment is not bad at
all, especially if you think we are emerging from demonetization . it is true what use -- what you are saying that in particular private investment has been very weak. on the other hand, we have achieved record levels of foreign investment. the good foreign money is coming in. a lot of it in the service sector but also manufacturing. it is domestic privatization that remains a little week. weak,tory output, fairly but again, you have the relatively high gdp number -- the envy of the world -- how do you rationalize the dichotomy between the headlines and the underlying numbers? >> essentially what has been happening is investment has been k, but consumption has been
strong. oil prices have been down for a long time. public spinning has made up for a lot of the private investment. we have a situation where exports have been weak, but compensated by consumption and public spending. going forward, the big challenge is how do we get private investment back up again. the number one challenge we face is what i call the twin balance sheet. it is action something that credit suisse has done a fantastic job in analyzing. public sector banks have a lot of bad loans. had to be get ourselves out of this? that is the big challenge in the months ahead. there toothere a risk because of the rollout of this tax. i was in japan when they were trying to stimulate their way out of this malaise and then it basically made everyone stick their money under this mattress.
the intention exquisitely is that the new rate, the level will be no higher than the level previously. it is called a revenue neutral rate. there will be no overall consumption impact because the average tax will remain the same. that is point number one. in some ways, we think the tax rate can be lower because gdp gains intremendous test collection. thehink the question -- concern under like your question is implementation. a massive tax increase, massive administrative change at the center, lots of new procedures, new forms. there is a huge implementation challenge. that, i think -- but, i think
that will be a temporary thing. there will be bumps on the road. steve: on top of the demonetization efforts. >> yes, but i would say that demonetization is mostly behind us because the economy is demonetizing. -- >> after the elections, a big win nationwide. what should be the party? priority? bei think there will political components. most importantly, get investment up and growth of. that means this twin balance sheet problem. the government is engaging in conversations about what should be done with the bad loans in the bank, how to resolve some of the bad aspects of the credit sector.
gste can get the implemented smoothly, and the balance problem solved, we will not be too bad. steve: thank you very much for joining us on bloomberg television. you can get back into the conference and talk about china. we did not even mention that. more coming up from hong kong throughout the rest of the morning. yvonne: thank you. that is almost it for us on "daybreak asia." sh is joining me now. we are awaiting news from westinghouse. westinghouse filing for bankruptcy, that has been so reported on now. bank of china, we should see them reacting to their earnings. that is a look at some of the
broad themes. betty: tell us what guests you have coming up. a lot, right? ch aad: we have mark talking about brexit at 10:10 hong kong time. take a look at the pound. we have seen a rebound from sterling. also, from the credit suisse conference, talking about consumer confidence, china's consumers are buoyant, but india's consumers are the most buoyant. ♪
♪ it is 9:00 in hong kong, midday in sydney, 9:00 p.m. in new york. i am haidi lun. rishaad: i am rishaad salamat coming to you from bloomberg's asian headquarters in hong kong. this is "bloomberg markets: asia." ♪ haidi: toshiba faces another is nucleareports unit is about to file for bankruptcy. rishaad: it is "b" day for britain. theresa may will trigger the br