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tv   Bloomberg Markets Asia  Bloomberg  December 14, 2017 8:00pm-11:00pm EST

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rishaad: slow but steady, more good news. rising optimism and the recovery on track. theresa may facing a brexit leaders to be eu creative in the interest of striking a deal. haidi: i'm haidi lun in sydney. , disney'sthis hour $52 billion deal includes much of rupert murdoch's empire. this is "bloomberg markets: asia." ♪
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rishaad: the index of japanese business and manufacturing, very positive. showing you what is going on in the past three years. abenomics.fore we have seen positivity. it has been working. many fracturing there in blue. the blue line is showing the outlook. just in manynot fracturing but also business conditions for the future as well. it is something that many people .ut there are looking to
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it is signaling good times ahead for equities in tokyo. haidi: absolutely. except fore faltered the risky inflation. it comes on the back of that very positive nikkei reading. all going into this bank of japan meeting. seem to see a little bit of fatigue in the markets after what has been a massive week for central-bank activity. pretty low volume. let's take a look at markets. traders today.r liette: we are seeing money come off the table. very low volume. up by 7/10 of 1%. we hit that high.
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have seen the tail codes the bank come under significant of decreaseterms meant. you cannot blame it on the japanese yen, because even though it is not showing, it is barely flat against the dollar. singapore just coming on online. down to 10th of 1%. apple under a little bit of pressure, up one third of 1%. have a look at south korea. this is where the on normally -- the anomaly is up. interesting commentary coming through. is been speaking to asset management and they said a lot of the stoxx yesterday are coming back.
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you can see some of these south korean stocks. significantly, the front runner in terms of index move. it is coming under pressure. yesterday the e-commerce company coming through saying it will get into smartphone telephone providers, and market reaction to that has been swift in terms of why are you getting into that already heavy business? commentary coming through that it is not that surprising, given that it has about 15 million customers. concessionary stocks really leading the game by 2.5 percent. when we look at the currency function, it is a dollars story, still concerned about the tax reform in the u.s. some dollar weakness coming through. only a few asian currencies tracking high. the dollar is up to 10th of 1%.
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2/10 of 1%. rishaad: it seems to be all about tax move and fiscal reform. here's tom mackenzie. trump insists it is all about helping the middle class. leaders prepare a last-minute plan paid by earners. attacked marco rubio the state for putting the wealthy ahead of working families. the ecb kept rate unchanged and pledged to move slowly in winding down stimulus. they focused on euro area inflation's. change.d traded little
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they reiterated future hikes would be limited and gradual. they voted unanimously to keep the key rate at .5%, as predicted in a bloomberg survey. it has been a busy day for central-bank as mexico raised its benchmark for the first time since june. it signals more inflation ahead. policymakers in turkey raised some of their key breakers, but less than expected. held, saying it is sufficient for now. u.k. prime minister theresa may is in brussels with other eu leaders for a summit to focus on brexit. the meeting is likely to decree that there has been sufficient progress in negotiations to move on to future relations and trade. chancellor merkel said there are
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answered.tions to be other leaders say it is time for matrix and how she sees the future relationship with the eu. away ruleshave swept on net neutrality. the republican led fcc voted 3-2 to give up most of the authority over broadband providers and hand enforcement to other agencies. they said it is time to restore freedom to the internet, but critics disagreed. from this consumer harming, corporate enabling, destroying internet freedom order. because i am among the million outraged.
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tom: global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. the latest survey talking about this, the japanese recovery remaining solid. editoret over to japan brian in tokyo. the data looks pretty strong. , is theree into it anything to worry about? our things as bullish as headlines appear? reporter: no, i think the bottom report. a very bullish the latest evidence showing the economy after seven straight quarters of expansion is likely to remain in this long period of sustained growth. there was one point.
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the forecast was cut, which was expected and normal. nearly december shows that plans full percentage points. miniscule downward revision. i think that underscores the overall bullish sentiment. haidi: this comes on the back of the pmi reading. --t are the implementations applications going into the boj meeting next week? brian: mr. corona made a reference to the theory last .onth if you maintain monetary stimulus for too long, it can start to be counterproductive by eroding bank profitability. be looking for any sort of reference to the reversal
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rate. i came up in discussions. aside from that, most economists are expecting to see a move towards the exit in the second half of next year by way of higher targets for yield under the boj yield control curve policy. that will be the real focus. we are not being skeptical and looking for weak spots, we ask if this can be sustained. what will be done to try to sustain this momentum? brian: the big question mark continues to be household spending. the only way to convince households to spend more money is to give them more money in the sense of higher money -- er wages.high they would create a disincentive to keep cash on their balance sheets. we will see how companies
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respond to that in negotiations, which are actually starting right now. hints ofarting to see lobbying on both sides of the equation. the federation union says they want an increase in wages. 2% base wage and 2% incentive. we will see how companies respond to that request. that missing puzzle piece is really frustrating for policymakers. we are looking ahead. discussing fx and the outlook for commodities. rishaad: one of the potential ,hreat, to global growth putting that into perspective is jonathan garner. this is bloomberg. ♪
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rishaad: we are back. this is "bloomberg markets: asia." haidi: a quick check of the flash headlines. set for major changes at the top , telling bloomberg that the chief operations officer is set to leave as early as february as part of the management reshuffle. lined uplicopters is toplay replace him -- replace him. airlines ingapore overcapacity. to faceine trying challenges from the middle east. include job cuts.
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i think we will continue to see the environment remaining challenging because of the overcapacity in the market. i believe with efforts and support across the entire organization, we are well prepared for this challenge. says theyar airways plan on creating new routes. expects a very negative year in terms of earnings, but passenger numbers should be close to where they were before the embargo. it has affected the performance, but he expects growth to improve. >> our bottom line will be affected. we are still giving profit warnings. as a matter of fact, we have a very negative year. recently, our bottom line -- we are hoping it will be very close
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to the number of passengers we carried pre-blockade. rishaad: let's find out what has been influencing markets and what could be in store next year. jonathan garner is with us right now. jonathan, good to see you. >> what a year 2017 has been. rishaad: i think we lost jonathan there. can you hear me? let's take a look at what we have in the market. the dollar has been losing a little bit of ground. about 93.5 on the dollar index. the euro at 117.87.
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hopefully we can sort out our lines and technical problems to talk to jonathan garner about that and more. this is bloomberg. ♪
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rishaad: just getting breaking news. florida-based company. the ceo is going on medical leave. the board has named the chief operating officer as his acting replacement. let's get back to jonathan garner. before we had these technical problems, the question i was asking was 2017, really good year for emerging markets in particular. same hope for the the same?
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you were mentioning how strong it is in japan. growth is extremely strong right now but central banks are responding. we think earnings growth rose over next year. our earning numbers are substantially below. high.tions on -- are very when we look at markets , it has not been so great for small and mid-cap companies. where the inflation story is small. in japan it has been dominated by mega-caps and hardware.
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a big part of the market that we think is problematic on a evaluations, we recommend taking profits. it is all for us pointing very much relate cycle environment. haidi: how much issue will currency cause japanese equities? we have seen this correlation andeen yen strength weakness. asyou see that playing out another headwind when it comes to japan? >> yen dollar has been range bound this year. the yen has depreciated against the euro until recently. that is very important currency in terms of competitive dynamics for japanese corporate's. if the boj beaches this yield curve control net steer -- third , we think theear
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yen stands the risk of appreciating against the euro and the dollar. that is one of the things that drives our forecast below consensus. what are your sector trends when it comes to china? widespread, there seems to be consensus that it is more of the same that we had this year. is there anything different that you see with more opportunity next year when it comes to chinese market? >> we probably favor the financial and energy sector the most. chinese energy stocks are benefiting from the increase in demand from a strong global economy. reviewed. opec deal we also tend to feel that the show producers will not be able to ramp it -- production.
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the chinese mega-cap oil names are having positive earnings revisions. that is not the case for the software sector. in that part of the market, we have not done great. we have been printing 50% plus growth. we have to watch those evaluations in china as well. rishaad: you are looking at china, india, these countries. been a false dawn in regards of economic reform. we had a lot of demonetization in the early part of last year. >> india has had quite a good year. the earnings growth has been quite disappointing, compared to the rest of the world. we have started to reduce our position on india. ofket has been supported
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mutual investment flows. the bond deals in india is moving up, which might slow down some of those inflows. underweight korea. we are putting our money particularly in latin america, in brazil. it is a classic late cycle play. they have not enjoyed good economic growth. they will be over 3% next year. haidi: biggest risks for next year? >> central-bank tightening, higher oil price, and we think the yield curves will be flattening. we think that the trend growth rate of the global economy is still somewhat subdued. it has been great. we had a fantastic year for equities. we never actually get back to back rate years in equities. are more likely we will get
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pulled back to more moderate, low digit performance from the markets. haidi: a bit of a conservative view for next year. jonathan garner, chief asia equities strategist. one of the stocks that we are watching that has had quite a 450% stop that has gained for its hong kong listing. i am talking about the developer for one of the most aggressively acquisitive developers in china. also one of the most highly levered of about 400%. it fell over 10% in the session today. this on news about share placement selling 251 million it -- a piece. that haslso a company
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spend a lot of money across various sectors, including buying the tour is an asset in july this year. we are seeing the impact of the deleveraging campaign, they are scrambling to achieve funding and other ways. it will be interesting to see how this plays out. with regard to investments in business, they agreed to sell these products businesses for one billion -- one billion u.s. dollars. 6.6% up. this is a hong kong company divesting three of its lines. yearswere created two ago. it is part of a consolidation of some of the companies is this is. the company said in a statement it is also planning to transform itself into a digital company as
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well. coming up, sealing the deal. betweens the merger disney and 21st century fox mean? we have the details on the way. ♪ is this a phone?
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we're coming down to the start of the trading day, looking at several moving parts. pressure for equities in the asia-pacific. much of it down to what happened to the u.s. stocks under pressure as this tax overhaul plan runs into a few hurdles. weremembers of congress having some second thoughts, including the likes of marco heio, saying he thought would be supportive.
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japan's manufacturers and proving to the highest levels in over a decade. global momentum is why we are seeing this moved to the upside. good times ahead for the japanese economy. that translated into more good times for japanese equities. haidi: we are not seeing that reaction today. that is maybe because we are seeing a stronger yen on the back of the dollar. one of the biggest stories of the year. let's go over to markets because we had a surprise move from the pboc, following the tightening of those money rates. it is a reminder that it is all too easy to get caught out. oft are we seeing in terms the open today? juliette: it is basically following what we are seeing elsewhere across the region. pressure coming through in the equity markets, led by what you
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up .9%.ng in japan, there is a lot to do with what we saw on wall street. as you mentioned earlier, some fatigue as well. expire yesterday. a lot of those stocks are coming back into the session. commodity market not being helped out much, down .4%. you have most of those material by .3%.off a lot of these stocks reached highs on monday being dumped out over the course of the week. when we look at stock moves, and mentioned some of these coming back.
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up by 20% in seoul today. sydney is an interesting one, up by 4.3%. it appears to have some of its debt in order. it has had asset sales. elsewhere, still coming under pressure in the japanese session , up by 6%. we will be talking to andrew about this shortly. let's have a look at what that looks like on a three-day chart. a very big plunge as it hit -- complete that placement. rishaad: we had data out of tokyo saying there might not be trouble ahead for the economy there. om: the latest survey showing that japan's recovery remains
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solid. top estimates in the fourth quarter, while optimism in the service sector was unchanged. inflation does remain far below the target. that may change. the outlook among large companies came in unchanged and well below estimates. china and south korea have to put a missile system behind them and work on better ties. mutualll work for respect and trust. president moon once a new era between the two countries. deploymenter the lead beijing to cut back on for his him and restrain korean companies working in china. putin heldladimir his annual conference saying the u.s. was harming itself with the inquiry. he is on good first thing terms with his opposite in the white house.
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he affirmed his denial of any interference and the 2016 election and said the issue was invented to undermine president trump's legitimacy. exit polls suggest they will take one of your nine to 46 of .he sea legislator they include withdrawal of nomination rupee notes and the nomination of sales. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm tom mackenzie. this is bloomberg. mostad: one of china's leveraged business with an upside share placement. is, the amount of share
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price gain that we have seen so far this year. i suppose this is a good time for them to raise it. >> they are one of china's most indebted developers. they are one of china's most aggressive dealmakers. last month, they committed a cash lifeline to the video about $270ompany million equipment. that came after early in the year, where they had agreed to invest $2.3 billion in the units. rishaad: they are not shy, are they? >> not at all. it is typical of these large companies that have done a lot of debt fueled acquisitions. they agreed to buy theme park assets from one group earlier as well. they need cash to finance all that. up 450%he stocks are
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this year. it is one of the most indebted companies that we talked about in china. the clampdown on acquisitions, are there any red flags? should we be worried about the numbers we are seeing? >> you have to be looking at these numbers very carefully. as you mentioned, there has been the regulatory scrutiny for these kinds of private companies in china that have done a lot of aggressive acquisitions in china and overseas. the term that has been popularized in china for them is gray rhinos. these are problems that you can see coming, unlike black swans. 2018 forion going into , company like sunac becomes
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how much can they squeeze out of the assets that they have purchased with all this debt? at a certain point, they will need that instead of more borrowing to service the interest on that and the principal payments. haidi: one of the big themes of this year. thank you for that. we are top story tracking today, disease massive 50 $2 million deal for most of the assets of 21st century fox. the outcome will see a leaner fox. creating morely movies, broadcasting channels and theme parks throughout disney. more details on this deal from new york. was onceo bob iger bloomberg television earlier today, talking of all the this tie in regards to
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up with fox and disney. he talked about synergies, opportunities. he talked about the challenges, especially with regulation. we think this will get a lot of scrutiny from regulatory authorities of worldwide. we think the proposition is very proconsumer. ramy: very proconsumer. they have their theme parks, studios and tv channels. let's talk more about this. what you are looking at here is the studio revenue and part revenue for disney. white revenue and actually fell 21% because of fewer films over the past quarter or so. cap revenue rose about 7% quarter on quarter.
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with the acquiring of the fox x-men, from the franchise, avatar franchise, there could be tie up with x-men and the avengers. i'm a huge fan of the comic books, but they are talking about an x-men versus avengers war. we have not been able to see that yet. next take a look at the terminal chart. what is the upside for murdoch and company? a more leadere focused company on news and sports. down 36% inlling the last quarter. said, sales are a good thing. it didn't see some growth. that was because of fox sports. fox is keeping their news and
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sports. it seems to grow and grow. toy: this is a great time feature this function on bloomberg. we call this out every time someone gets a big pop in terms of their wealth. looking at rupert murdoch, he 87,number 92, now he is at gaining $560 million because of this. in november, he was valued at $11 billion. you see a pop up about $3 billion in the past one and a half months. this toaiting for close. it could happen in the next year or two. by the end of that, he could see another $2 billion added to his wealth, which would take him to number 69 or number 70.
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he could be the biggest winner. coming up, we are looking at the dollar under pressure recently. it is set for recovery. we will discuss that. this is bloomberg. ♪
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haidi: this is "bloomberg markets: asia." europe's two biggest central banks met in a policy-setting this weekend, one surging over the other. let's get to kathleen hays, kicking the solve with the ecb a -- ecb. i guess complacent in the sense that inflation could
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pick up and he does not think it is going to. it is clear that the ecb is waiting for many other banks for inflation to pick up, but it will not happen quickly at all. ecb updating its forecast. averaging at 1.7% year over year in 2020, still below target. about a ratelking change. it was more about maybe they will give us more details about how to reduce bond purchases or changing the plan of it. nothing changed there. and the press conference, mario are still pressures very muted. he does not see much momentum building. this is what he concludes about policy. >> and ample degree of monetary stimulus, therefore remains necessary for underlying inflation pressures to continue to build up and support headline
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inflation developments. let's jump into -- let's jump into the function. -- just under 2% is ecb's target. float athose measures all. what mario said at the press conference is he is more comfortable than he was a couple months ago that inflation is moving in the right direction. they said they left their key rate, but they do see it topping their target in three years. ,f you want to be optimistic you say that inflation is starting to raise a little. it is a very different picture than other parts of the world. and the u.k. you have .nflation surging
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the bank of england holding. dovish move we saw, we will not see much going forward. kathleen: the bank of england, mark carney has been criticized. they aree two reasons more optimistic on growth is the brexit breakthrough. they are getting ready to move ahead, even though theresa may is having problems messick and politics at home. unchanged,t the rate a unanimous vote. it has not happened since february. iny do see more modest hikes the next few years. they will move very slowly. progress on article 50 negotiations. why is this important?
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that has been his concern about a disorderly brexit, getting the economy. hitting the economy. what you are seeing here is how much inflation has risen against what gdp is doing, below the average. i think this is why they are heartened. people are not worried about the pound. it is a different dynamic. that is the latest in the boe. we are getting there. boj next week. it has been a big week when it comes to monetary policy. when it comes to the dollar, headed for its first week, breaking that longest winning streak. worries that the republican tax package might struggle to get through the senate. wayne look set fx.
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we are looking at a year when it to what a year it has been for the u.s. dollar. into nextoutlook year, some of these concerns that we will see allegedly gridlocked in the u.s., do you see another year of weakness? speaking, yes we do. forecasting a 125 on the euro-dollar. we see economic momentum really starting -- actually continuing to hold the pace in europe. we saw the pmi's come out, and some of them showed records on the manufacturing side. we still believe the ecb will begin paring back. we think that the fed will stay pretty modest. the reason why the dollar
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slipped a bit is because inflation, as we were talking about in the last segment, inflation was a bit disappointing. janet yellen's casting of the inflation story also disappointed markets. it surprised me as well because most of this year, they have been talking about this transitory. it will all be over in a minute. on the other side, a little more concerned. we have two rate hikes next year for the fed. we are actually seeing the u.s. dollar weaken. you bring up something really interesting. i think the market is under rating the impact that tax could have on earnings. i guess we are a little stronger on the u.s. dollar now. we get into the back end of
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the first quarter, we see it dropping away pretty sharply. rishaad: speaking about three interest hikes. what happens then? in,hey get gradually priced where could we see the dollar go? wayne: i do not think they will end up in the dustbin. my second point is i think there is risk to the upside of the two rate hike scenario. i think it would be gradually priced. it is interesting the action and the gold market. rate hikes are pretty well priced for next year.
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gold prices have been coming down. consequently, even if we were to that aee, i still think tax plan and never to be, as we get into next year, it will become clear that it is not neutral. we will continue to see debt rising at the government level. i think in the end, as the equity market momentum -- we do see earnings growth as positive, but it does step back a little from this year. it will shift out. we are very positive on asia next year. 10% earnings growth there. we think the overall pressure begins to push down on the u.s. dollar as we get into the end of the year. rishaad: i am going to bring up a normal chart on the bloomberg terminal. talking about changing hats and put your commodity hat on.
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surprising, having seen what is happening with growing global economic momentum. what is your view? surprisings not that when you look at the components. look at what that has contributed to the commodity index. a big slice of it is agriculture. what we are seeing with agriculture is it has been down heavily this year because of a couple things. most of the futures curve and agriculture are slightly upwards. we have excess supply and relative demand. sugar and coffee are down to the double digits. surprising when you look at the components. having said that, we think there is a real opportunity for investors in the bloomberg commodity index to have another
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look at agriculture over the next three months. around seen risk rising agencies. the australian bureau is cold. to be a more difficult condition for production of things like soybeans and corn. the emphasis they put is on the and going into the second quarter. that would impact latin america more. soybean election has picked up a lot there. we think there is a real opportunity for people to relegate into the agriculture sub index of bloomberg commodity index. you could see expected returns of anything north of 10%. haidi: pleasure to have you as always. director of commodities
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management in singapore. have a great christmas. on --e to come ahead plenty more to come ahead on "bloomberg markets: asia." this is bloomberg. ♪
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haidi: a quick check of the latest headlines. facebook is to put videos and its new watch product. it business model for the content, the social network has pay forded watch by their shows. twitter jumped to the highest since october of last year amidst speculation about a deal between disney and fox. have been said to thinking about buying twitter last year. bloomberg lp is developing a global breaking news network for the twitter service.
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coming up, we will be assessing the outlooks for the latest numbers. this is bloomberg. ♪ >>
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♪ the greenback heading for its first fall on dovish concerns that the republican tax bill will struggle in the senate. and slow but steady, more good news for shinzo oblique. rising optimism amid another recovery on track. i am rishaad salon in hong kong. haidi: and i am haidi lun in sydney. the prime minister's authority is on the line in front of a special election. this is "bloomberg markets: asia ." ♪
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haidi: we have seen sluggish volume when it comes to equities trading this friday. but take a look at the fx space, because a lot of commentary going into next year looking at whether strength when it comes currencies, but take a look at this cart. 4463. we are looking at strength coming through from the korean won. the spoiler is potentially to this party could be a pace faster tightening from the fed. also, a surprising jump in inflation. tensions on the korean peninsula as well. look ahead to 2018, because this chart shows you with the top calls are in terms of what it is expected to do out of asian currencies.
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andre looking at the yuan -- looking at the one. coming off a 19 year low to deliver a total return of more than 13% this year, as the current account situation starts looking better. there are a number of asian exports, rebounding in general buoyancy when it comes to trade and economic growth in this part of the world. global yield,the of course, and it looks like we will see many beneficiaries when it comes to asian currencies. the gains are absolutely stellar. if you are looking for yield, or perhaps not in the right place. you should have been in equities. these are all in dollar terms. 2000 inat the csi three the nikkei a at 222% gaining.
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it has been costly, up 35% so far. but let us get to the first world news headlines. the latest hong kong survey shows japan's recovery remains solid. third-quarter estimates were top. continues the economy to strengthen, although inflation remains far from the bank of japan's target. that may change. the large-company outlook was unchanged as -- and well below estimates. unchanged andates pledged to keep things going slowly. expected to undershoot the target by 2020. the pound changed very little.
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the mpc voted unanimously to keep the key rate at 0.5% as predicted in a bloomberg survey. says initial discussions at the brussels summit were encouraging. the leaders are likely to agree there has been significant progress before moving on to future relations and change. chancellor merkel said there are still questions to be answered, and other leaders said it was time for may to explain her relationship with the eu. china and south korea have pledged to put the spat about a u.s. missile defense system behind them. president xi jinping said they will work forward with trust. thaadns over the deployment led beijing to cut back on tourism. the disney box deal is confirmed. the 50 $2 billion acquisition.
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disney is picking up assets, including box's tv and movie production house, a stake in the sky and a lineup of pay tv channels. it is an epic downsizing for murdoch, who spent three decades of amassing the operations that gave him such influence in u.s. and u.k. politics. global news 24 hours a day, powered by more than 2700 journals and analyst in more than 120 countries. i'm debra mao. this is bloomberg. the dollar is heading for its first weekly drop amid the dovish federal reserve signaling that the tax package may struggle in the senate. mark cudmore is watching from singapore. is this what we are going with into next year? that is very much the
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consensus in the market. it is an exact reversal from last year. the first week in december last year, it was a take away from all new york traders. they said 2017 was going to be the year for dollar strength, but it did not work out at all. it is then a terrible year for it. will be a probably a slightly negative year, but not as bad as 2017. one of the things that happened was that the fx markets were caught offside. there was a euphoria without a fundamental framework. people were long on the dollar, but did not have the justification or stance in actual data. this year, the market is negative on the dollar. but maybe it will not be so terrible as 2017. just a slow grind lower as the dollar expands. morgan stanley maybe three or
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four hikes from the federal reserve next year. goldman says they are going to struggle to get through one round of tightening. it will be a goldilocks scenario. what is the consensus, if there ?s one question markm mark: no one is expecting a 2017-style equity gain to occur. there will be more volatility next year. i struggle toing, see how we will get four hikes next year. the federal reserve is determined to tighten rates, and they want to normalize policy. given that financial conditions remain loose and assets are trading well, they seem to have the room to tighten a bit more than inflation would more it. three hikes next year would be
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ambitious. the fed realizes that even though they raised forecasts, they know inflation is not coming through. either the phillips curve is broken or seriously damaged. pressuresnflationary may be real. this low inflation is not transitory. it is time to accept that some of the structural disinflationary pressures from globalization and demographics will continue to wait down on yields. for hikes is unlikely. let us get to today, mark. there is a feeling that this could all mean good returns for equities in japan. mark: i think japan could be one of the good stories next year. the markets never recovered from the collapse of the end of the
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80's. but we may see a multiple re-rating in japan. japanese growth is genuinely better. serving comes on the back of strong pmi. there's been a general trend that japan growth is ok. on the flipside, it is that it is not exactly soaring. -- thed be the lowest slowest growth of any major economy. they may have escaped deflation, but it is not like the japanese economy is roaring. demographics continue to weigh on those factors. there is been an underpricing, but there can be a re-rating. solid, but it will not be one of those runaway bull stories. rishaad: looking now at market
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action, it is pretty much read. half empty in session. jules, this having to accentuate the negativity which is at the moment looking a little bit shaky, what do you make of that? there are no running bulls in asia here today. every market is under pressure. japan's nikkei index is down by 8/10 of 1%. thehave seen a pickup in yen, but it is actually been higher for four sessions. some say this is about dollar weakness. there are concerns about whether or not u.s. tax reform will go through. but certainly, we are seeing an inverse relationship between equities. up 7/10 of 1% in shanghai.
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around the region are mostly higher as well, but investors are taking money off the table. for equities, it has been a good week. the asia-pacific index is up. it is on track for its first weekly win for around three weeks. telcos leading the declines by 2%. 1%. estate off by i mentioned the retreat we are seeing in japanese equities. this is an interesting chart. certainly, the run-up you have seen in japanese equities has been rearranged to a 26 year is retreating somewhat as we head into the final weeks of 2017, and of course, the final weeks of the calendar month as well. a quick look at the regional stocks. soon a in focus today. , but not as dire as
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the open. they raised $1 billion in share placement. kcc court is basically recovering from what we saw yesterday in the soul session. seoul session. it is trying to get into the smartphone business. a little concern about whether or not the e-commerce giant should be getting into that space. we are seeing significant selling for the stock. -. haidi. more onou can follow the days trading action in our .arkets live blog get a market rundown in just one click. live commentary and analysis of our expert editors. know what to expect from your investments. coming up, airways with a flurry
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of new activity. an exclusive conversation with the ceo in the next hour. ♪ breaking down the latest concerns on securities. this is bloomberg.
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rishaad: we are back. markets:bloomberg asia." this pushes ahead with the restructuring. a hong kong company agreed to sell three company businesses. that includes furniture, clothing, and beauty products. fung has been
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slumping as retailers deal with bankruptcies. it will have a strong focus on audio quality, ironically. samsung's digital assistant that rivals google assistant. it is weighing a price tag of $349,000.nd apple's there may be cheaper models of the iphone. apple sales took down enough to technology and the iphone x to justify the $999 price tag. waiting times to order the phone have shortened, but demand is below initial expectations. owen is not looking forward
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to a super cycle. rishaad: fourth quarter consistent with nikki eight manufacturing index readings early this week. chief research. does this mean good times ahead for the nikkei? many are at the moment predicting? the japanese economy, especially manufacturing, is recovering. because of the options likely to grow because of the strong recovery, and also weaker yen. i think it is a good time to
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increase exposure to japanese equities now. what does this report tell us? is there any bad news and it if you really delve into it? : one thing i found is that sentiment has declined, especially for the individuals and hotels. i am afraid that the shortage in japan is quite severe. diminishes the margins outside the sector. but i think there are more positive things in today's report. kenji, as wage negotiations begin, are you hopeful that we will see positive sentiment translate into wage growth? i expect some wage hikes
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next week. we're talking 3%, which is what the government aims four. he raise wages to keep employment. the growth of wages is likely to be 1% or so, so we cannot expect much. into nextforward year, i expect further rises in wages. that will take the prices higher. , but not so bullish on the story yet. do not sound very bullish or convinced that wages will come through. boj,cations for the because we had positive pmi.
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does it change the story for criticizing? should they stay the course? ji: manufactures and then recovering strongly. including the numbers in boj and pmi, and not going to change my view expo sector. they have outperformed the market so far this year. you do not have to worry about , butvariation of exports they are thinking about switching to financials. these japanese financials will the policy rate, and it will also raise, i just say it is growing. loosening theer
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controls. they may raise the target for 10 year yields. up 2% or 3%. us howaad: kenji, we have seen the equities rally has happened in japan. but that reverse correlation is seemingly breaking down at the moment. what is your view on that? view, the japanese have lostearnings strong correlation. about thenecessarily yen's weakness increased against japanese earnings. however, we see strong global demand. boosteductors have corporate annual yearnings. -- annual earnings.
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now, it is a lot of things. the japan for japanese goods, areuding semi conductors highly in demand. correlation.weak we do not expect a very strong or significant depreciation next rise to 25,000y by the end of next year. rishaad: kenji abe, thank you. cyclical spacing disney and its mega deal with fox. what are those obstacles?
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we will talk to bob iger. this is bloomberg. ♪
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rishaad: we're back with " bloomberg markets." haidi: and i am haidi lun in sydney. now paying a large chunk of 21st century chunk assets valued at $52 billion. bloomberg caught up with disney ceo bob iger, and he explained how the deal came about. bob: a year ago i did not see this one coming. -- rupert and i have known each other for a long time. we have a lot of respect for one another. we occasionally get together to talk. this summer, we were talking about the disruptive forces we were seeing and relative position of our companies. i left taking there might be an
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opportunity for us to do something with him. i thought about it for a few weeks, called him thereafter, and suggested maybe we should get together and talk about it. we did. we spent some time analyzing whether or not there was something to be done, and with the value proposition might be for shareholders of both companies. ultimately, we rolled up our sleeves and got into a negotiation. here he are today. onlywe are creating is not a great company, but great global opportunity for consumers to not only consume great content made by both entities, but to consume it under circumstances that are compelling and innovative and much more user-friendly. learned more about your future stepping down in 2021 versus 2019. what is the future hold for james murdoch? : james and i've talked a lot about a potential role for him. he will be integral in the planning process.
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and i will continue to talk about whether or not there is a role for him and his company. inhas been extremely helpful this process. i look forward to talking to them more about it. walt disney is thinking about succession, and james murdoch being a part of that. do you see that happening? 2021, am extended through and the board of the company will have ample time to consider its options in terms of my succession and to reengage in a planning process that. it is premature to speculate. ultimately, it will be a board decision. rishaad: that was ceo bob iger. quick check of market action. hong kong, shanghai, and the nikkei a down. we have the dollar heading for its first weekly drops this month. ecb meetings in the bank of england. theering concerns about
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republican tax package all playing out at the moment. coming up, survival of the fittest. are the survivors in china's war on risks. ♪
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♪ 10:29 a.m. in hong kong. >> i am debra mao with the headlines. president trump consists that the tax cuts are all about helping the middle class, even as gop leaders prepare a last-minute plan to cut the top rate paid by million-dollar earners. sparked criticism from within. marco rubio attacked the party for putting the wealthy ahead of working families. shen collins of maine says does not favor any cut at the top of the scale. president putin held his annual marathon press conference, telling his audience that the united states is only harming itself with the russia collusion inquiry. he is on good first name terms with his counterpart in white house.
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during the four hours, he reaffirmed his denial of interference in the 2016 election, and said the issue was invented to undermine president trump's legitimacy. modi looks at sustaining momentum ahead of national elections in 2019. exit polls suggest that the bjp will take 99 to 146 seats of the legislature. the campaign features unhappiness with modi's policies. u.s. regulators have swept aside rules on that neutrality. they removed obama era restrictions on favoring websites willing to pay for speedier service and blocking other traffic. the republican led fcc voted 3-2 to give the authority over broadband providers, and handed to others agencies. chairman patel says it is time
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to restore freedom to the internet. critics disagree. >> i dissent from this legally lightweight consumer harming corporate enabling internet freedom order. i dissent, because i am among the millions outraged. global news 24 hours a day, powered by more than 2700 journalists in more than 120 comments. i'm debra mao. this is bloomberg. we are getting a bit of the friday fatigue when it comes to the amounts and bawling. -- and volume. about 15 central bank decisions, not just the fed. the questionises for 2018. can we sustain what has been a
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phenomenal year? russia today also decides monetary policy, with the second straight port -- quarter-point cut. gun to talk the about, as you said, a rough ride into 2018. given thatat there it is the late cycle of an equity rally? they are moving away from growth and toward value. also toward the more defensive parts of the market itself. >> not a great into the trading week at all. the regional index is still up half of 1%. it is on track to post its first weekly win out of the past three weeks. not positive at all. still a bit of sell them coming
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through in some of these tech players. down 1.1%eng index is over the nikkei index. thereto,it of weakness but a little bit of a pickup in the japanese yen against the dollar. againstllar weakness these concerns about whether or not we will see tax reforms pushed through the yen. holding at a bit higher against so no surprise that we have seen a little bit of downward pressure coming down from japanese equities. having a look at the gd function on the regional index, you can see what is moving the markets. industrial stocks look ok, along with utilities. it is really telcos and utilities. kcc lookingocks, good at 20%, but remember it fell by about 18% yesterday. 1918 is soon act.
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let us have another look at stocks we are looking at. fung looking at a special dividend plan, so 14.7 times evaluated according to sale. they have upgraded to buy from underperforming. one quick look again at sectors in the region. since i have been speaking, i switch out at the stocks that are looking ok. it does look a there's quite a bit of selling coming through for the final trading day of the week being led by telcos and also the tech players. once again, some significant pressure today. heidi. haidi: those who are left
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surviving could be in for a bonanza in the coming years. angus, we saw on the month the cap and interest rates. is that having an impact? far, but it may decimate the lower ranks of tech players. he said there were only 2000 of those the moment, among the micro lenders and p2p platforms, which match borrows with investors. it looks like these rules are really going to in those numbers down to perhaps as few as 200, according to a an inquiry. they will not be able to make money charging 200% on short-term loans. critically, they will not the or use intimidate
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violence against borrowers that have not managed to review the funds. it will be survival of the fittest, and according to inquiry, fewer than 200 buy in the next three years. rishaad: angus, there will be beneficiaries. who are they, and why? hand oflaying into the the big players, the dominant figures in the industry. , apanies like ant financial subsidiary of out a bubble. the rest of the top 10 in the thin tech sector in china, you're looking at human die, to companies that are able to data. if you cannot charge high
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interest rates beyond 36% in china's case, you have to rely on better analysis of potential defaults. you have to assess the applicant's credit worthiness. mcquarrie estimates that the top in the chinese market that is expected to jump to almost a trillion u.s. dollars by 2022. those top 10 players may hold more than half the market. numbers are unbelievable. it is the market that will jumped sevenfold in the next three years and play into this big players hands. what are the economic factors that support these micro lenders? because those economic factors, the ones that drive people in their arms? the first one is the fact that these consumers and small businesses are most likely to go to thin tech lenders.
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they are been neglected by state owned enterprises. firms, because they are better to lend money to. some people find money incredibly easy to get a hold of. you can get on your mobile phone and get a loan in a few seconds. china is getting richer and better able to service debt, but yet the same time these people who are able to borrow do not have the credit history to get a loan at a bank. all of these factors drive intec players. those are the factors that play which driving incredible growth in the sector. rishaad: angus, thank you very much. angus whitley.
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andese president xi jinping his south korean counterpart willing to look beyond a spat involving the u.s. missile shield. they say the focus now is improving bilateral ties. joins us for more on this. is this a reset and relations on beijing and seoul? tom: two it degree, certainly a following of the tensions over the missile defense shield. we heard from president moon yesterday in his meeting with president xi saying he wanted to build the foundation for a new era of relations. that was echoed by president xi. we are coming out of a pretty sour patch resulting from china's anger at the rollout of missile defense, built by the united states of course. that led china to ramp up
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economic retaliation on south korea. doing things like making it difficult for south korean companies operating in china to operate their businesses successfully. timates, that has led to a 0.43% gdp tick down. president moon has been far less and than his predecessor for the bad missile system. thaad missile system. it appears to have appeased president xi. what they clearly had to focus on was working together over the question of north korea. that is likely to continue to denominate -- to dominate discussions today. they reiterate a desire for a peaceful outcome, for the need for negotiations.
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both of them want to see a denuclearization of the korean peninsula. china has its plan for suspension, which would involve south koreans and u.s. stopping military drills. the south korean president backs the sanctions but is also cities open for dialogue. what else is on president moon's agenda? >> the chart shows exports and imports from 2000, and they are grown significantly. there is a lot of demand in china for south korean products, whether cosmetics or south korean pop music. they will try and develop those relationships. mo usere number of including energy and the
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environment. president moon is going to be southwesternthe city of chongqing. they're hoping the development of economic relationships can help politically as well, and help them realign and tackle or move things forward on north korea. haidi: thank you so much for that, tom. tom mackenzie the visit in beijing. coming up, qatar airways refusing to pull back a midsouth the isolation of the country. our exclusive interview with the ceo is next. this is bloomberg. ♪
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♪ >> this is "bloomberg markets: asia." in with thecking latest headlines. airbus is set for a major change.
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willhief operating officer leave as early as february. the helicopters are lined up to her place in. he would follow his boss out of the company, with sources saying he would not seek a third stint as the chief executive in 2019. singapore airlines warns that overcapacity remains a problem as it tries to fend off the challenge posed by middle eastern rivals. carrier is debating how to fight find low-cost operations. the company said changes may voluntary unpaid leave. >> will continue to see the ,nvironment is challenging because there is capacity in the markets. support across the
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organization, we will be back at an advantage. rishaad: keeping the aviation a new strategy for roots amid saudi led isolation in its omission. the ceo said the airline will continue to grow despite the current problems. going to fall down. this is exactly what we want. the blockade wilma happen. any negative impact on the does not mean we will not continue to grow. the bottom affect line, because it was completely unexpected illegal blockade. where on the march ahead, which will continue and will make people very envious when they see how many new destinations we are announcing in order to defeat our adversaries. >> can you update us on the how
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the blockade is affecting your business? you did get the full fiscal year profit warning. are you having to reschedule more flights? to cut routes? can you give us an update, sir? routesave not cut any aside from the blockades. we are keeping and expanding. of course, i will have to fill in the vacuum that those 19 destinations created. we have been successfully doing it. we will continue to bring more passengers on board, however, the issue is that our bottom line will be affected. we are giving a profit warning. as a matter of fact, we will -a-vis negative year vis the bottom line. as for passengers, where hoping we will be close to the number of passengers we carried pre
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-blockade. three 777ers.ld there are 12 more, i believe. you have ordered them from boeing. what are you doing about the order backlog? al-baker: we are not selling because of the blockade. we are selling the current 777s because we have to clear the aircraft. we want to keep the average age of our freight to five years, so we have to keep on rolling up our sleeves. the only way we can do that is to sell and lease back our older aircraft in order for us to make place for the new aircraft that are on our books. us an assessment
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from your perch as the head of the economy isow doing? i was reading a story about how the budget deficit is expected to decline as the economy there absorbs the blockade. some have said that this is really the impetus for further diversification. how do you see it? : please do not listen to a lot of fake news that our adversaries keep putting out about our economic performance. the economic performance of my country is robust, and the diversification and investment and expansion of the economy will continue over the next years. 9.6%t us talk about the thaye you did take in ca pacific. how did that game you access into mainland china? baker: as a matter of that,
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it is over 9.9%. we do want a strategic relationship with cathay. it is one of the best airlines. it has huge potential to grow. yes, they have difficulties for the time being, but as you are already based in hong kong, you know they have a robust plan to restructure business. the affect will continue toward the huge success. , an importantant economic area of the globe. haidi: there is said to the dissent at the bank of japan into next week. the bank is said to between being its communications messaging as a dissenter calls for more easing. this is a new dissenter. we have had at least a couple of committee members vote against further stimulus.
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at least since queretaro took the helm in 2013. he joined the board in july, and explained the reasons for not adding additional stimulus despite the inflation target remaining elusive. this is bloomberg. ♪
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♪ rishaad: welcome back to "bloomberg markets." facingthe prime minister a tricky weekend ahead with the sydney election that is turned into a close race. the outcome may determine the fate of the government itself. with ed johnson tracking. malcolm turnbull must be ready for this. is been a tough year for the government. it could get tougher depending upon saturday night's results. it is a key by election -- b i-election. just to backtrack, the election has been called because is onent john alexander of the many politicians caught up in the citizenship fiasco.
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he was called out by realizing byt he has dual citizenship default of his father being a british citizen. that is barred by the so he has now renounced his british citizenship and is trying to aclaim his seat against former premier. polls are showing it could go down to the wire. how are the candidates looking at the moment? >> they are both fighting very hard. turnbullngly, malcolm and the labor opposition leader a sure signr and is that dublin is in play on saturday night. this is important for malcolm johnull because if
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alexander loses, the government will not regain its majority in parliament. that will mean that turnbull will be faced with the prospect relying on the support of independent lawmakers to get legislation passed. not an and of itself is huge burden, and he is been doing that for a few weeks. he has support across key sectors. but you have to question what it says about his authority over parliament, over the party. from saturday night could spook lawmakers in his party, and could ultimately lead to some questioning whether or not turnbull is the right person to lead the government into national elections in 2019. how will his relationship with china play out in the election? durban tensions largely over foreign interference lost that the government has brought in to -- foreign states
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states meddling in domestic politics. they are careful not to single out china for espionage were meddling by chinese citizens living in australia, but the case of a labor senator who admitted ties to chinese businessmen linked to the communist already did thrust china into the spotlight. it could play into this, given that 20% of the population there is chinese. haidi: more to come in the next hour of "bloomberg markets: asia." we're joined by jeffrey halley to get his take on what happens in 2018. ♪ ♪ retail.
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kong. i am rishaad salaam it. lamat. welcome to "bloomberg markets: asia." ♪ rishaad: asia-pacific markets falling at the end of the trading week. the topics set for a first weekly decline in four. new concerns the republican tax bill will struggle in the senate.
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slow but steady, good news for shinzo abe. rising optimism, and the recovery on track. which, bringing up this chart, showing how this has predicting the fall of the japanese economy into this deflationary hand we had. the white line suggest conditions as they are perceived at the moment. the blue line suggesting what the outlook is like. at a decade high, the manufacturing index. we have not seen it since 2007. looking good for manufacturing is the outlook. currently also trading to a level below a decade. nine-year highs there. they had been flatlining through the course of two or three years.
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suggesting the service side of the economy doing pretty well and looking like it will continue to do well, too. having a look at the first word news. dissenter at the bank of japan calling for more stimulus. they wanted them to flag of the risk of additional easing. it could explain why some investors wrongly interpreted kuroda's comment as a hint for early policy withdrawal. a reflation is to join to the board in july. to epb kept rates unchanged wind down stimulus. mario draghi focused on euro-area inflation, saying he expects to undershoot the target by 2020. the pound note little changed. they reiterated future hikes would be gradual. ating to keep the key rate
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0.5%, as predicted in a bloomberg survey. theresa may said initial discussions at the two-day brussels summit were encouraging. the leaders are likely to agree there has been sufficient progress in negotiations to move on to's future negotiations -- move on to future negotiations and trade. time leaders said it is for may to define how she sees the u.k.'s new relationship with the e.u.. president trump says the new tax cuts are about helping the middle class. aen as gop leaders prepare last-minute plan to cut the top rate earned by millionaire earners. marco rubio attacked the party for putting the wealthy above working class families. says she does not favor any cuts at the top end of the scale. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. mao.debra this is bloomberg.
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news from wall street, certain in this part of the world. let's find out what is driving negativity. we have a lot of things producing this view of the glass half-empty. certainly not a great end to the trading week, the regional index down to 0.75%. weakness in tech. japan's nikkei index down by 0.9%. the 26 that index hit year high. the yen up 1% against the dollar over the course of this week. with a dollar do weakness on these concerns, whether or not we will see u.s. tax reform push through. certainly a stronger yen pushing down japanese equities.
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weakness in the hong kong session, nearing toward the end of the morning session, down 0.9%. only a couple markets higher. new zealand closed out the session firmer by 0.33%. recovering after options expiring yesterday. we see aluminum in shanghai looking good, along with copper. gold is firmer, as well. wti up by 0.25%. china, the biggest lag when you look at percentage change on the index. down by almost 10% in hong kong after that $1 billion share placement. to the upside, i mentioned korean stocks rebounding. pretty much recovering what was lost yesterday. let's look at stocks we are watching the session today. particularly on the main china benchmark index.
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we have had news china unveiled a three-year plan to boost development in the artificial intelligence agency. you cai providers rising sharply. they are saying video surveillance and finance are among sectors in which ai technology can quickly become commercialized. a good strength and a number of players. up by almost 3.5%. elsewhere, it is a downbeat day across the region. energy leaders around -- down. the benchmark index with a gain of about 1%. it will be its third weekly gain in the month of december. rishaad: thank you so much for that, a look what is going on, market-wise. dive into theeper movie driving sentiment at the end of a big week. we can get to sydney and join
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garfield reynolds. what is the deal? garfield: to see it in the red after what had been a tumultuous week, there have been things that have shaken up investors, as we get toward the middle of december. it is the year end. one thing is, up and down with alsoeform in the u.s., driven by the sharp loss in alabama for the gop. their senate majority will narrow. that took some of the shine off trump. maybe it is not a surprise to see some republicans defensive about the tax bill coming forward now. even if the odds are tax reform willpast, rubio and co have their little, stand up for the little guys victories before it gets past. but it will get past. china surprised people a bit
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with its move from the pboc. it has people on edge. going into the weekend where all of these things have occurred, it has been a good year. temptation to take money off the table and come back next year and take a fresh look. rishaad: what about the weakness in the dollar? does that have material impacts, looking at equities in this part of the world in particular? single biggest impact they weak dollar has in part of this world -- even though the correlations have gone down a bit -- is still japan. one of the biggest developed stock markets in the region. when the yen is strong, the nikkei does not like it. if the dollar is weak, the yen is probably strong, all things being equal. that is definitely a concern. there are plenty of other
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countries around the region, exporters, who do not like to see a stronger currency. then again, it does not always look. the yuan has been strong this quarter and the kospi is one of the few gainers today. it had a strong quarter, as well. it takes new wants to interpret what the currency is doing. when it comes to stocks. rishaad: you write in your blog, about the pboc's monetary policy, this caveat. let me remind you what you wrote, a reminder to investors it is too easy to get caught up in china's zigs, when you thought it was going to zag. garfield: that is the key thing with china. more than just about anywhere else, you are at the mercy of what the pboc and chinese communist party and president xi, what they see as good for
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them. withwill not always gel your trading strategy and outcomes for other economies around the region, or for particular stocks. you always have the capacity that you misunderstood what you -- what they were going to do. to give an example from what they did yesterday where they tightened, and people got worried because they were not necessarily expecting them to tighten, just because the fed tightened. they tightened less than they had before. in the short-term, people have said, this is a worry, maybe we want to adjust our valuations now. in the longer term you might take it as being something positive. that even with that the fed tightening, the pboc won't tighten as much, all things being equal. it is a very tricky market to navigate. rishaad: it certainly is. you can get more of garfield's
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musings and all the trading on online.ets you can get a market run down, and find out what is affecting your money, right now. still ahead this hour, the yuan or ringgit headed for a better year in 2018? how the asian currencies are stacking up at the close of the year. first, is reserved moving as expected in the pboc? looking back on a big week for central banks, and forward to what to expect for them next. ♪
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♪ rishaad: we are back, this is "bloomberg markets: asia." a look at business flash headlines. twitter at its highest since october, amid speculation before
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a deal moved with disney and fox . lloyd blankfein with twitter bots, jack dorsey. disney considered buying twitter last year. but they advised against those discussions. amazon's alexa could have more competition, set to join the crowded smart speaker space. samsung to introduce a device that will have a strong focus on audio quality. the gadget is said to run the bixby, and a system that rivals googlelexa and assistant. facebook puts at before videos -- ads before videos. they have expanded watch, for shows.
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adyou can build a big enough business, it will not have to continue doing that. facebook admits that scenario is a long way off and it has already been tweaked several times. last yellen using her federal reserve press conference to confirm the fmoc will see three more rate hikes, even though inflation is stubbornly unhelpful. three or four hikes next year. let's bring in the senior market analyst for the asia-pacific. tell us about this. >> i do feel the market is very complacent. if you look at where the dot p l lots -- if you look at where are, there is a big difference.
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the market is taking this too lightly. hugee also about to see a tax cut in the united states at the top of the economic cycle, which may put more fuel on the fire. it is not being priced in at all at the moment. beingople ultimately complacent about inflation itself? jeff: yes, i do. they are definitely being complacent about the potential pace of rate hikes next year. what people are not looking at, out of the four major developed central banks, the bank of japan will be quantitatively easing by the next -- at the end of next year. it will with straw liquidity from the market by the end of next year. for follows a general trend
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central banks to start pulling the trigger on this sort of thing. it is being ignored, to be honest. rishaad: this is just it. is inflation something people are overly concerned about, ultimately? is it really something which should be paid attention to, as it has done for so long now? jeff: i think things are slightly different. i don't think of the markets or economists really understand how the new inflation works in a tightly connected digital economy, so to speak. etc.,d taylor rules, etc., probably do not hold. i am not going to say 5% or 10% inflation. we could see inflation up to 2.5%, 3%. in a highly leveraged,
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dollarized economy, with something -- with us as the move away, from the cost of capital being 0% after 10 years of quantitative easing. rishaad: let's facing, quantitative easing. now we also have quantitative tightening, the fed selling these bonds and the taper program in effect. then you have rate hikes, proper. it does magnify the impact, even though janet yellen said the tapering would be like watching paint dry. jeff: yes, i think definitely there is a flaw here. if we get a taper tantrum like we did a few years ago, or the global economy start slowing down dramatically, like a huge risk event, you will almost certainly see the central banks putting a halt to these and possibly adding liquidity again.
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as long as things continue ticking along, i do strongly feel most of the developed central banks, not new zealand or australia, but certainly most of the rest, will start quietly withdrawing liquidity and tightening. that will have a knock on to the em countries around the world that have dollar pegs. rishaad: i am looking at your latest research. i did like this line in it. is.buy everything trade is in. is it? a classic cycle, surely? jeff: you could have tried to pick the s&p or nasdaq for the past few years, and you would have a bad run on it. i am telling clients rather than
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two pick of the top, wait for confirmation the top is in place. there is still a lot of global liquidity and institutional money chasing yields. there is still irrational exuberance. we are still seeing the flow on effects about -- quantitative easing pushing up assets all over the world. we have not quite got to the point where it has run out of steam. we will have a huge tax cut after the new year. we still have a bit of steam, but i feel we are moving toward the stage where we get a meaningful correction in asset markets. rishaad: how do you -- this is the $20 trillion question -- how do you know when you have got to the top? will one of those things be come of tax cut has run its course, everyone is quite bullish on what will happen to stocks. i feel it will be a very transient event.
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it runs out of steam after a couple weeks, it will be a strong signal we are about to get a meaningful correction in the stock market. looking back on research i have been following, every time there is a new state governor, there is a meaningful correction in the u.s. stock market. onna seems intent deleveraging their economy. if the buy everything trade runs out by the end of january, it is a good signal the top is in place for now. rishaad: tell me one thing, bitcoin. $17,000 for over one of these. you are hugely skeptical, and many are, like you. but it continues to go up. the adage is, this time it is different.
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what is your analysis? jeff: if i was able to write a book on the markets after 30 years, that is what i would say. i would call it, this time is different. every major cycle, crisis, event, someone comes out on tv saying, this time it is different. but it never is. 99% of people buying bitcoin at the moment are buying it because they think they can sell it for a higher price next week, not because of this great cryptocurrency revolution, which may play a part in our lives in the future. but i think there will be a lot of smoking wreckage before that occurs. rishaad: we won't even talk about the new normal. have a good weekend. if you are a bloomberg subscriber, you can catch up with our interviews by looking at our interactive function, tv .
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you can send messages to our team and guests. still ahead, challenges facing singapore airlines. our interview with the chief executive. this is bloomberg. ♪
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rishaad: singapore airlines raising its game after increasing a petition from middle east airlines. they are investing to fix their superjumbo's. exclusively to bloomberg in singapore. >> we have always said we wanted to provide the best to our customers. we arrived at this product, we are going to provide something our products really want. space, comfort, personalization.
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what we have done, not only have we been able to do that, at the same time, we are able to increase the number of seats. this will contribute to revenue opportunities. there are two configurations. this configuration has 471 seats. there are lots of opportunities to make up a revenue. >> where are you in this business review? how much of you achieved, and how much more? >> this is our transformation we were talking about, focusing on how to improve revenue. how to make sure we are efficient in our processes. how to restructure our costs. more importantly, all these are done with ensuring we remain the favorite of customers. stage, theeginning
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early days. but we are seeing contraction among the staff. they understand the need for transformation. they are heading a few projects across the organization to do this transformation. >> you talk about wanting to be a leader and more efficient. does it lead to restructuring among your workforce? >> the key focus we have for this transformation exercise is singaporewe can make airlines the most preferred airline, in a way that is cost-efficient. course, as we change the way we work, the processes, new technologies are introduced, some staff will no longer be relevant. can have new skills to
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perform new tasks. rishaad: singapore airlines goh choon phong speaking to bloomberg. in tokyo,business getting the latest on the japan reopen ♪.
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>> it is 11:29 a.m. in hong kong. i am debra mao with the latest first word news. survey showsnkan japan's recovery remains solid. they topped estimates in the third quarter. optimism in the private sector was unchanged. the economy continues to strengthen, though inflation remains far from their target. that may change. outlook among the companies came in unchanged and below estimates. china and south korea have decided to put ace backed about u.s. missile defense behind them and work on better ties. president xi acknowledged the
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problem and said they would work on mutual respect and trust. president moon once a new era between the countries. beijing cut back on tourism. indian prime minister narendra modi set to retain his home state. it would help them retain momentum for elections in 2019. theyexit polls suggested will take the majority of the legislature after a campaign featuring unhappiness with modi's policies. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am debra mao. this is bloomberg. ♪ rishaad: having a look at market action, tokyo back on stream after their hour-long lunch break. let's join juliette saly.
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juliet: that the nikkei under pressure as it comes back from the lunch break. up about 0.8%. it was down about 0.9%. debrah was mentioning -- was mentioning the big number we were looking for. mainly to do with the fact the yen rose 1% over the course of the week against the dollar. it is up by about 0.1%. quite a few asian currencies moving higher. concerns about u.s. tax reforms. tech stocks under pressure. down 0.8%. msci down about 1%. we are seeing upside in south korea, as well. let's look at the big players in the session today.
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down aftersunac raising $1 billion. jumping sharply in the hong kong session. it will pay a special dividend. still under pressure after the selloff yesterday, planning to move into selling smartphones. a couple analyst concerned about whether it can be competitive in that space. it is an e-commerce giant. crown resorts up 3.6%. it is slashing its debt. i mentioned what we are seeing in the currency market, with weakness coming through from the dollar, the japanese yen on track for the best week in a month. caution coming through from the fed, the ecb. is lower than the dollar, down about 0.1%. currency isrean
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back for a strong week. one market that is going ok today. we will turn to one of china's most leverage developers, raising $1 billion in an up share placement. buying alking sunac lot. very busy. i guess they need the money? >> they have been on a spree this year. and other chinese companies like hna, as well. there was the one to group -- wanda group. aey invested in units of internet streaming company. last month they promised them million.0
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it has been a lot of debt financing. some of it has been for big chinese companies like this. the question now -- rishaad: feeding frenzy. acquisitions,of that has always fueled sprees like this. it is a question of how to deal with a hangover, from a debt perspective. this is not the only show in town. let's look at hna. the wheels seem to be coming off their. andrew: hna has done a lot of buying over the years. a group of new regulators across the world because of these acquisitions. it appears to be switching track and going to sell off assets. i think for investors in the
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bonds, it becomes a question of, how much can they squeeze out in the coming year of the assets they have already bought. the same cost have gone up a lot, because all chinese companies have increased to this year. it adds to the debt burden. chinese corporate debt burden to begin with is the biggest in the world. it is something chinese policymakers are really grappling with. let's look at these developments and what they tell us about the general indebtedness of china, chinese corporate in particular. andrew: it is a massive debt load. --ething the governor government has spoken about tackling seriously. there has been an increase in interest rates discouraged in the borrowing. we are looking for signs of how that plays out. same time, a lot of companies have managed to lower their leverage ratios. but there is a strong focus on
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these bigger conglomerate tech companies that have been so active in m&a across the world, to see what the returns of those investments are in coming years. talking 260% are of gdp, a massive number. it is regarded as some by conservative, even. andrew: it becomes a question of how sustainable that is. particularly if we see slowing in revenue growth. rishaad: also if we get more interest rate hikes and tightening of policy, that increases the funding problem even more. andrew: that is right. we did a story earlier talking about forecasts for corporate defaults. i was talking about the chinese offshore bond market. it is a concern for any company that has a lot of debt. with of that, we have changes taking place, as well, in terms
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of who lend to, etc.. we have not even touched on shadow banking. right, the authorities have taken steps to rein in the growth of these wealth management groups, part of the shadow banking. we see bits and pieces of policymakers trying to change it short-term interest rates. there are times the government is comfortable trying to rein things in. of course, they have to do it well not leading to a streak of default or hurting economic growth. they have a fine line to walk. rishaad: thank you for talking about these indebted chinese companies. let's talk about china more and look at the crackdown on risk. surgingand control of online lending markets to alibaba and others. let's talk with tom mackenzie. talk to us about this in more
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detail. tom: it ties into the conversation you have been having with andrew in terms of the crackdown on risk in china. we are talking about the wealth management products. and now this renewed focus on the fintech sector, online lending and online credit. which is something that has been flagged by the pboc governor earlier this year. we know it was coming, and now they are matching words with action. what we have seen is them stepping in to say interest rates will be capped at 36%. some have been charging up to 200% or short-term loans. saying regulators will weed out illegal operators. the significance of this, it is $121ket worth about billion u.s. dollars. the results of this regulatory crackdown, you are likely to see
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top 10 players, ant financial, and others, the top 10 players and companies carving out a more than 50% market share as a result. this is a sector expected to grow in terms of the amount of credit extended to individuals and businesses, by about seven worth about 940 billion u.s. dollars. the result, smaller players squeezed out and bigger players in a different position. rishaad: how well positioned are the likes of ant financial and others as this policy takes hold? tom: it is all about data. ant financial has a wealth of data. and they are backed by insurance. it is about punching the data, setting the credit worthiness to
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whom they are lending. some of the smaller players would lend loans pretty easily without asking too many questions. would use intimidation, sometimes violence, to get back their money. --is those regulations organizations regulators want to squeeze out. looking at 2000 operators that could be shrunk down to 200 because of this crack down. the reason these platforms have burgeoned is because traditional banks and lenders have not been meeting the requirements of individuals here in china for easy access to credit, and for small to medium-sized enterprises. ceo of apoken to the company which is the parent company of the u.s. listed lender. when they spoke, he welcomed the regulatory crackdown because he said it would clean out bad players and
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provide a better environment for companies like his. tom, thank you for that. tom mackenzie joining us from beijing. the yuan outperforming next year, but not the only contender for the top of the pops in asia next year. this is bloomberg. ♪
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rishaad: a check in on the australian dollar. unchanged, no real data at the moment. australia pretty much unmoved, 76 u.s. cents. their dollaren, has been on a move to the downside. the yen, pretty much where we were. has been causing consternation for the central bank in korea.
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another move slightly to the theside at the moment, ringgit and you want --yuan the most promising currencies. the best place to put the money in the new year. our editor joins us from singapore. tell us more. asian currencies have had a tremendous year. in fact, the asian dollar index was up 5.5%. the best year since the 1997-1998 crisis. it is an export rebound. and of the chase for yields. among currencies this year, the ringgit, the indian rupee, the tide --on, and the
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among the best performers. tremendous in terms of total return. what was interesting was next year. only the ringgit and the chinese twocoming into the top places for investors to place their money. was, theynteresting picked up the yuan as a likely outperforming next year because of the global bond and possibility the chinese bonds might be included in the global bonds index. and of course, pboc continues its deleveraging. so bond yields are expected to rise. still takes the top of the latter in terms of investors interest in this part of the region. the ringgit has turned around sharply this year. its rebound from a 19 year low
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were based on two factors. andly, the rebound in oil export market. but also at the central bank, it signaled last month that it may .e tightening interest rates this led investors to revalue the ringgit. a lot of them think it is looking undervalued. this time last year people were talking about 2017, saying the yuan would weaken. now they say it will strengthen. tell me about the key currencies around the region, and why. atricia: we are also looking the indian rupee and the indonesian a rupiah. -- indonesian rupiah. investors are quite interested in the kerry -- carry.
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they are saying places like india, which is showing signs the central bank would be tightening interest rates, and of the indonesian rupiah -- picking up quite a bit, they are seeing good flows and fundamentals. it is encouraging for foreign investors. you may notice i did not mention the korean won. it had a very good year this year. but positive fundamentals have been priced in. with all that is going on on the korean peninsula, the won is one of the top performers this year. traders think this is unlikely to sustain into next year. the stories may have run out of legs. profitability of fresh tensions on the korean peninsula and the export market, its reliance on
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the tech sector, are questionable. rishaad: what about the risks? there are always risks to these outlooks. among the biggest risk in this part of the region would be geopolitical tensions on the korean peninsula. the same the fund managers we spoke to thought the korean won would be a good hedge if you are holding a basket of chinese currency and you are holding the won, it would make a good hedge, if there are fresh tensions on the korean peninsula. there is also the risk of the global economy, if the fed starts to signal a new rate of rate hikes. it was still sticking to three rate hikes. four, otheres go to banks in the developed world, if
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they have a faster pace of tightening, that could also spur funds out of this region as investors look elsewhere. rishaad: patricia, thank you so much for that. let's have a look at the business flash headlines. have a look at the nippon airways. they want a venture in myanmar. this is after failed efforts to get off the ground. they're looking to tap rising demand in one of asia's fastest-growing companies. the coo is launching a new search for a partner. even though this is the third attempt, he is not thinking about giving up. he says myanmar's middle class will want to travel. bloomberg chief operating officer is to leave in february as part of a far-reaching management reshuffle.
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bregier would follow his boss. seek a thirdll not stint as coo in 2019. intends to have new roots. the coo says he expects a very negative year in terms of earnings. but passenger numbers should be close to where they were before the embargo. he said he expects growth to improve. >> our bottom line will be affected, and we are still giving a profit warning. as a matter of fact, we have had a very negative year, with our bottom line. numbers, itssenger will be close to the number of passengers we carried pre-blockade. back to the megadeal set the media talking, disney
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snapping up a big chunk of 21st oftury fox's assets, a deal $52 billion. bob iger says gives the company a greater global reach. we're excited about a number of things. i have talked about the content and offering it in more competitive ways. it gives us a bigger footprint. 21st century fox did an amazing job of growing its international businesses. in europe, millions of subscribers. its ownership of star with india, hundreds of millions of viewers a month. this gives us far bigger international reach than we ever have before. and an ability to reach consumers directly. another thing compelling is the talent that comes with it. not just on the creative side. but management talent, as well. we look carefully at the talent.
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we know them well, have competed with them hard over the years. you will be inheriting a lot of talent. leading to job cuts, again? >> there are synergies. we will take a look at the overlap between businesses that and look for efficiencies there. but the synergies and efficiencies will come from multiple directions. a lot of opportunities for a number of people within the fox organization, be on the opportunities they had today. we look forward to planning the integration of both companies and getting the work to grow in a company that will exist to create long-term value. rishaad: what can you extract from skied? they have a news unit.
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what you want to do with the asset? have you spent much time thinking about it? >> sure we have. 21st century fox will continue to pursue its acquisition of all of sky. we are hope thing -- we are hoping they will be successful. sky is an amazing platform. it provides a great consumer experience in terms of access to programming, but creates a great programming's from sports to news to entertainment. we have distributed a lot of our programming on sky. we are extremely impressed with of their user interface, their ability to attract and retain customers. that obviously is a real crown of 21st the assets century fox. we look forward to the opportunity to have sky be part of our company. coming up, passage to
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india. inping speed up operations the country's biggest port. ♪ rishaad: cargo containers
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passing through india's busiest port in mumbai contain a portion of japan -- one of japan's companies. what is driving this? it has to be the obvious, hasn't it? there is definitely the , it has beenhina these two countries together to balance out. it is also a story of matching needs and interests between the two countries. there is as side
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need for a band's technology and direct investment into the country, so it can keep economic growth pace running. you have an side, aging and drinking population, trying to reach out to markets integrating at a much faster pace. think seems to be the rock of this partnership. what kind of a rise can we expect? it is one of the biggest presences of japan and india. expanding, japanese companies are using india as a manufacturing base to get into africa. it is expanding from japan into india. fromad: thank you so much,
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tokyo. that is it for this edition of "bloomberg markets: asia." best of bloomberg markets middle east is coming up next. have a fabulous weekend. this is bloomberg. ♪
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♪ alisa: i am alisa parenti in washington and you are watching "bloomberg technology." let's get a check of your first word news. president trump praised his administration's efforts to roll back federal regulations today. he spoke about the tax bill currently working through congress. saying he expects senator marco rubio to come around. pres. trump: i think he will be there. he has been a great guy. very supportive. i think senator rubio will be there, for sure. we are doing well on the tax front. we have tremendous support. alisa: senator john cornyn predicts the senate will pass the gop tax

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