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tv   Asia Edge  Bloomberg  October 5, 2014 11:00pm-12:01am EDT

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week. >> that continues. more on the protest and the affect on the economy. the world bank has a view and it is not complementary. a continuing sales slump. we take a look at continuing competition from above and below. more in thisnd edition of asia edge. >> the markets kick off a new trading week and we see japan lifting the index. we get that up for the first time since friday and it pushes down most currencies. went.is a 20 -- a tale and australia is down .4% we
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have mining stocks lower and i mentioned strong dollar volumes. are loweraffected and than what we are used to sing at this time of the day. let me wrap things up with the markets in focus. the buying started. i will be back with more details on what is happening in just a few moments. let's me send it back to you. >> the world bank has lowered the growth forecast. they cite a slowdown in china that downgraded expectations. let's discuss this all. what does the world bank say? >> you are right about the target lowering it below. the previous forecast was
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lowered because of the moderating growth we are seeing in china. they have been managing growth expectations down and the world bank followed suit. they lowered the forecast from 27.4%. april lower from the previous target of 7.5%. the bank says that significant uncertainty affects regional risks, including downside and a sharp tightening of financial conditions. regionalrnational and geopolitical tension. the bank says that growth in the --ion is a celebrating
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accelerating. high income economies boost demands for exports and they advance in south asian economies. malaysia raised forecasts for growth this year on the back of robust exports numbers. it is china that could be the drag on forecast. it is a drag on previous expectations. chinese growth is expected to slow as they address vulnerabilities and structural constraints. >> no doubt. we are familiar with the challenges here. central banks cited complications. what are they saying? statementa bit of a
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that was bland and it is a holiday so maybe, people are not putting much into it. i am speculating. we had a statement about the statements and they say they see stability in the economy even if they say there are complications. there are some of the points that were mentioned in the downgraded and a virgin. in monetary policy goes different directions. that includes monetary easing and difficulties in a emerging economies. remain in ay andonable range right now financial operations our study. prices and inflation are basically stable. the central bank says they will
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continue the prudent monetary policy and use appropriate liquidity to realize reasonable withh and credit financing. some have called for a rate cut to stimulate growth. they say they will remain prudent and stable. >> following the beats of their own drum. how should countries in the region guard against the slowdown? we are joined later this hour. >> the world bank expects growth in hong kong to be hit by street road tests. campaigners remain on the streets and say they will not
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leave until they are offered real change. joins live. -- what is the mood? are a few protesters left. .ot many left right now, they say they are there hasrm and that been a fair number of days now. they want to stand firm and believe they would need to support each other. the authorities ended up reclaiming this and taking it away from the protesters. the have not said if they feel around his lower high. they say they need to stick it out and support each other. a few hundredably left, compared to the thousands that we saw.
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some have returned to classes during the daytime and some people have gone back to work. expected to increase later in the day. this is the first full working day. there were many people who took a whole week off. city returning to function as usual. the executive of hong kong demanded that the city should be allowed to return to normal. parts of the city are returning to normal. .here are protesters one of the other requests was that the office workers in the government building across from me are allowed to get to work as normal. that has happened. government workers came in earlier between 7:00 and 9:00 this morning and did not seem to have impediments to their journey. they could walk without issues getting in or out.
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protestersioned the wanting to engage in talks. what is the latest on that that you are hearing? >> there has been some progress made. there is preliminary talks and meetings to set up fees. saidumber two in hong kong they pave the way. there will be another preliminary meeting. no time has been set. there is progress being made. the students say they are not going to stand down from protests until real political progress has been made and real reforms in hong kong. >> thank you for that. back to david.
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rebound inecting the hong kong. >> thank you. what you have here? and do the on friday math. it is 70 points from the close and that is a jump above that. we are on the highs at this point. there are a lot of things that are a little over done. you have shortselling reducing bets the most since march. we have similar gains that we saw back on friday. which groups are we following? retailersast week was and we see them combined here. a horrendous session for the stocks last week. a little bit overdone over the weekend.
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and we willng kong see how it all plays out. the czar among the group that were expected to bear the brunt of reduced flow of tourists during the golden week. casinos are another group. there are a few things with casinos. you had a smoking gun. mays fargo says that it impact the mass-market revenue. it is not clear what they are saying. it may increase premium areas. that is where the margins are. note, the taurus may be impacted. that is what china says. cancellations are minimal and they expect full booking. we are past that now where our way?
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and i will not go into the details. the holdings are up. look at hong kong. they are still underway. short-term and long-term is doing good. >> thank you. the evacuation orders have been issued for parts of tokyo in the face of powerful typhoons. services have been delayed or canceled. live to jacob. this sounds serious. let's start with the parts of tokyo that are under threat right now. >> that is right. 23,000ls are urging homesolds to flee their
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and take shelter in public shelters one thing is that it is very central and international. ande are a lot of schools embassies. goldman sachs is headquartered there. this is close to the center of tokyo. one thing i should mention is that, about 15 minutes ago, there was loud wind hitting me windows of our office. we have been battered a little bit. the weather service says that the storm is 90 kilometers away from tokyo. is over orsure if it if we have seen the worst. is the worst still to come? >> how does this affect businesses in japan? that far, toyota announced
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it was keeping 12 factories shut close to where the storm made landfall this morning. they will be shut for the day shift and no word for the night shift. honda is going to start operations at two factories in central japan late. >> thank you so much for that on the typhoon hitting japan. the top winemakers looks to cash in on the growing love of bubbles. checking out what is driving the markets after the short break.
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>> welcome back. stocks have risen this morning. >> it is incredible. let's get more from the cheap strategist -- chief strategist. hong kong recovered on friday. occupy hong kong is in the the 11th day. regardless of how difficult it is to get back to the business of doing business, people are doing yet. does notng kong market react to the protest demonstrations and goes up and down. the u.s. market and chinese markets stay up while they are open. they are closed for national day. on the whole, what we have seen here has no impact on markets
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that i can see. >> will that change? >> it will change if there are violence in this situation. hopefully, it will not happen. there is a big difference. it is the most peaceful large demonstration that i have ever seen in my long observation of these things. going back to east germany. do with whating to the violence from students and -- it who don't want doesn't make any sense. the chinese official media.
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>> the reaction really is from u.s. jobs. >> the fourth quarter will be driven much more than it has in the past. i think that we still believe .he japan story u.s. are places to invest. we want to stay from europe and the u.k.. there is almost the thing that mr. draghi 10 or does about it? we thank you for coming and
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joining us. >> coming up, brace for an ugly quarter. >> we take a look at why.
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>> let's take a look at how htc
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is currently trading. it is better than expected earnings. taipei., let's go to what drives the earnings? if you look at the line, they missed. it is the first time they have not met her be estimates. that is heading towards for years. they did not even get to their own guidance. that shows the top line is still weak. they did make a profit. the income to be estimates. if you go down through the numbers, what we are seeing their is a nonoperating gain. assetsbe a disposal of or issues there.
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they did not tell us much on friday. they gave us a sick numbers and did not outline what went on. we saw the shares rise this morning and it is up a little bit. were initially quite excited about it. see the top line not seeing growth. >> it is expectation of future htc, and, when it comes to they have smart phones. is that about change? >> you are right. it is about to change. vocalair has been very and talked about how she wants to go into new areas. this week, we are looking to see
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them in new areas for the first time in a long time. they basically pull them off the shelf and had to continue. what we are likely to see later this week is a new camera taking on the camera area and we are goingto see tablets and into new areas that help spur topline growth. >> thank you for watching all of this for us. facing the roughest quarter in years. third-quarter profits could plunge. we are joined with a preview of what to expect. >> the numbers don't look good. analysts say that operating profits are going to plunge. the sales are down. they have been cutting profits
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daily. it is not stopping samsung. we heard that they are going to build a plant. industry mayctor be the bright spot for samsung at this point. >> you would've thought it would have fallen with market share. >> they are seeing competition from oath the half lower end and higher end because of chinese rivals putting out cheaper phones. soldufacturer in china has more phones overseas. customersis lowering with bigger screens. screened --eing squeeze from both ends.
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>> he will look at the figures tomorrow morning. has theusiness in tokyo sun shining a little bit. is whirling around tokyo. airlines are canceling and delaying fight -- flights. that is the impact. the yen is at its weakest level in six years. exports anding goods be more competitive. more after the break.
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>> hong kong citizen. impact on the economy. weather warning. automobilesns, and hits. -- hit in japan. let's get the latest on the markets right now. >> let's take a look at the underperformers. australia and the mining
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it here. you have a strong dollar and pressure on the dollar coming down. they have been talking about that. snp slashing credit ratings of this and the problem is the unique cash flow. not all of these are created equal. what s&p is saying is that we may see profits take a hit. it is credit metrics and basic resources are down. you have a bunch of minors here really. you have 15 out of the 19 dropping. the biggest drop we are seeing is across gold-mining. it has not been a good year. for has wiped out the gains
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2014. we did not see a lot. it dropped on friday. we have a lot of these things. seven illustrated thisly at this point and is where we are. year orlevels from last over two years. it shows you the decline. it is not been fun -- has not been fun. lack of inflation so on and so forth. gaphave the markets and the between long and short that is the highest in a few months. updatesus a sense of and what we should be watching here. >> a lot of things.
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there we go. theyve weekly gains and are not as far as other currencies are concerned. we have a meeting at the beginning. look at the options market. they give you an idea of what is likely to happen. and anothercreased currency is expected to drop. of german factory orders. augustpect a drop in from july. two-year low here. here we go. we had a drop here. you have a value showing an increase here. there was a value here that we recovered. indonesian.n the
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350 million u.s. dollars in the equity markets last week. 212 is the level. the weakest level. inre is a lot of hype going and after the election. we see the parties gaining traction and money is being called out of the market. we are a rebound in the market. a lot of things to watch. >> indeed. the world bank has lowered the growth forecast for the second time this year. they expect the democracy protests to slow. we have the east asia and pacific chief economist at the world bank releasing the report. thank you for joining us. let's talk about your overall
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downgrade for east asia. why did you revise the forecast year? >> thank you so much for having me on? -- on. it is a gradual decline that we and muchhe -- project of this comes from the slowing of china that we anticipate. this will grow at 7.4% year, compared to 7.7%. the rest of what we call developing east asia and pacific 5.2 24.8% --w from 4.8% and will rebound on the back of economic recovery.
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we anticipate the growth in developing east asia and the and,ic will be 6.9% leaving aside china, will actually grow to about 5.2% or 5.3%. >> you notice the latest protests here in hong kong and the impact on hong kong, if it extends any longer. outlook and you slowhat the protests will growth. what factored into your assessment? >> let me be clear that the report that we have here is callrily about what we developing east asia and the pacific. kong int highlight hong
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these estimates. at the same time, we are at the and looking at hong kong. the situation continues to develop and it is something we will continue to watch, and terms of impact on the hong kong economy and more broadly. >> talk about broadly. a lot of economists do not see the impact yet because of how -- the protests are. , in terms ofhens time, could this spread more broadly and how? >> is too early to say and it is hard to make the judgment right now. -- it is something
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that we and others will watch. what is clear and what we -- you know, if you look at what came out of the jobs report a couple of days ago -- you are seeing a recovery in high income economies that is beginning to gain some steam. that is the big story for developing east asia and the bigger economies. hope to hitchthey in exports to and benefit 2015 and 2016. boats u.s. is lifting all in the ocean, i guess. headwind hurt and be a in asia?
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>> not really. and havein competitive currencies that still have not --reciated and significant in significance, relative to trade partners. >> what about china? >> sorry. to finish a thought on exports, what is more important is the medium-term outlook and they focus oned to improving export competitiveness through infrastructure investment and improving with just six. those are the things that wall have to stay in the game and do better.
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>> in terms of policy, is china on the right half, as well? >> china, as we look ahead, we see a gradual slowing and it is slowing to about 7.4%. -- in 2016, the most important thing is that they are addressing the vulnerabilities that have developed over the last two years since the global financial crisis and at the same time, restructuring the economy so they have a more sustainable growth path. structural policies in that direction and many decisions.
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aboutant to ask you thailand's growth. down fromhe forecast 3% earlier this year. , whatlitary coup d'etat are your fears with thailand's economy? >> we are looking at it now. it is a reflection of the first that,f the year and clearly, is related to the unrest we saw on the streets of bangkok and the uncertainty. there is nothing worse for lyonomic activity, particular investment, then uncertainty. we have the unrest and the
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half.d in the second predicated on this respite continue waiting. .japan's economy took a hit we are joined by thomas and steve. the general overall impact. household spending has declined each and every month.
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in august, it was down. we look at the charts. if you want to draw a circle the red signifies a drop and you can see that it was down 4.7% year on year, having an impact. consumers deal with inflation and it is running faster than wage growth and impacts consumption. >> you drive. >> i did. >> not a japanese car? >> what is the impact on the big-ticket sales? >> it is having a big impact on car sales. not only domestic. foreign, as well as. you look at
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.he domestic brands that are up more inkely to be down the next six months because it gets more difficult. >> there are other items. .efrigerators are taking hits >> yes. consumers purchased those in advance of the sales tax increase. there has been down numbers every month since the sales tax numbers -- sales tax hike took effect. >> thanks for joining us. >> coming up, lower growth in east asia. and theiscussing that rest of the top stories after the break. you are watching asia edge.
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>> welcome back. the data shows -- chief strategist. impact from the protests on hong kong business is minimal, if anything. >> totally agree. avid reader of the people's daily -- >> you have to be, china watcher. >> this is horrible for hong kong business and the financial it, it'sll the rest of nonsense. it went down because of the same reasons the european market went
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down and the same reason the u.s. market went down last week. >> doesn't speak to the trust that international investors ?ave with hong kong people say it will take a reputational head. .here is quiet they are peaceful and composting. they are doing their homework. democracy isant good and not bad. also it's a people have a different system in mind. this is a good thing that is happening. case, then this protests will die down and china will have their way in 2017. the point has been made and it is important, to the credit of hong kong. thiswonder if you feel
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keep dragging on. they want them to resign. they do not want beijing in 2017. how did they compromise on that? where is this going? >> there is no compromise. the point has been made. a lot of students believe that is the case. people call this an occupy movement and it is not, actually. it is not the old democrats of hong kong who are leading this. .hey have a little extra life >> you are saying they made the point. >> they made the point. because they are young people, beijing is actually listening. they would not be if it was an occupy movement. that was a dying operation to
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weeks ago. >> we should buy back, at the these levels? >> absolutely. >> it is unjustified what happened last week? >> no question. friday, in the u.s., we saw a great jobs number. that is the same reason the u.s. did. basic macro reasons. >> global macro reasons. >> interest rates. >> no question. u.s. will raise interest rates next year. >> is it as strong as it was? >> probably not. there was good and bad news in jobs figures. 180,002 240,000. participation was the lowest.
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>> paychecks are not growing. >> that is a problem. not surprising. the jobs created are in the low-end of the market. these are in the low-end and flipping hamburgers. nothing against flipping hamburgers. it is better than not having a job. one reason the labor force is low and is that a part time jobs at mcdonald's does not pay you more than social security. >> not a happy career make. no offense to burger flipping, if that is your career passion. let's talk about financing. 2015 is going to look different. growing the u.s. is not by leaps and bounds. the forecast for the u.s. is 2.1%. i don't know.
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this is not a tremendous move forward. europe is on the edge of recession. no question about that. there is deflation. not going to work out too well, as long as the tensions with russia persist. >> you told us to stay away from europe. >> oh yeah. absolutely. >> where would you go? >> the u.s. and asia. you have to be selective. i would continue to invest in japan. properties are cheap right now. >> german property is cheaper. >> you have some property. is that what you are saying? >> for what i pay for rent, i could buy a house in germany. >> we could all do that with
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what we pay in hong kong rent. thank you for joining us. >> we take a look at the top winemaker. >> on their own doorstep.
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taste for growing wine has prompted a big name in the business to set up shop. >> rather than sending bottles to china, they produce wine on the spot. is hoped the harvest could be the start of something big thathe french luxury and has already established in the americas and australia. they want to be large on the and producescape
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sparkling wine in china. on needs opinion, chand to let chinese customers taste the wine. the demand for wine is growing rapidly. this is why they have built a chef 10 oh. -- chateau. theedwine enjoys much of shelf space. research shows china drinking its way through cases of wine last year and one million of them were sparkling. >> we have to be made up to the same standard. to make it attractive to local chinese taste, we stress of aroma and texture is fresh and for our so it is easier customers to accept it. , they encourage
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foreign vineyards to grow grapes in china. >> in terms of service, the government enacted policy to protect foreign companies and includes legal interests to build chateau's. the policy protects for seven years and the property rights of buildings and chateau's. >> they anticipate that chinese consumers will find it irresistible and boost production to 300,000 bottles. >> before we go, an update on the protests in hong kong. we take you to live pictures right now. >> it appears that several people have left and those who remain say they will not quit until the authorities offer something tangible. >> they allowed civil servants
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to enter hong kong government offices. the protests are in their 11's day -- 11's day. there are talks between student
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