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tv   Trending Business  Bloomberg  May 10, 2015 9:00pm-11:01pm EDT

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yvonne: good morning. i'm yvonne man and this is trending business -- "trending business". we are going to be live in beijing, tokyo, and for this hour. this is what we're watching this morning. china forced to act again in the face of a slowing economy, rising corporate debt and weakness in property markets. however they say they have many policy tools in the box. sharp seeing its biggest fall after saying it may need drastic
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reforms. it is expected to announce it will cut capital by 99%. is it time to abandon athens? chancellor merkel is being urged to let greece leave the euro. let us know what you think of today's top stories by following me on twitter. don't forget to include #trending business. let's stick to china. they cut rates for the third time in six months. latest rates showing the economy slowing faster than the economy would like to see. christina, any surprises? reporter: not really. milduts are relatively ones. the kind -- cut wasn't really a surprise. but the speed of it had people set up a little.
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index friday showing the factory remains. consumer prices remain week in april. in april. plenty of space to cut rates, but so far they cut -- serve more to get support for the slowdown then drive a rebound. both hanks and corporate have high debt levels of the moments. lending needs to pick up dramatically. especially not ready for small private businesses government wants to see growth in. slowing economic activity still laying on balance sheets. ighing on balance sheets. remainterest rates still high, although they have shifted down a little bit since the end of january.
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that move hopefully dries things to talk more departments and get people to save more and eventually drive people to the consumption economy they want to see. yvonne: christine hah joining us live from beijing. the reaction to the rate cut. we will take a more detailed look at that story later on in the show. we want your opinion, so please tweet and include the #trending business. china and hong kong markets get underway in 30 minutes. singapore and malaysia have gone online. here is a look so far. david: fairly clear reactions. we are expecting the chinese market to rejoin the party. let me remind the viewer's what happened. a great rally on wall street. that is what we woke up to. a very good lead coming from new york.
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acrosslooking at gains the region. it is a very good day to say the least. japan, up 1.4%. taiwan, malaysia and singapore. majors, key processes, not a lot happening. really copper prices seems to be the standout. closer to $300 now. copper prices were close to 240 per pound. that is able run. --a bull run. take a look at the nikkei 225. sharp, we all know the problems with the company. debt on the balance sheet close
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to a trillion yen. dramatic news this morning. the reason why we are seeing shares down the most on record. the nikkei newspaper reporting that sharp was planning a huge cut in its capital. from ¥120 billion, planning to reduce that to only ¥100 million. that is 830,000 u.s. dollars. big move down. we knew it would be a bad day. so nothing else to say. 25% today, very bad. back to you. you david.nk another japanese stock we are watching is toshiba, also plunging after withdrawing its earnings forecast over improper accounting. live from tokyo.
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what is going on here from toshiba? we are seeing the fallout from the accounting probe a launched on april 3. at that time they only said there is some potentially problematic accounting in their construction business. then on friday they suddenly ,ithdrew their annual forecast canceled year and dividend and said they might have to restate earnings going back as far as 2013. we know very little about what these problems are other than their power systems, social infrastructure units, accounting for 11% of profits, might have understated the cost of the business -- to the business. the company isn't due to report earnings in june and we are hoping to hear more about what is happening. 17% forshares falling, toshiba. thank you for joining us today with that.
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let's take a look at some of the other stories we are watching. here is a roundup. zeb: the next few hours could be crucial for greece. they allow talks continuing in brussels. european creditors threaten to restrict athens access to funding unless alexis tsipras present a credible reform package. they are in such dire straits that some members of angela merkel's political parties a greased should default. they believe that will benefit -- euro and all-out greece allow greece to handle its own reforms. in a small sign of august, as spoke bytsipr phone twice last week. goldman is bullish on the economy. despite a string of economic -- bad economic data. current conditions in china parallel last year, i find that government will step in to boost
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short-term growth. she cites a combo of monetary and fiscal listening. the bank of china announced its third interest rate cut in the past six months. this goes with two reductions to bank ratios and target injections of liquidity. this is bysts say the disappointing april trade acres. they say external demand will give help -- china healthy jump in. i don't giant toyota has big plans after a record year. hasutomobile giant toyota big plans after record here. it plans to buy back shares. toyota sees profit rising to $18.8 billion in the fiscal year ended march. they are benefiting from a leaner business plan put in place in 2013. banned adding new assembly
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plants, leading to higher efficiency at existing plans. the revamped lexis adding to the popularity with consumers. despite the turnaround, toyota numbers are too conservative and will likely be resized -- revised higher. this hour,king ahead another rate cut in china. could there be more to come? hear from a leading economist who still sees room. next we are talking the bench and the opportunities here in the asia-pacific. and the opportunities here in the asia-pacific. ♪
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yvonne: despite a drop in global business, brazilian aircraft maker is optimistic about growth prospects.
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haslinda amin has more. optimistic, but signs of a slowdown in plane deliveries. they are down to the low 90's in from morewo years, than 100 in the years before. is it the new normal? joins usdent and ceo this morning exclusively on bloomberg. good morning. we are talking about how we have seen a slowdown overall in demand, but not the case for commercial, which you are in charge of. guest: in the last two years we have delivered above 90 aircraft. we want to deliver a little bit over this year. haslinda: that is despite the slowing region. a good part of asia seeing slowdowns, china case in point. even the likes of singapore. it is slowing down a
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little bit in certain regions, however other regions are picking up. the case in the united states. and being very well accepted in the u.s. market. in the last two years, growth of 80% of sales. a lot of activity in the united since they make a lot of money and they have been able to and corporate causes have changed. i think we are doing very well. that is the beauty to have different aircrafts. haslinda: you talk about the demand in the u.s.. can you continue to rely on the u.s. market? it is revamping, but that will not continue for years to come. guest: but it is not only the
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u.s. market. --re is a trend also haslinda: what kind of market? guest: we are global. haslinda: that show promise. guest: asia, asia-pacific. haslinda: specifically china? guest: china, indonesia, smaller countries as well. i think the whole of the asia-pacific has a lot of opportunities, as the economies are growing and more and more people are flying. right now asia-pacific represents one third of the world traffic. to represent much more and that they are going to -- they are going to represent much more than that. why there is a lot of interest in the asia-pacific region. we believe there are markets that are much more suitable for smaller aircraft that can be
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much more efficient to fly around. haslinda: what potential do you see in markets like india and indonesia, where more and more people have more money? there are moving away from taking the train and they are now flying. what kind of growth potential do you see? guest: these are the reasons we are looking at them to give an example. a letter able in these countries -- a lot of people in these countries, a lot of violence. there is a need for aircraft. india, they have a very poor infrastructure. and a huge country. these are the opportunities that we are seeing. haslinda: what kind of growth do you expect to see in markets like india? guest: i would say for asia-pacific in general, the potential for 1500 aircraft in the next 20 years.
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a lot of potential. 900 only in china out of this 1500. haslinda: in the next 10 years you are looking for asia to contribute 20% of overall demand. can you beat that estimate? given your optimism? guest: yes, the region is growing. we are counting on this region and investing here in order to seize this opportunity. we see a tremendous opportunity because right now we are relying on flying on dense routes and with a lot of competition. on the other hand, we are seeing more than 800 markets that are more suitable for a small oher, narrowbody. haslinda: what do you hear from
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clients? recently we hear of a spate of air disasters. has that impacted sentiment? guest: a little bit, of course. people don't like to see this kind of event. but we believe that everybody still recognizes that air transport is very safe and in terms of transportation, it is probably the safest way to travel. go,inda: before we let you executive jets. in terms of demand from brazil, china, that has been selling. do you expect that to reverse? guest: it is not my business unit, not my core business, but i can tell you there is a slowdown in business jet, especially in the midsize category. but the market will come back. we have very good products in this business unit.
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we are sure that we will do well in the future. it is just a matter of markets coming back a little. haslinda: just a matter of time. we have to leave it there. of course the interview coming exclusively on bloomberg. north korea says it successfully tested a missile. pyongyang threatened to as tax south korea training they entered northern waters several times recently. the north disputes the maritime order sent by u.s. forces after the 1953 korean war. china and russia have strengthened their energy ties signing a range of agreements in moscow. xi jinping was in russia to attend ceremonies marking the 70th anniversary of the end of world war ii. russia wants to expand relations with china after links to europe soured over the ukrainian
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conflict. the type that has made landfall in the philippines with winds gusting up to 220 kilometers per hour. it's darned across the northern part of the main island sunday night. of peopleousands have been evacuated from their homes. coming up next, 100 million smartphones sold in china in the first quarter. we will tell you who the top sellers were when "trending business" returns. ♪
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yvonne: this is "trending business", welcome back. most likely tots be full-year profit forecast. the company like we had an operating profit of nearly $8 billion in the fiscal year that ended in march. 7.5 tops the target of billion dollars from november. demand contributed to the increase. hong kong's richest man is looking to singapore to help finalize his multibillion-dollar push to create britain's against wireless carrier.
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he is selling a $1.7 billion , and o2 u.k. to a singaporean wealth fund. it has attracted investors in canada and the uae. google has opened a first campus for startups and entrepreneurs in asia. it is located in south korea. --has designed a faster foster cooperation between fledgling companies. extensive smartphone use is the -eason for taking sol - picking seoul. the latest findings from -- analystdo list idc. what kind of contraction are we talking about? guest: the market has fallen.
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it has shrunk by 40% -- 4% in the first quarter of this year. formerly we have seen sales booming. having said that, this growth is there is stillly nearly 100 million units of smartphones being sold. still a large number. but the growth not very good for the long term. china saying the future, is seen as an emerging market, but actually there are many people already with smartphones and it is getting saturated. the growth is towards the bottom end of the market. the candy bar phones that kind of thing. they are trying to get them to move on to smartphones. that is where the growth lies in china according to idc. yvonne: chinese consumers still by 100 million phones in the first quarter.
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what names are out there that they are preferring? reporter: top of the list, apple. really popular. it has helped turn around apple in china because it was languishing hind competitors like xiaomi and samsung. xiaomi is now number two in terms of preferences. samsung really taking a hit down to fourth place. , was dominantago in china. since pretty much 2012. really taking a hit from other smartphone makers in china. at the end of last year when apple released the iphone 6 with the bigger screen, that really gave a big hit to samsung. she sees apple being the winner for the meantime. apple is veryhat
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strong in china. with the apple watch we see some android users moving to apple. three local giants, they all business models and technologies in the market. for samsung, they really need to push it harder in china. reporter: consumers show what they call volatile brand presence in china and sales are flat. thank you. next, more credit concerns in china. the latest corporate defaults and wider implications. ♪
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♪ top stories trending this hour, rising corporate debt has propped in china to cut interest rates for the third time in six months. they reduced rates by one quarter of a percentage point and raise limit on what banks can offer savers. a goldman sachs forecaster expects growth to rebound in the coming months. this morningl ever after saying it may reduce capital and issue preference shares to sure up its balance
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sheet. will announceker a decision on capital on may 14 as part of a midterm plan. tokyoa also plunging in after withdrawing its full-year earnings forecast over him proper in counting -- over improper in counting -- over improper accounting. they say they may have to revise the earnings from last year and earlier. they have brought any third party for the investigation. let's go to david who is monitoring the market openings in shanghai and hong kong. quite a turnaround from last week. david: it was a fairly bad week last week. friday was a little bit better. here is what we have across the asia-pacific. we are seeing the chinese markets open up. we had the rate cut and inflation coming in at 1.5%.
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a slight uptick from march to april but still below expectations. fairly benign there. hong kong are at 8/10 of 1% and shanghai is that 6/10 of 1%. let's break this down and take a look at shanghai. in terms of the big sector movers, you want to watch out for the banks because of the rate cut. it gets a big boost when you have these large losses. we have ample liquidity. that is the overnight lending rate. 1.3%, so fairly depressed levels which is probably good for the market. watching? takee a look at japan. two stocks that are doing well. toshiba, let's even can load
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this properly. not pretty. a big drop over there. revisepany was having to -- they withdrew their earnings forecast. they started this probe in early april into what they call improper accounting from their infrastructure projects. what they're doing right now is that it may have to revise earnings from as early as fiscal year 2013 to reflect those changes. we don't know when they will be reporting earnings. at least not until next month. that is what is happening with toshiba. you look at sharp, not a good day. they will have to reduce its capital. may 14 is when they announced plans on their capital. i will leave you there.
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thanks --yvonne: let's get back to china. third rate cut in six months after poor trade numbers last week. this was largely expected, wasn't it? it was very much expected but the speed says something about how concerned beijing is about the slowdown. we did have lower-than-expected trade numbers. soft andprices are producer prices are still in deflationary territory. a lot of incentive for the central bank to move now. just to keep it in context, these rate cuts have really been serving to provide some support to the economy rather than stimulate real growth activity. corporateks and businesses with high debt levels last year.
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no one is really rushing to go out to lend and borrow. instead, it is just one of a few approaches the central bank has been taking to ease in a more controlled manner. along with cutting the bench mark rate, they've also lowered reserve ratios that inject liquidity into banks in a variety of ways and also tried to bring up the money market rate. they also raise the ceiling on the positive interest rates, which is designed to hopefully make deposit rates more competitive for banks to get funding from those channels. what is next year? -- next here, and what are economists expecting? is fiscal stimulus in the cards now? christine: i have a tricky line to walk with that. to do this and
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more indirect and targeted ways rather than any outright fiscal package. take a listen. trade-off.e a tricky they got into this mess by having miss priced credit and too much lending to too many developers, building too much stuff. now they want to make sure monetary conditions don't get too tight but they don't want to deflate the economy with another debt boom. economistsbloomberg are expecting the government to use more targeted measures to keep the interbank rates lower and a possible further rate cut in the third quarter. citigroup sees another 50 basis point cut this year. yvonne: more signs of stress in china. a coal importer has become the second company to default on a dollar-denominated bond this year. a $13.2- it missed
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million payment despite the 30 day grace. . -- 30 day grace period. the company has been distressed for a wild and coal prices are not going up anytime soon. plus, the company is depleting cash rapidly. ofplunged 78% at the end 2014. $58 million, just enough to cover $13 million coupon payments. but it also has to pay for a lot of other operational expenses. this is not the first time the company -- the investors are set to get some losses. it did a distressed exchange about two years ago, offering investors less than $.40 on the dollar. so some of the bond investors have already suffered a haircut on this credit. yvonne: so tell us more about what led to the downfall.
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>> it is really the falling coal prices, down 50% in the past few years. the company is a cold trader instead of a manufacturer. over the past eight years, the buildingheavily on with just, which yielded little profit. so now everyone is telling me that unless there is a white night, there will likely be a bankruptcy situation. yvonne: are they looking for a buyer? reporter: i was just off the phone with a company official and she said they are in talks with a few. before an agreement to sign, everything is still very few fluid. -- very fluid. yvonne: thanks so much for joining us. maintained a won't take sides in the ongoing territorial dispute in the south
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china sea. foreign minister julie bishop says she cursed china to settle the claims peacefully and allow the safe conduct of trade in the region. >> i speak to both the japanese and chinese leadership about this and urged that there would be peaceful negotiations and that neither side take action that would escalate the conflict. we want this to be d escalated. this is potentially the most prosperous and peaceful region of the world and we want to keep it that way. yvonne: you can hear more from the foreign minister later this morning. 10:40 hong kong and singapore time. hisinping has wrapped up tour through russia and former soviet states, heading home with more gas deal signed with moscow. how much has this cemented
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russia to the east? visit,r: with this really the business side was what china is looking for. maybe the gas, they need oil, and russia has it and is pivoting east as the sanctions have really hammered the russian economy. vladimir putin put it distinctly, he said that the energy sphere is key to our relations with china. is extending the strategic partnership for five years on the daily gasoline delivery of volumes, gas quality, and where the pipeline will come across the border in northern china. they plan to raise a target of 30 billion cubic meters of gas per year. that is on the oil pipeline. they also have a deal with two
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pipelines coming in. they are crossing the t's, dotting the eyes, getting these deals in order. there was also a deal with our dif, the inbound -- with rdif which is the inbound suffered funds from russia. they will provide about $25 billion in loans. again, vladimir putin looking to china supply much-needed loans and capital at the western banks have not necessarily been there for them, to put it politely. xi in moscow marking the 70th anniversary of the end of world war ii. what they have to say about that? reporter: these are the two countries that putin said suffered the most during the war. 40-45,000,000 casualties in the war were in russia and
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china. may 8 was the day that the nazis had their unconditional surrender. -- is ve-day.ay alliestingly, the other with united states and the u.k., they were invited but the leaders politely declined. yvonne: interesting rsvp there. coming up, china cuts interest rates three times in the past six months. our next guest says there is still room to ease. ♪
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>> yemen's shiite rebels have agreed to a five day cease-fire beginning tuesday night for a
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deliveries. states led by saudi arabia led a six-week bombing campaign against the who these -- against the houthis. both carrying about 500 refugees myanmar, -- from bangladesh, and indonesia, many migrants remained stranded after they were adrift. a crackdown on human trafficking by thailand and malaysia. the king of thailand has returned home after more than seven months in hospital. the world's longest reigning monarch is now recuperating. though he is a constitutional monarch with no formal political role, he is revered across thailand and regarded as the figure.s soul unifying
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time now for a look at the big events we are following for you this week. it is budget day in australia on tuesday. pressure is rising on the government after worse than expected job figures last month and the continuing slowdown in china. one analyst described the budget as a nightmare written by stephen king and illustrated by edward much. -- edward munch. you'll is the venue for the event where over 40 countries will show off their latest defense offerings. we will hear more about the recent rally in hong kong from the company that operates the exchange. analysts expect a 40% profit jumped last quarter.
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on friday, the bank of korea is expected to keep interest rates at a record low, 1.75%. while the central bank is not action, thetake any currency officials+++
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they will have a bridge agreement until something more
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consistent can be decided, probably later in the month or the beginning of june, that will finally liberate the 7.2 billion euros for greece. yvonne: thank you so much for joining us to talk about what is going on this week. next, tourism for the masses. wavesese company makes with what must be one of the biggest tour groups ever. ♪
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time for a look at what is trending on social media. fiorina hasrly announced that she will run for the presidency. she started the campaign by
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buying the web domains of other candidates. but she forgot a critical one. she did by andg someone else did. to the site the number of layoffs that she made at hewlett-packard and it goes to show the fact that a tech executive can't even get their website right. the verge is writing, summary but carly fiorina.org and put a bunch of sad faces on it. it's not like she was the ceo of a tech company or anything. it probably wasn't her mistake directly, a staff member, but some advice for someone who wants to get into the presidency, better by your website domain name early. reporter: there are a lot of
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people wanting to get in early in china after the billionaire boss decided to take 6400 employees to france for four days. it caught the attention of the guinness world records, with the longest human chain. it is basically the biggest tour group to hit france. we can see on social media that most of the reaction was people wishing that they were one of those employees. other comments questioning a little bit about whether this was a pr thing. he has a lot of money, it doesn't mean that much to him. weibo iother people on wishing that they will have their chance one day. there is one twitter comment that i quite like.
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what are we doing this week boss -- what are we doing this week? boss we are heading off to france. yvonne: we will be heading to sri lanka to talk to the governor of the central bank. ♪
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♪ yvonne: good morning, it is monday the 11th of may and this is "trending business." ♪ we will be live in beijing, tokyo, and jakarta this hour. sharp suffered its biggest fall on record after saying it may cut capital by 99%. it is heading for a third loss in four years as the -- and a path to reform may be needed. the central bank says it has
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more policy tools if necessary. despite that confidence, this shows a growing concern in beijing. gas giants, president putin, and xi signed energy deals pivoting russia away from europe. let us know what you think of today's top stories by following me on twitter, i am @ yvonnemanntv. how are the markets looking this morning, david? david: it is looking good. it is a positive reaction. i want to mention japan. clearly a heavy turnover there on the nikkei index. and itlook at the charts will be very hard to visualize, but it seems very well supported. i just checked that chart before
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i came on. 19,428 seems to be the level. let's bring it back into hong kong. things, yous of have the rate hike, rate cut -- rate cut, rather. financials is what you want to keep your eye on. on the brokers, that is these guys here, financial services. they have been on an absolute tear. jpmorgan is saying that the good news has been priced in. if you want to be specific year, galaxy is thes, least preferred among the chinese brokerages. that is simply because they are vulnerable to rate compression.
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by the way, this group of stocks is also getting a lift. money market rates in china are continuing to show the liquidity is not the problem. day, andight, seven even currency at this point. let's wrap things up and take a boardlet me just let my and talk about europe. a big day. eu finance ministers meet and discuss greece. will we get emergency funding continued emergency funding from the ecb. watch out for lines that come up. at this point we're seeing a huge drop over the past 30 minutes or so. we are now close to 1.1150. they may be a chance of what they call an accidental default. there is a chance that something gets lost in translation. yvonne: thanks, david.
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we will stick to china on our top story. a third rate cut in six months as the country seeks to cushion the economy. we look at the very latest from our china corresponded. this is pretty much expected, right? this wasn't a very big cut as far as rate cuts. 25 basis points, relatively modest. most economists were looking at a rate cut in the second or third quarter but the bank moved very quickly after economic data over the weekend which suggests they are looking very carefully. they are making sure to keep market sentiment steady overall. they can't afford a run on stocks at the moment, either. this is more a stabilizing move than a stimulus. cutting rates isn't going to get simplyo lend more
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because debt levels already very high in china at the moment. slow economic activity is still weighing on balance sheets. it is a chance for companies to refinance the debt and the leverage a little bit. there are also other moves the central bank has been making. injecting liquidity into banks for a variety of ways. also to try and bring a money market rate. interest rates have shifted down a bit since january. all of these are designed to help liquidityo and keep it around a 7% target but not to create a credit bubble. bloomberg economists are affecting a possible rate cut in the third quarter. citigroup is looking for another 50 basis point cut this year. definitely more to watch for. those top economists saying there may not be a hard landing, so we will see how things go from beijing.
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let's take a look at some of the other stories we are watching this morning. japanese display maker sharp is falling by the most on record. it is looking at a cut to its capital and is looking at preferred shares for its balance sheet. they plan to cut capital by more than 99% to $800 million. this is the third loss in four years at sharp. the company says they are seeking drastic reforms. they are struggling under the weight of $8 billion in total debt. although they count apple among its customers, is huge debt load has countered growth plans. they had the biggest intraday drop since 1974. another text stop -- another tech stock that was dropping was toshiba.
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it is withdrawing its earnings forecast and scrapping the dividends. a third-party committee is also being formed to further investigate. toshiba makes everything from nuclear reactors to consumer electronics and says it may have to revise earnings from fiscal year 2013 and earlier. according to a spokesman, several construction contest -- have beenon contracts lost. they say the magnitude is not yet clear. the stock is down in tokyo. auto giant toyota has big plans after a record year. on friday, toyota forecasted trumpets that the last year's record. they are also forecasting global expansion thanks to a u.s. sales rebound. $18.8ee profits rising to billion in the year ending in march. profiting off a leaner
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business plan put in and 2013. also, a revamped camry and a refreshed lexis in the u.s. added to popularity with consumers. analysts say that despite the turnaround, toyota's new numbers are too conservative and will likely be revised higher. yvonne: china's appetite for smartphones has been slowing and is now at the point where the market is actually contracting. those are the latest findings from industry analysts idc. this is the first inclined and more than five years? -- first decline in more than five years? in the first quarter of 2015, we saw them -- result a market contracting by .4%. it is still a huge number but
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idc is saying that the growth has been slowing. in can see a steep drop 2013, tapering off in 2014, but now we are the negative. idc said that where they see the growth is in the bottom them to the market where people are holding on to those old-fashioned phones more than upgrading themselves. that is really see growth in the market in china right now. chinese consumers still bought nearly 100 million phones in the first quarter. --ch was to they prefer? which one do they prefer? reporter: apple only became top dogs after they released the iphone 6 and six plus because that took away some of the market from samsung.
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as recently as the beginning of last year it was dominant in china. you are seeing a lot of competition from other players right now. iphone, with larger screens them before, taking away some of the premium market from samsung and eating away at that. samsung really struggling a little bit there to keep its market share. idc says that keeps growth flat in 2015. it is also because consumers are changing their minds about which brands they want to buy which is creating consumer volatility in china. especially because of the smart watch, android users may be moving to apple. existing smartphone vendors in china are looking for a strategy for growing, perhaps looking at other markets and moving to india, and also finding other ways to market their products, perhaps selling online directly to the public instead of being
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tied to distributors. yvonne: coming up later in the show, the high life on the high seas. we will look at how the super yacht business is adapting to china's growing interests. but up next, another cut in china and a chance of more to come. a look at the tools available to the pboc. ♪
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yvonne: welcome back. we're talking china this morning. thank you so much for joining us. the markets have been pretty prepared for this. >> the latest data was week. there is but the of speculation in the mainland media and in the market that something would
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happen soon and in fact, a lot of economists and investors are looking at deeper cuts. we may get some decline in interest-rate markets, but that will be a small negative. yvonne: they talked about this as asymmetric easing. will they put this back in motion a little bit, or will it be enough to present some of the fluctuations in the stock market? dariusz: and the chinese stock market, things are not a stretched as people think they are. when you look at how the valuations appear in other markets, they are more expensive historically, but not by the same margins as elsewhere in asia. in relative terms, chinese equities are still offering value.
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i think they will continue to move higher. some of the liquidity that is cheaper now will certainly moved to the equity markets. but policymakers hope that the cut will stimulate actual economic activity and i think it will help to do so in particular by boosting the real estate have slowed down and i think the slowdown is coming to an end. i think that would provide a significant boost to overall gdp growth. home sale volumes were up about 18% last month from a year earlier. is that a sign that things might be improving? dariusz: i believe so. the data is only partial, it comes from bigger cities. but there is reports that prices are also stabilizing and now that mortgage rates are cheaper after three cuts in the lending ,ates over the past six months
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a lot of potential buyers will be drawn to the market. the policy easing will be simulated, especially for the private part of the chinese economy. yvonne: the big banks, morgan stanley cutting their bets on china. do you think there is still opportunity to get into this market? dariusz: i think we will still continue to appreciate the trent. -- the trend. the market doesn't seem cheap anymore. but because we are at a time when the central bank is quite aggressive in stimulating the economy, there will be more liquidity, liquidity will be cheaper, it will be more advantageous to borrow, it will be better in other asset classes, and the outlook for yvonne: top economist talk about a hard landing area happy
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already reached the bottom? quarter willcond see the slowest growth. on wednesday, we will confirm the things that are not going the way that they were planned to go. it is still the first half of the year. adaptive managing -- this versatile time for them to boost growth to such a level that the recovery will happen in the target will be achieved. likely will the stimulus be a recipe for this? guest: it doesn't really work the way in china that it works elsewhere. implementedably be fully. i do not expect an extraordinary
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-- what usually happens with arestments in particular accelerated. they are funded at a local government level through spending and bank lending. the government is going to pull out more investments that will push big companies to take them out. it will push local banks to provide funding. this is how aggregated the whole economy will accelerate. there is still time for them to and to achieve the growth target. yvonne: inflation numbers are week. pmi numbers have been in contraction. eco-data for about china, what is it that you are looking at -- that you are tracking when it comes to growth? would you see that the 7% target is going to be reached? based -- it is showing significant signs of slowing of momentum when you
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look at the sequential growth of gdp and all the other measures you mentioned. the reason why we are confident is also much what the economy is going through, but how much stimulation of growth within that timeframe of their target. year was weak.e they stimulated the economy and the culture and they think they still have enough control of the economy to do it. again this year. yvonne: thank you for joining us. stories making headlines, china and russia have strengthened energy ties, signing agreements in moscow. the president was in russia to attend ceremonies marking the anniversary of the end of world war ii. russia once to extend relations with china after the conflict in ukraine. the two sizing cretins -- agreed
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to increase gas supply from siberia to china, but did not sign deals on oil. the king of thailand has returned home after spending months in the hospital. the monarch is recuperating at his seaside palace in phnom penh. king is revered across thailand and is regarded as the country's unifying figure. his disappearance from public life coincided with one decade of social instability. refugees from myanmar and they would this have reached indonesia. thousands more migrants have remained stranded. by smugglersndoned -- activists say another 7000 -- 8000 people are still at sea. the cracked on human trafficking by malaysia has prevented them being able to land. teambuilding at a new level. how one chinese company's
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travels are creating buzz online. ♪
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yvonne: this is trending business, welcome back.
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the company likely had an operating profit of nearly a billion dollars in the fiscal year. that tops the target of $7.5 billion from november. mobile phone businesses contributed to the increase. softbank shares up 1.5%. the u.s. economy is doing well but not that well. while employers added fewer jobs than expected, the total was not enough to fuel the recovery is running out of steam. the unemployment rate fell to a seven-year low. hand, that was enough to stoke speculation that the fed will raise rates soon. analysts are still looking at september at the earliest. here's is a look at what is trending on social media. zeb: we are talking politics. carly fiorina -- she is nominated.
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she is running on a tech-led platform to be president. here is her website. she very smartly had the idea to buy the domain name of rival candidates and redirect them to her site. hillary clinton.net will take you here, for example. her team forgot to register the.org site of carly fiorina. , andomebody else did redirects them to a site where you see thousands of sad faces, and that is related to the number of people she fired as ceo of hewlett-packard. her tenure there has been subject to a lot of talk in the united states. it's aing as ceo -- quote you blow saying on twitter. a lot of people having a field day with this because somebody bought the site and put a bunch of sad faces on it, not a way you want to start your political campaign. take a look at what other people are saying here. talking about the fact that a tech executives -- this stuff
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complicated -- it's not like she was ceo the tech company. in fairness, it probably wasn't her fault directly. doesn't reflect well, though. i'm sure she can overcome this one. the lesson to those running for president -- by the domain early. >> you cannot make one mistake. there is a boss out there at the moment who is not the any mistakes in china. probably one of the most popular bosses to have. taken 6400 -- he has of his employees to france for four days, just because. they are basically taking over paris with 140 hotels booked rid they have also toured the south of france. you can imagine some of the comments on social media, most of them are "omg i wish i could
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be one of them." there are others wondering if it is just a pr stunt. well, he hashat -- so much money that it doesn't make that much difference. zeb: clearly. >> is this a way to motivate employees? not all could go. zeb: couldn't motivate you? >> absolutely. zeb: let's go to france -- yvonne: what about the other half of the company? tot, gdp winds of the visit moscow, that includes a celebration marking the seven years -- 70 years since world war ii. ♪
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yvonne: stories trending this hour. fears over rising corporate debt have prompted china to cut interest rates for the third time in six months. by one quarter of a percentage point. the top forecaster in china -- goldman sachs expects growth to rebound in the coming months. the worst fall ever this morning after saying it may reduce shares to shore up its balance sheet. stocks slumped as much as 31%.
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the debt ridden display will announce a decision on capital on may 14 as part of the midterm plan. -- waiting in a saturated marketplace. force quarter sales down since 2009. according -- 98.9 million smartphones were sold. let's go to david with a look at what is moving the market. following -- the reason why you want to pay attention to this company is that it is the investment arm of china's largest conglomerate. what we do know is that there will be announcement great other than that, the company plans on raising $1 million in hong kong. he will be selling shares spot 48 and 22 spot
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42 hong kong dollars. from friday.count massive fundraising. -- gettingecurity approval in fact at additional shares here, and we are looking at perhaps that's no -- we are looking at a 17 spot 18, that is the price. that is the description price. these two chinese power producers -- these are the shares he were looking at. the shares listed here in hong kong. dubai -- two days after they are putting out a british call and raising its rates. we are looking at a price target at 13 box a pop.
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said, property developers will be helping demand. real estate was down 3%. i will be be there for now. yvonne: thank you. sharp and toshiba are both taking a hit in tokyo trade this morning. following has been this all morning. we will speak to police in a moment, but let's go to grace. what is behind this record dropped? the company made an announcement that it is considering to cut capital and to issue stocks. only three days ahead of a formal announcement of its
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midterm plan, so it was a very surprise to the market. yvonne: very worrisome for investors of sharp. how would this affect them overall? should they be worried? actually, it is not good news for existing investors. heard -- it will make the company easier to pay dividends. it it self is not bad news, but what is bad is that it is also issuing preferred stocks. those lenders who hold preferred stocks will have priority in receiving those dividends. if those preferred stocks is
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converted -- it it would mean a dilution to existing holders, so that's chance to receive dividends. thanks so much for that. toshiba now, withdrawing its earning forecast over improper accounting. what is going on a toshiba? is from theis company's accounting probe that they announced in april. they said there is some construction projects that had fishy accounting, and they have lost -- launched an investigation. they canceled a year and dividend and they said they might have to restate earnings going back as far as fiscal 2013. the company has not released a know thatail, we just
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their power systems projects as well a social infrastructure, it is a sprawling business that covers everything from air control traffic equipment to high to electrical power. may have to restate their earnings. for institutional investors without dividend income and with potential the earnings that supposed to underpin the share price now being put into question, hoping toshiba is becoming a difficult thing. yvonne: the company will not announce earnings until june or later. the lack of information here it self -- it is troubling how bad could this be? reporter: indeed. whetherany has not said or whether it was intentional or not. just to give you some idea, the power systems and software search infrastructure businesses accounted for 11% of operating
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profits of the potential damage significant. yvonne: thanks so much for joining us. in indonesia, hopes revive flagging exports by getting trade stops from europe back on track. tommy is standing by in jakarta. what is the strategy here? if you look at the background, the launch of the eu indonesia partnership agreement 2012een delayed since because of several issues, including reductions, service liberalization, and restrictions on foreign ownership. those issues are affecting several key sectors of indonesia. palm oil, which employs workers from 3.5 million indonesia households -- exports are searching. they are concerns with the eu's
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environmental regulations for its second is wood and paper products. the issue is about controls. the import of illegal timber products into the eu and keep the eu market open. thirdly, there is a fisher with indonesian exporters to you-found it hard to comply with food and safety spenders. various exported goods we are currently losing business duties,of high import totaling 22.5% charged by the eu while other member countries paid 0%. saidrade ministry director the ministry was currently preparing its newly-revived draft and the government will start negotiation with the eu on june 15 in jakarta. yvonne: one month to go. thanks so much.
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,hecking out some other stories eu finance ministers meet in brussels later today, just hours before greece has to pay $840 million to the imf. the government in athens needs to be able to show some form of ofgress to persuade the flow funding. angela merkel is said to be under a growing pressure from within her own party to give up on greece and allow it to leave the euro. that would strengthen the common currency. -- is looking to singapore to help finalize his multibillion-dollar push to create written bosch biggest wireless carrier. he is selling a $1.7 billion singlef hutchinson to a fund. the deal has also attracted investors from canada and the uae, which will help ease the financial strain of the purchase and keep down debt. ofhave seen more signs
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distress, chinese credit markets are under, wind way enterprises has become the second company to default on the dollar denominated bond in this year. in this to grace. to pay $13.2 million in interest. shares have slumped in hong kong. the chinese president has wrapped up a swing through russia and two former soviet states, heading home with new gas deals signed in moscow. how much has this cemented russia's pivot east and china's need for energy? china and russia need each other. in those negotiation's that we saw previously -- this is pretty much crossing the t's and dotting the eyes, giving more specifics on the pipeline.
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the pipeline that will eventually piped natural gas into china via siberia, through the gas fields in eastern russia in siberia. extension of the shooter to partnership or five years, they have also agreed on the daily gas delivery volumes, the quality, also the entry point for the pipeline. at least one of the pipelines -- vladimir putin put it -- the energy sphere is key to our relations between china and russia. a busy week for the chinese coming towith mohdi beijing -- he went to kazakhstan, kind of pushing his new silk road route that will go through on. he then went to moscow for that world war ii celebration and that he ended the trip yesterday in belarus, minsk. yvonne: we talked about the parade in moscow marking the 70 year anniversary of world war ii.
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what did vladimir putin have to say about that? stephen: what we got from china daily is probably more interesting. they had a big editorial in the paper today saying, it was a shame that the other allies in world war ii against nazi germany did not attend, even though they were invited -- the united states and the u.k.. paying with their next up to do and as the tanks rolled through, v-day,ting the ebay -- when nazi germany had their -- the end of the war. on may 8. it was may 9 in moscow. this was just an opportunity for them to show that they are standing side-by-side. yvonne: thank you. urging restraint, australia pushes japan and china to settle the south china sea dispute easily. an interview with foreign minister julie bishop after this break.
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yvonne: shiite rebels agree to a cease-fire beginning tuesday night to allow a delivery. the coalition of houthi has waste a bombing campaign against -- you force of the president to flee and are in control of the capital. airstrikes over the weekend, including what the u.n. called indiscriminate bonding of the houthi stronghold. north korea says it tested ballistic missiles. it all military requirements. pyongyang threatened to attack warships after claiming they entered northern waters. the launch disputes the maritime border set by united states forces after the 19 -- war.
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-- has made landfall in the philippines with winds gusting at 220 kilometers per hour. the category five norm cross of the northern part of the main island of luzon on sunday night. several thousand people have been moved. is suspected to head north, potentially heading taiwan and southern japan. there seems to be no such thing china, which is becoming a leading force in the world of ultrahigh and boating. super yacht makers in italy are now majority-owned by chinese company. chinese tastes are influencing the designs. ♪ china's uber of wealthy are grabbing at all. tastes.ade for chinese
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you would think, though, during the corruption crackdown, such ostentatious displays of wealth and be cap, well, you know, below debt. not so, says -- >> we have mostly concentrating not on the public sector, we sell to private owners. clients are really entrepreneurs . high networking individuals, for sure. people which have been working very hard their whole life, you know? they made a fortune in the recent years. reporter: because got owners tend to be younger than those in the west, design changes were needed to suit both age and cultural differences. >> the boat is mostly used for daily use, as they do not spend hours and hours in cooking, ok? we moved it down so that is such a way that -- we extended the sofas in order to give the client possibility welcome a lot of people. because most chinese
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buyers are not necessarily into rths --g, some of the beert here is a side berth and this is the master suite, probably the average size of a hong kong apartment to it again, smaller than most super yachts because they want more room for entertaining. the master cabin to a multifunctional room, could be karaoke or meeting room. downstairs -- it is the feeling of not enough space. reporter: china is creating more space for super yards, with new marinas throughout the perl river delta and up and down the entire chinese coastline. you can freely move from one place to another. in china, it is just the beginning. reporter: so is the
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anti-corruption campaign. there is an old saying in boating, we can all take your for china. red sky in moehring, sailors take warning. yvonne: plenty more to come on bloomberg. you are watching trending. ♪
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yvonne: you are watching trending business. welcome back. australia has said it will not take sides at sea dispute. talked to jason scott -- she has urged china and japan to sell claims he's fully and not to put trade under any kind of threat. we don't take sides in
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these disputes. we ask countries and negotiate peacefully. our interest is to ensure that the seas are free for navigation , and more important triggers are through the indian ocean and to the north and so we are very keen to ensure that countries settle any disputes peacefully. reporter: what about the term, the great wall of sand? julie: that is an interesting term. i'm sure there will be other descriptions, as well. both the japanese and the chinese leadership about this and urged that there bps for negotiations and neither side take action that will escalate any country. we want this to be d escalated. the mostotentially prosperous and peaceful region in the world and we want to keep it that way. sayster: the philippines that china used a radio toward philippine planes away in south china sea airspace. do you think the prospect of another air sewn over the south
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china seed is a real risk? julie: countries have been discussing it and i believe they made the position quite plain to china that they would be deeply concerned if they were any an erroro impose identification zone over the south china sea. australian made his position plane when such design was proclaimed. reporter: you came to the position of the foreign minister -- emerging as a serious threat to world stability. thatyou been surprised islamic states have risen? do you consider to be a threat to global peace? julie: i certainly see it as the greatest national security threat that australia currently faces. in my travels overseas, whether i'm in europe or the net is dates or southeast asia, wherever i travel, the issue of raised as as is serious threat. i see the ideology as the most
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poisonous, barbaric ideology that we have seen since the second world war. it is a significant stretch when you think that about 80 or 90 countries claim that their citizens are taking part in the conflict of any rock in syria on daesh andf day ash -- we are taking it exceedingly seriously and providing resources and more support to our security and law enforcement and intelligence agents see so that we can dart -- starve this barbaric terrorist organization and i have found that this is been a global response. more on thatan get and other top stories, plus you can watch as life wherever you are on the bloomberg at. -- bloomberg app. zeb: politics attorney today. thes dominating
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conversation. on twitter in the united states, after carly fiorina announced she is running for president as a republican. take a look at this. the campaign getting off to an embarrassing start after fiorina's campaign bought the domain names of rival candidates, and then we directed users to her own website. with one exception. they forgot to register.org. well, opponents had a field day with this. they bought her web domain and be directed users to a her record of slashing jobs while ceo of you a packer. as one twitter user termed it, a major fail for a tech ceo turned presidential candidate in fairness to carly fiorina, this website is really copied it, i mean, it's on extreme as she you of a tech company. you can say perhaps it wasn't her fault. switching gears, how is this for the best -- ever you could take a look at these photos. 6000, 4 hundred workers from a chinese company on the trip of a lifetime.
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a ceo pays for 140 hotels in paris, nearly 5000 rooms in cannes in monaco. a trip for his employees. among the highlights, i private viewing of the louvre cm and a private performance of the moulin rouge cabaret show. sounds fantastic. they also set a guinness world record in nice, this twitter due up-- this twitter user sums -- the employee asked her pot, when we doing this weekend could the boss replied, we are all going to france and i am paying. nice work -- if you can get it. yvonne: yeah, that sounds good. withtuned for asia edge, what will be cap the stories of the day. including, china, more signs of stress or some green shoots of toovery? we will talk forecasters who are nowhere near as bearish as some. asia edge is next. you are looking at asia's stocks
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making a comeback year after pretty bad week. stocks gained after the china rate cut. stay with us here. ♪
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yvonne: it is green across asia as japan leads markets higher. double toshiba both have digit declines. a slowing economy, rising debt,
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and a slump in properties. the challenges hyping up in china. and is it time to abandoned athens? the german chancellor's under growing pressure to give up on greece. what slowed out? china's superrich are enjoying the highlights on the high seas. all of that in more, on asia edge. i have been following this across asia today. japan, 1.3% in the morning session. 250 points rallied. if you look at volumes, we are 70% higher. one thirdia, we are of 1%. interesting note from goldman sachs saying oil prices have been on the up for week -- goldman says this presents investors a window.

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