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tv   First Up With Angie Lau  Bloomberg  August 30, 2015 7:00pm-9:01pm EDT

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♪ >> a question of confidence. banks beginning to lose faith. the view from here. course.will stay the malaysian protesters defy the government. ."lcome to "first up i am angie lau, coming to live
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from hong kong. breaking news out of south korea. industrial production in july % from the previous month. economists were expecting a gain of 0.1%. datapointing industrial coming out of korea. we will get more reaction when they open in an hour. let's check in on markets for asia this monday morning. in new zealand, fractionally higher. dollar the new zealand fluctuating all last week. on friday,ronger that this morning, it is down. we are counting down to the old been australia, japan, and korea. japan last closed with optimism. more than 3% higher above the
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19,000 mark. but check out nikkei futures. on wallmixed closed street, it will open lower according to futures in chicago. at 121.25.stronger no trading in malaysia or the philippine. banks are the latest to show a lack of confidence in economic recovery. fresh off rate cuts from the central bank, many lenders offering less for deposit. we have stephen engle taking a closer look. stephen: what we are seeing is lending rate cuts, deposit rate cut. the bank will offer a higher rate for deposit than the benchmark rate. what you are seeing is banks offering less of a premium. the reasoning is why would they
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pay more for deposits if they are not lending? that is an indication of the economy is slowing. let's bring up a couple of examples. 2.85% a year on to your deposit. 2.35.ark is before last week, they were offering a 65-point premium. cutting premium on three-year deposit to five basis points above the benchmark rate. if you cannot lend the money, why would you bother to gather deposits, let alone pay a lot for it? that is kind of the pressure you are seeing at banks. the interest rate cuts, a mixed blessing. it gives the banks more leeway to offer different rates around the benchmark. at the same time, margins have been really hurt because of the
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lower rates. angie: how is this being reflected in results from china? ccb was the last to report. icbc out late last week. zero profit growth. ccb, same situation. yuan,come, 64.9 billion unchanged from a euro. nonperforming loans jumping 28% since the first half. ratio is still quite low at 1.42% outstanding credit. ed, butumbers may be fudg that is a significant rise. angie: thank you so much for that, stephen engle. china's market open today.
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tos follows the decision prop up interest rates ahead of a showpiece military parade on thursday. the rally may be short-lived. theeckert explains why options market is not convinced. zeb: not convinced at all. last week, we had a 10% rally on thursday and friday. thursday, up 4.82%. , governmenttime buying up stocks at interest-rate cuts. you have options traders adding ts on thebearish be market saying, wait a minute. we do not think this will happen. the focus is that they are surging to record levels in shanghai and new york. major ones. what we see is the so-called "spread," volatility, showing a
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big uptick in bearish bets. not convinced by efforts of the pboc. angie: this is the most leveraged market in the world. one of the most, if not the most. there is a lot of concern here about what that means. zeb: huge concern. -- $783er is starting billion. , whond pop investors bought stuff on margin financing. you have a larger concern that the leverage could online -- unwind. that is really a key concern. unstable,arket is those are the words of merrill lynch. the shanghai markets could fall another 35% to be attractive to investors. you have a double whammy of investors not finding values and
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valuations too high. angie: and those leveraged forced to sell. zeb: it is a big number. much. thank you so headlines, on other china's as there is no basis for further depreciation of the yuan. they say the currency can remain stable on an equally -- equilibrium level. there have been five rate cuts since november, and a lowering of the reserve requirement ratio to stem the stock market rout. hong kong is expected to slow down. the finance minister says the market volatility and decline in foreign trade may have an he boostedect saying his growth forecast this month.
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that means a tumble amid concerns about china. hong kong has become more expensive as the currency strengthened amongst other asian currencies we can. nergy has posted a first-half loss of almost $8 million. anergy was the most valuable solar company in the world, and the chairman was one of china's richest people, but shares have been suspended since may, when they lost half their value. even before the collapse, some questioned relationships with the parent company, which provided 61% of revenue. malaysia's prime minister is facing increasing pressure to step down after two days of protests.
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the former premier has renewed into investigation of calls of mismanagement and corruption. shery ahn joins us now. what is the mood today? shery: good morning. as you can see, it is still dark umpur, reflecting the mood among protesters calling for the prime minister's resignation. things have settled a bit. protestsnificant the did not spill over today, and important day for malaysians, but there have been chance, protests of 30,000. now, a key shopping district
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yesterday, one protester said he was out there to make things right. he wanted malaysia to be strong again and send a signal to the government. withwere dressed in yellow sih t-shirts,beer malaysia.s "clean" in a key development in the protest was the appearance of the former ohamed, telling m protesters to carry on. did not show a large core of nagiy's support base.
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many are saying corruption is a way of life in malaysia. angie: how has the government responded to the rallies? the government has been quick to condemn the rallies and call them in legal. a dozen people were arrested in the rallies over the weekend. last night, the prime minister gave a televised address saying the government had to object to the demonstration and would not let instigators destroy malaysia. he talked about the economy top --, saying weaker currency was beyond the government's concern. the ringgit is at a 17 year low. malaysians are discovering their money did not go as far as it used to. many have to withdraw money more often.
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still, the prime minister says the economy is growing and expects it to be more resilient than during the 1998 crisis. inie: shery ahn live for us malaysia. bond funds are betting that slower inflation will allow for a cut of interest rates. the benchmark has been lowered by 75 basis points, boosting sentiment in bonds. hole, they tell us what is next for the bond market. get it, we can start issuing long-term bonds. to finance all the things that the government plans. angie: we will have more from the rbi governor to hear more from his state on the world
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economy in about 20 minutes. up, from the race decision to china's pmi, we look ahead to some of the big market moving even. you are watching angie: police in thailand have
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arrested a man in connection with the bangkok blasts. makingscovered bomb materials in his home. if he was one of the men caught on camera on july 17. police say there is no evidence of terrorism, but sources in bangkok said he has links outside of china. north korea and south korea are back from the brink of war and on track for re-conciliation as
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senior party members address the standoff. more than 1000 homes were near the railoyed links. japan has been asked to confirm commitment to the rugby world cup after cutting the budget for the shook the stadium. $1.3 billion is less than half the original plan. it has not hosted matches in four years time, anthey are under pressure to complete it in time. week for global markets, u.s. investors paying close attention to econoc data for signs of which way the fed is leaning on interest rate. for more on what may be driving , joiningts this week
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us is the head of global markets research at asn. you heard from stanley fischer indicating the jury is out on a september rate hike. we could seeems something coming out of the fat in september. in september. what are your thoughts? >> i do not think they know. domestic case for tightening which seems strong. inflation has not picked up. but they had a messy global backdrop. that has been there since 2013. new, but it means september or october, it is coming to the frame. global conditions are too uncertain for september.
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do, what does this mean for currencies globally? especially those in asia? the u.s. economy is and themixed signals only debate is time, it is likely to remain much of the same that we are seeing. likely to remain relatively strong. months, it has been an emerging market story. global markets will stay volatile. we have seen that more recently with equities particularly. again, the epicenter is in the of the world,rts emerging markets at the moment. angie: that is something we are watching closely with china devaluing the yuan, which some
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suspected was ahead of the rate hike. that china wanted to take some independence back and of the move. the currency alignment causes ripple effects. what do you think the move will be from china? >> it is a 3% currency move, not a realignment. to help exports, you are talking about currency moves of 15% or 20%. all the currency move has done is worse in the imbalance in the market. you have revealed the currency can go down, there is a case for it to depreciate. people thought it would stay stable or appreciate. that is what they need to manage.
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it has made things more volatile rather than settle down. angie: what kind of strategy do we need to employ here? i think the assumption is that it will continue to depreciate over an extended --iod of time because time china wanted to move slowly. but the pressure in the market is towards appreciation. while the dollar remains strong with china rebalancing, asian currencies will stay weak and under a bit of pressure. angie: we have some critical data coming out of asia, crc gdp, china pmi, india gdp. what do you think will drive the most in terms of impact? 9:15 shanghai time, with the
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announcement at 9:30 when the , i think it opens will remain this way for the next couple of weeks. angie: that is the truth, isn't it? for investors this week, what will it look like? more volatility? >> again, it depends on china. my expectations after the renminbi appreciation in the last couple of sessions is that we need to expect a move the other way. fix has become an enormous deal with other times, not much going on. but if payrolls is a good number on friday, the market will feel
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the effect going into september. angie: a big jobs report coming out as to whether we will see a rate hike. richard, we will leave it there. thank you for joining us, anz, head of market research. coming up, volkswagen and being a better relationship. we halve the hole story. ♪
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♪ angie: welcome back. i am angie lau. troubled relationship with volkswagen is coming to an end. volkswagen will sell its stake, wrapping up a four-year dispute over there failed partnership. juliette saly has been taking a look. juliette: this was a six-year relationship. from 2009 until now, not one project netted between them. years agosoured four when suzuki decided to buy engines from fiat. suzuki was going to use vw technology, vw was going to use suzuki's presence in the asian market, but suzuki has been
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strong -- stung. let's take a listen. i am satisfied with the outcome of the arbitration process. it is like removing a small bone stuck in my throat. you would not remarry someone you divorce. tte: even in winding down the relationship, there is still tension. suzuki wants to buy back a 9% stake. w announcing a buyer has not been announced. angie: the chairman describing it like a divorce. if there is a future joint venture partner, does that mean we will see a stronger marriage? iette: experts say the
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environment is not conducive to a joint venture, but you do not need to be married to your partner in terms of happiness in a joint venture. they will be focused on targeted to keep at projects presence in india but will not be working with vw. angie: thanks so much for that juliette saly. decision, the rba being watched more closely than usual. withll be live in sydney details. ♪
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angie: it is a brand-new week. minutes away from the open of trading in japan, australia, and south korea. it is a cloudy day in hong kong. let's see if we can find some clarity today. you are watching "first up." angie: top stories this hour, in a sign that china's banks lack confidence, a cut to deposit
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rates. offering 50%ingo -- 50 basis points more than the benchmark. china's slowdown reflected in big earnings reports over the weekend. iny are joining big lenders reporting zero profit growth. income, $10er net billion, not much change from a year earlier. two days of antigovernment protests in malaysia's capital. asanizers say as many 250,000 people joined rallies, but the government says the crowds peaked at 50,000. the crowds want the prime minister to resign under
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allegations he misappropriated $700 million from state funds. let's check in on markets in asia. in new zealand, fractionally higher and remains that way. .1% higher. weakening this morning with commodities see -- commodity currencies fluctuating. uighur on the perception of a chinese economic slowdown. down to theing opens in australia, japan, and korea. nikkei closed above the 19,000 mark, 3% higher on friday. but check out futures in chicago pointing to a lower open. economic slowdown in china really driving safety plays in strengthening
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121.32. the fed, ecb officials have expressed optimism at the retreat in jackson hole. stanley fischer set the option of a september rate hike was and fund investors are raising the back to 38%. the land down under, the reserve bank of australia meets tomorrow to set policy statements. it will be watched closely for any shift in tone based on recent turmoil in china. paul allen, what are we expecting? paul: steady as she goes, really. 100% of economists surveyed expect no change.
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but the language of the statement will be closely watched for any reference of what is going on in china. the australian economy is the most exposed to china in the world, about one third of exports go there. so that could create problems that here. for that reason, traders are getting tighter on rate cuts. on august 11, before the yuan devaluation, there was a 35% chance. that is now up to 60%. while 100% of economists expect nothing to change tomorrow, the odds have diverged towards the end of the year. some believe we are going lower, including one pessimistic soul who thinks it will be at one and
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a half percent by the year's end. angie: thank you, paul allen, out of sydney. over in india, speculation we could see another rate rise as early as next month with bond funds betting that slowing inflation could push the rei into action. the governor has lowered the benchmark by 75 basis points. in jackson hole, he told bloomberg there is a limit to what central banks can achieve. of growth,n a period but it would be better if we grew faster. central banks have done what they could do, pretty much. held, butuniversally i think in general, central banks have done pretty much what they are capable of. others have to step up.
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whether it is through structural reforms -- in some cases, fiscal policy. those might be the sources of fragility. as a result, in certain asset markets, prices are not correct. they needed to be correct. whether that happens smoothly or in a more volatile fashion is anybody's guess. >> do you believe the secular stagnation argument? >> there is some validity to the fact that we are growing are more slowly than previous recoveries because of debt overhang. but there is something else that is going on. is a moreure if this , but you wouldr
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some way ofd find monetizing all the good stuff that is happening and let it add to gdp. >> one of the consequences of innovation is that, if you have a surplus of labor, you cannot use it to grow in the way china has in the past. of automation, has india missed a chance to develop? >> i do not think so. sure, we have to do a lot more work now than we would have had to. we certainly need to scale the workforce more. benefitsnk the real going forward will be the advantage of technology and human being, bringing them together, rather than technology replacing the human being. be scope fore will
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value-added people. my hope is that we figure out how to do those things. i will give you an example. internetlasses of the -- if we just transferred over the internet, if you have a tutor figuring out and helping you along the way, the classes can become really effective. a teacher giving you the lecture, and a good assistant helping you understand. my sense of the marriage of technology and human beings would be the most successful way of delivering the course is. >> can in ds get step work becomes a manufacturing exporter? >> my sense is we should allow for all possibilities. i do not want to prejudge which way is right.
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if we can become a manufacturing giant or emphasize services as we go along, i think we would up our level in manufacturing. we are exporting more manufacturing now. but services and education could pick up strongly. time for a look at some of the top corporate stories on the bloomberg terminal. we have zeb eckert with that. zeb: nissan has halted plans to invest $750 million in india because of money they claim they are owed by the state government. the automaker has asked for the central government to recover millions of dollars in subsidies and refunds. plant ins a production the capital. two engineers who
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had a jeep to expose security flaws. it prompted fiat chrysler to recall 1.5 million vehicles. tor says it is trying improve security at the company. high profileing movies, including "hunger games" and "transformers." netflix will be ending his contract with epix to focus on original content. those are the corporate headlines this hour. i am zeb eckert. angie: time for a look at what we are going to be watching in asia this week. tomorrow, we could see the manufacturing pmi for china at its lowest in three years. economists expect a figure of 49.7 compared to 50 in july.
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a number of this loan would put pressure on beijing. blackoverseas be the new for netflix? offering original local content at its launch in japan. netflix is hoping to expand into another 150 countries by next year. time for the battle between samsung and apple taking up again on thursday. samsung will release an update to galaxy gear at a trade show in berlin. a photo has been published of the new device, which has a round face and is rumored to feature gps. on thursday, we saw xi jinping welcoming world leaders to celebrate 70 years since the end of world war ii. ahead of thealmed
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event. south korea's president park wille there, but president obama and shinzo oblique will not be coming. tousands take to the street demand malaysia's prime minister step down over corruption claims. ♪
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angie: checking headlines around the world, as many as 120,000 people gather in tokyo to protest prime minister abe's to expand -- plan to expand the military. critics fear it will lead to japan becoming entangled in foreign wars. soonrters, including the -- u.s., say it is needed to counter the rising power of
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china. ignorebeing told to protests ahead of a november election in myanmar. national league for democracy is expected to make gains, but a quarter of scenes are dedicated to the military. protests have wrapped up in malaysia. many as 200ay as 50,000 people joined at rallies, but the government says the crowd peaked at 50,000. protesters want the prime minister to resign over allegations he misappropriated state investment funds. let's get a feeling of the umpur,here in kuala l where shery ahn is standing by.
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i am joined by bridget welsh, senior research association at the national taiwan university. thank you for joining us so early in the morning. , how significant were the rallies for malaysia? major issues.two you saw a large numbers of people from all walks of life in the streets, making a statement there are real concerns about government. the second thing is that you are seeing a more mobilized civil society that represents a moral compass of the country. the fact that they are out indicates increasing political polarization. shery: you are talking about polarization. what does it tell us about racial differences in the auntry and the appearance of
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former prime minister? what does it tell us about the political situation? >> it is a politically complex society. but you traditionally see an alignment between the malaysians and chinese. but there was a lot of cross national representation. there is a tendency to have identity move away from racial politics to national politics. this is tension. the prime minister's presence indicates there is a problem and that they are concerned by najib's leadership. rallyironic he was at a for supporters who were traditionally critical of him. angie: organizers for that number at 300,000 over the weekend. what do you think of the government response and what is next for mr. najib?
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>> we have to take it individually. we saw a disconnect between the administration and that of many people in society. the response has been to reject does notst, which create a sense of confidence in a dialogue to move forward. positions can become intractable. this is a serious issue. is there, najib hebrew song revised -- he personifies corruption, increasing polarity in malaysia in the short-term. long-term, they have to deal with the issue of najib's future, which will be determined by the party until an election happens. that will be a couple years down the road. we may be seeing a persistence as hiscrisis as long
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position holds on. shery: which is not great. all the political scandals are undermining the economy further. we are seeing a special task force formed by the prime minister meeting tomorrow. what do we expect out of that? >> it is necessary. the sense is the economy is slowing down. that is why the scandal is so challenging. undermining is traditional base of legitimacy. so how do you engender reform? we are seeing a lot of pressure. forces may be a positive step, but implementation will be the judge. shery: one protester told me that the goods and services tax
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that was implemented was the source of woes for all the government. what is your position on the? a lot of their fundamentals are not bad, but the problem has been political management. we have questions raised about , reforms inbank terms of moving the economy forward, and those are the essential questions. right now, they raise very serious warning flags. we have seen a lack of public confidence in the economy. many businesses feel it is slowing down. a lot of ordinary malaysians are hurting. shery: thank you for joining us again this early on a national holiday, bridget welsh joining us on independence day, and here he -- a very proud day for malaysians. angie: thank you, shery ahn.
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breaking news out of japan. preliminary industrial production figures have just been released, and it fell 3.6% on the month. increases expected an of 1.1%. on the year, growth, 0.2%. some disappointing economic data out of japan. china's economic slowdown and of ripple effect it is having across the region. coming up, a japanese beverage maker seeing profit fall by a third. will that make it a market mover? picknalysts make their when we return. . ♪
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angie: 3-d printing is changing the world and the way we make things.
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it has been used to build homes, car parts, and musical instruments. as tom gibson reports, it is being embraced by the fashion world. reporter: it is home to creation and concept, but the catwalk has taken designed to a new level. the red dress modeled here was not stitched or so, but printed. danny designed it digitally on read into a th printer. the technology has allowed all of us to be able to wear this stuff. it is not only for celebrities anymore. it is not made out of plastic. it is very flexible. you can wash it in the dishwasher. reporter: beat them high-end fashion, the process is expensive. $2500.cket cost
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elig is confident the technology will become more six -- accessible. >> it is like a paper printer. in a few years, it will be much more reasonable. lig can send designs directly to customers, which means anyone can print exclusive fashion at home. with the cost of printers this may be the latest home of fashion. ♪ angie: welcome to the stock exchange. oldre looking ahead to the bins in australia, japan, and south korea. >> you are both fashionable. >> what do you call that? >> a pocket square.
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zeb: we are going to south korea. ,ou may be familiar with lotte part of the korean conglomerate. they actually have a candy confectionery, owned in part bylotte construction. it has apparently been in a family feud, and they are moving shares around with the chairman 1% to up his state. juliette: this is dyno drink co, out of japan, a 31% fall in operating profit, but they are acquiring a milk business.
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angie: we will be watching when markets open. these are the stocks that our reporters picked based on news events. much more coming up. ♪
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angie: a question of confidence. banks are beginning to lose fai th. there's only so much central banks can do. welcome to "first up." i am angie lau.
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let's get straight to the marketeer in the asia-pacific. this is how we are starting the week. the nikkei 225 down below the 1000 mark. it is the safety haven play. to australia, where we are going to check out the asx 200 for you. china weighing on investors no doubt. australian dollar spot, that aussie dollar is also weakening of. be -- the k cost ospi is just starting. fresh off the latest rate cuts from the central bank among many chinese lenders are offering favors much less for their
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deposit. what are we see? banksn: you're seeing following the rate cut, offering less for savers deposit than they have in the past. what you can extrapolate from that is that, if tanks are not lending as much as, which is a slowing economy, they are not going to pay more for your deposit. that is what we are seeing across a number of banks. one offering 2.85 percent a year on two-your deposits. the deposit rate has been cut down to 2.35%. that is the benchmark rate. and the banks offer certain premiums above that to get deposits into their banks so that they can lend them out. but that is a 50-basis point premium. cutse they deposit rate last week, they were offering 65 basis points premium.
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richard tsao says there are no signs of stabilization in the economy. if you don't lend out the money, why would you bother to gather deposits, let alone pay for it, pay extra for it? that sums it up. five rate cuts. it has been a mixed blessing for banks. and a flexibility they have gone to offer rebates -- offer the best rates. angie: how is this being reflected in earnings? we heard from china construction bank, other lenders as well. here.n: a twofold story you have zero profit growth for all of the big banks and a
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significant rise in on for loans. loans.nonperforming , 64.9 billion ccb yuan. basically unchanged from the same quarter last year. below estimates as well. combined earnings for the big five banks is expected to have very lowest profit growth since 2004. icbc up 31% in the first half as profit growth was basically 0% in the second half. stop prices ever reflected this kind of poor performance. their net interest margins have been shaved. nonperforming loans have been increasing extensively. we can see their outstanding
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percentage of loans that are souring renowned. and the -- right now. and the increase. outstanding lending, still above 4%. which has a lot of these rural customers, 1.8 per three -- 1.83%. angie: souring loans souring even more. china's markets will open today with a tailwind from last week's interest rate cut in beijing's decision to prop up stocks. it comes after a military showcase parade on thursday. but the rally may be short-lived. zeb: you have these options
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traders increasing their bears contract, bearish bets, basically saying this effort to prop up share prices is doomed to fail. we know because the cost of these bearish contracts are at record, in shanghai and in new york. it shows globally the options market does not have the same confidence, for example, as economic policy masters do in beijing. very interesting to see how this plays out in the market and these pessimistic that's -- these optimistic btes. optimistic angie: just how unstable is the situation? zeb: it is untenable. it is unstable according to bank
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of america and merrill lynch. we saw the spectacular decline in the market. b of ahus be of a -- says that it will likely go dumb or before it is attractive to investors. they can't find anything to buy. that is not supported to the market. if the market has to pull back another 35%, that is a tough haircut on any day. angie: that's a buzz cut. [laughter] zeb: worse than that. so more pain to come. the government in beijing, very stooge, we don't know what they have up their sleeve -- very astute, we don't know what they have at their sleeve.
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says: the chinese premier there is no basis for the depreciation of the yuan. he said the currency can remain "equalin "evil and -- and equilibrium levels." leveragingof the requirement ratio could help. the finance secretary said growth may weaken in the second half and that market volatility and the decline in foreign trade indoors a may have an adverse effect. equities tumbled amid concerns about china. hong kong is a come relatively more expensive as the currency strengthened.-
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for a short time, stocks were the most valuable solar company. energy -- hanergy shares have lost its value. just ahead, making an exact. foreign investors have dumped equity. will kuala lumpur be able to stem the outflow? the agencyk to responsible.
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angie: checking stories making headlines around the world -- as
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many as 120,000 people gathered in tokyo to protest against prime minister shinzo abe plans to expand the military. critics fear they will lead to japan becoming entangled in foreign wars. supporters coming clean in the u.s., say they are new to counterbalance the rising power of china. leader saysposition -- she spoken in what she called a voter education exercise. myanmar's parliament has roundup -- has wound up its final session ahead of the polls. parliamentary seats are still allocated to the military. two days of anticorruption -- antigovernment protests have wrapped up in malaysia's kuala
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lumpur. organizers say as many as a quarter of a million people joined the rallies, but the government says crowds peaked at about 50,000. protesters want the prime minister to resign over allegations he misappropriated $700 million in state investment funds. xi says the money came from a political donor in the middle east. let's get the latest on the malaysia protest. what is the mood there today? good morning. despite the peaceful skyline of kuala lumpur, it was everything but what the tens of dozens of people who marched to the streets of kuala lumpur over the weekend. today is a national holiday here. malaysians celebrating independence a. so things have settled a bit. it is significant that the protests did not spell over
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today, a key day and also a very proud day for malaysians here. but the discontent is thoroughly felt throughout the country. a shopping district in kuala lumpur. one protester told me he was out their shopping because he wanted to make things right for malaysia. another person is telling me that they were there all weekend to send a signal to the government. protesters were dressed in yellow, somewhat the official bershihmercy -- official sign on their t-shirts. have all a lot of ethnic malays. angie: how has the government responded to these rallies? the government has been
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quick to condemn the rallies and called them illegal. we heard reports yesterday that a dozen people were arrested for wearing those yellow t-shirts. last, the prime minister said the government has to oppose these street demonstrations, saying he will not let industry gators destroy malaysia -- lot ors -- will not let instigat to destroy malaysia. he said oil prices were beyond the government control. he says the gut -- the economy is still growing and expects the malaysian economy to grow 5% this year. touchingthe ringgit 17-year lows, people say their money isn't going as far as it used to. one malaysian person telling me that he has to withdraw more money more often. he is especially upset about the goods and service tax imposed in
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april to reduce the budget deficit. and of course, we had the former prime minister mohammed also joining the protests yesterday and over the weekend. are seeing this division, not just among racial lines, but also within the ruling political party here. guest runs axt state agency that aims to attract foreign investment to malaysia. shaw -- venalin amenshaw joins us via webcam this morning. how tough has your job become these past couple of months? zenal: there have been some challenges, more from the global economic move we have seen.
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the first half of this year, we announce our foreign direct investment. it has been tough. it has been challenging. we do expect a good second half of the year. we have a strong funnel. there is a very strong interest to invest in kuala lumpur and asia. drawinge things infrastructure wise, opportunities and so on. we feel that the business side remains very resilient. angie: that may be true from your perspective, but globally, you've got a falling oil price that is hurting exports in malaysia. your ringgit is taking a purge -- a punch. -- a plunge. how do you lower foreign investors and appease these
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concerns? what are you telling people? marketsthe financial have been affected. the currency market, the equities market have been affected. but i go back to the business front where companies want to bring in the real money as opposed to the hot money associated with the financial markets. on the business side, it is resilient. you look at where it is they can continue to make money. they look at a stable location. these are what we still have, despite the political challenges going on right now. they see that the cost factor here, we are very cost competitive in this kind of market. that becomes very important. i want to quickly throw in a mame -- a name to prove my point.
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this year, we have companies like shrum burger -- like shrum burger setting up offices here. , we will see -- next month, we will see multinationals setting up their regional centers here. the business side is still very strong. angie: but the one thing that everyone, of course, from a global front and a global stage is allegations of corruption. and those allegations are thick and heavy right now, that is driving political instability replacementfor the of the prime minister. zainal: you mentioned allegations. the investigations are still going on. i cannot comment more than that. let's look at what the companies
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look at, which is on the ground today. they look at the track record we have had over the past 20-30 years. this is our 15th year of independence. we value all of that. they look at the strong track record. they talk to other companies. they look at case studies, real life examples. economy isly, our still very strong. if you look at the numbers of -- these aren solid numbers by which they make that decision. you have to knowledge at least that, when you have political instability, we have seen another, it has affected gdp growth. it has affected supply chains for companies and corporate's. and it has affected foreign
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investors in that country. how can foreign investors be this protest movement isn't going to grow larger? we even have the former prime minister calling for the resignation as well. the rally has come and gone. it was a very peaceful event. i know some people who were there. it was more like a street party. thing that was missing was probably a live band. it shows the maturity of malaysia as a true democratic country. concerns, of about course there are concerns anywhere when there is a little bit of noise. of course. but if you go back to the fundamentals come as a mentioned, and you look at the companies that i mentioned and we have just completed the asian ministers meeting here. they look at the picture in the
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fundamentals. angie: ok. we're going to leave at there. we thank you so much for joining us. coming up, investors track the rba. ♪
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zeb: these are your fx headlines. china slowdown continues to be a major factor in asia's exchange market. it may show factory output contracted in august for the first time since february. investors seek safe haven alternatives. in australia, investors are surely watching the manufacturing numbers from china. and they will be looking at the rba meeting. they may give us the clearest picture yet of the true status of china's economic slowdown and the impact on australia. the aussie is falling in advance of the decision. now on the singapore dollar, it is on course for a 2.7% monthly loss.
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this is the biggest is the middle of 2012. in early monday trade, the currency weekend 1/10 of 1%. investors will be watching the central banks today. dollars singapore funding rates continue to weigh on government bonds. let's take a closer look at how these markets are faring. currencies in the asia-pacific today, certainly a lot of focus on central banks and the data from china. let's check in on those three currencies. we will check on japan. you see the safe haven interest, the flight to save the lifting the nfl .4%. the aussie dollar continuing to be under pressure. we closely watch what glenn stevens has today and fisher's comments in the u.s. on friday,
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highly anticipated clues to monetary policy. finally on singapore, a modest upside for the currency. it has been been around by the chinese evaluation. that is the currency we will watch today is the central tank comes out with its latest it on money's of i and bank loans. coming up, a breakdown in relations after the painful act of suzuki with bmw.
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angie: it is 8:30 here in hong kong. there is a great vantage point of a beautiful skyline. one hour from opening trading. things are looking grim. ♪ 'span industrial production fell.
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the third biggest economy is improve and slow growth ways on the exports. weighs on the exports. lenders pass on cuts and e xceedecd them. they are 50 basis points more than the benchmark. it is five aces points. the china slowdown has an reflected in earnings reports. is rising bad loans and we have second-quarter income coming in. the government struggles to
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reinvigorate economy. we have breaking news out of australia right now. .1%, compared to 0.2%. kit is below the goals set by the policymakers in australia ahead of the reserve bank in on strike in meeting to set a cash rate. they will be watching closely one.a shift in t what are we expecting from the rba? movement, none at all. figuresy, the inflation support that.
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36% of exports going to china. we look atthere and the data from the swaps traders with a cut in australia by the end of the year. economists and it will be at 1.5%. move andause them to
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they are looking at it in china. >> a lot of countries could make the case for that watching china. there is growing speculation that we could see another rate cut in india. pushng inflation could inflation. currency andd the they told bloomberg that a slowdown in china has less effect. >> nobody is immune. we exported a small amount to china with commodities on niche products and the growth is slower than anticipated. there is lots of it for us.
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so, relatively, there are less countries. over the last months and years, currencies in the emerging markets. of --the interest is that a feature now and not a bug? >> it integrates well with the economy. gdp is exports and imports, a large number. demand withtantial 60%. that is pretty good. angie: we are 30 minutes into
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the trading day and we have zeb. zeb: the market sessions are getting underway and we are seeing a flight to the -- to safety. ahead oflia, a focus decision. we watched chinese manufacturing numbers come out and they will have an impact. we see modest pressure on the cospi. .1%. up by i put the chinese market. on on here. we will be watching it closely continuesthe strength in the markets.
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there is some concern that it will not. let's take a look at australia and talk china, taking a look at mining. 3%,ution mining is up despite the dismal outlook in china. take a look at a 5% drop. us is what you have in the nikkei. up 3%-4%.imco, down.ishi chemica,l, in the broader region, it training gets underway and this is what we have. it looks like a little positivity with the financials firmly lower today. it is an important data point to
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onto.nto -- latch look atime for a corporate stories. movinge is high profile with the hunger games and the age of extinction. use on says they want to developing original content, instead of sharing films with other providers. hacked high-tech cars. it caused the recall of 1.5 million vehicles. improve campaigning to safety and security at the company. will hold off investing
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in india because of the money they claim they are owed by the state government. the automaker asked the central for tax refunds. declined tohas comment on the issues. now, a look at the top stories on the bloomberg terminal. the relationship with books like and is coming to an end. wagen is coming to an end. 2011relations soured in when suzuki shopped forward diesel engines from fiat.
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>> i am satisfied with the outcome of the arbitration process. stuckmoving a small bone in my throat. i do not think you marry someone who you divorced. >> harsh words. you take a look at all of this. heard that there is no and lost between the two a tenseany has relationship with volkswagen and has done their part,
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describing suzuki as a company control.d in that rubbed suzuki the wrong way. yesterday, it was said that a precondition for any cooperation that suzukie is maintains independence. that was problematic, in suzuki's eyes. it contributed to the messy breakup that lasted nearly 4 years. it is the end of the saga. angie: there was young love. what did they see that led to the alliance?
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>> that is exactly right. this made a lot of sense on paper. you have a company that is the best in the world at making small cars, including volkswagen. drive to catch up and pass toyota to become the world's biggest automaker. they have done so at the expense of profitability, to an extent. you have seen the company put in place cost-cutting. volkswagen has real trouble doing that. they are learning from suzuki. suzuki is dominant in india. any other foreign automaker has had trouble. they are so dominant there. interested in
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scale, which is something suzuki is lacking. japan is a market that looks to be in perpetual decline and it is problematic. angie: ok. thank you so much. we are tracking the marriage and demise of a partnership. just ahead, too little, too late. acback in two.
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stories around the nation. 28-year-old is said to be
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areign and is charged with session of explosives. there is no evidence of international terrorism. kim jong-un brought countries back from the brink of war. had reconciliation and trust. roads and railings were badly damaged. japan confirmed their participation in the olympics. it has been capped at half of the original plan.
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it is down. the olympic venue will change intolan and put organizers complete on time. and itseeing a recovery australian equities are 1% down. isning us from melbourne angus nicholson. what are you thinking this week and how do you think investors are going to take the weeks and the traits? >> obviously, it was a dramatic
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ast week and it was tricky to that was gain. they were relatively up feet on the economy and they are thating that a calculus most in the market are looking towards. we had a major development in the chinese stock market and it no longer is going to rail out. we have moves from the they think they want to see the market as a non-issue during the commemoration this week. the issues will play out this week.
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>> how critically you be watching them coming out? >> it is important and you are seeing a dichotomy with the services sector on an 11 month high. ande is a related sector services continuing with strong growth pointing towards elements of the chinese economy that are versus the oldl school economy of north and northeast china. ok.e: the japan industrial figures came out today. they have done a number for the
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japanese economy and we are seeing figures disappointing. how is all of this going to play out for japan? up feet figures last upbeat of heat -- figures last week. there have not been any moves on ljm -- bojf the members. if they want to hit the target, you think they are stepping out stimulus -- stepping up stimulus measures. lack, they asked act further stimulus.
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>> also tipping it is the decision tomorrow. there is a slowdown that everybody has been warning about. it is based on the knowledge that china is going to slow down. >> that is right. hold are rates that will until 2017. the china devaluation and the stock markets will be important to see with the area around china. rates andchanging they are perhaps lowering rates until 2016.
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it will be interesting to think about. we will leave it there. up, we will take a look at a south korean confectioner and the re-of a leading retailer for top -- three organization of the re-organization of a leading retailer.
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angie: welcome to the stock exchange. let's take a look at the root borders full top >> -- the reporters. that.k at that is nice for the stock. it has been very graceful so far this morning. let's take a look at the confectionery news. feud, at theily
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moment. they apologized to shareholders and the chairman of the group just raised his holdings of the confectionery, lying an additional percent in the last few days. confidence in the business. >> ok. >> drink up. >> operating profits are down 51% in diversifying i am nots drink and sure if you would want to take milk out of a vending machine. probably.te,
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>> that is just me. i do not know. >> sugar and drank. the stock from exchange. training business is coming up next. what are you looking at? >> there are all sorts of difficulties. there are fundamentals that will be around that we are discussing and the passing of the recent rate cuts and exceeding with a confidence in the economy. there is a lack of earnings and growth here.
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there is concern with what is and it is something that many have been looking at, particularly in mail-dominated societies. >> ok. thank you for watching.
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rishaad: it's monday the 31st of august. i am rishaad salamat and this is "trending business." ♪ we are going to be live and -- in sydney and kuala lumpur this hour. the is holding a four-day slide on upcoming reports that will china'she evidence of banks losing faith.


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