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tv   Trending Business  Bloomberg  September 23, 2015 10:00pm-11:01pm EDT

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fallout from the volkswagen issue. quit afterwinterkorn the cheating revelation, and they say they need a fresh start. will it be enough to turn around a global public relations disaster? and billions in orders from china as president xi jinping drops in on a main factory in washington state. boeing revealed plans for its first plant inside china. let us know what you think of today's top stories by following us on twitter. @yvonnemantv. #n't forget the trendingbusiness. reporter: you get in, and everyone is happy. asia-pacific, and
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getting a heavier rating. the japan effects. and that index is on the way up. flat, and ag is decision coming on later on. as with taiwan. australia is on the way up. this morning from oil. not everything, but most of them are higher, the dollar stronger. shanghai is up 1%. this story, you can check it out on our website. economists surveyed basically see china that china may have to scale down its growth forecast for next year to as low as 6.5%, still not bad, but if you are 10.5%, of course you're going to get a scaling down.
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around theese prices world. ok. new zealand, the story there, the trade deficit was out. into august, 3.3 billion kiwi dollars, north of a billion kiwi dollars there. the movers, and then we will get to the supply chain. the stories making headlines. this is the first time that japanese stocks are getting to react. to that story. we go.come closer, there have a look. these are the intraday moves. exposure.hem, .8%look at the range, about to a high of about 10% or 15%. a lot of these suppliers in japan. at this point, very sentiment
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driven. 6%, 7%, 8%, 9%, 10%, 11% even. have a good day. not only waves across the auto industry, but it could effects with the commodities market. let's bring in shery ahn. shery: october being investigated, we are hearing regulators and other countries are owing to scrutinize their vehicles, as well. japan says they have no plans to investigate vw. the cars were imported into japan, and they are considering , and the emission scandal affect platinum, now trading at a six-year low. curbmes from devices that
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harmful gases from cars, particularly diesel types, so they say there will be a substantial drop in platinum usage if consumers by fewer diesel cars, and martin winterkorn now has taken responsibly for the scandal, after 22 billion dollars of the vw market value was wiped off in the past week. now, the board will have to find a fresh leader to repair vw's reputation. asource tells us that possible replacement could be the head of the porsche branch, with a family that controls a majority stake of volkswagen. we are also told that the head of the passenger brand who recently joined from rival bmw could be in the running. they will consider successors at their meeting on friday. back to you, yvonne.
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yvonne: thank you. we will take a more detailed look on that later on in the show, and we want your opinion, and make sure you include the #trendingbusiness. and a major deal with boeing. we have a report from the facility. reporter: hyundai two of chinese president xi jinping across to get visit to the united states, -- on day two of chinese president xi jinping's visit to the united states, about aame out to talk new finishing center in china, the first of its ever for boeing. also today, president xi attended a major is this roundtable hosted by the paulson institute, and it was a veritable who's who of officers
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from both the u.s. and china, including the likes of apple up a stiff tim cook to disney's bob iger. from the chinese side, it ma andd alibaba's jack others, and president xi addressed the crowd, saying there are still many for countries in china. it has moved from trade driven to being both trade driven an investment. given our differences in the development stages, i would have issues, and for business cooperation, it is even broader. there are more opportunities in this respect. reporter: looking ahead, president xi jinping goes from washington state to washington, d.c., where, of course, he meets u.s. president barack obama, and
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they will have substantive conversations from bilateral climate change and human rights, and then they will have a state that are with pomp and circumstance, and a lot of people will be watching. bloomberg news. take a look at some of the other stories we are watching today. kong fashionong retailer again finds itself in the crosshairs of an activist investor. he says he hopes for an investigation into the report that the company may be the subject of a probe i hong kong reporting council, which is in charge of investigating issues. this is right before full-year results, and shares plunged on the news. kong is a well-known hong says theyand esprit
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have not been contacted. and japanese brokerage nomura has agreed to a settlement with the world's oldest bank, a case centering around a deal named alexandria. they overstated their accounts in 2013 to reflect a loss that had allegedly been masked by the nomura transaction and a similar deal with another lender. nomura says it will in pair results by $287 million. get on zero and get off quick, the advice to the federal reserve from bill gross. he said as these he come the norm, the economy will run on empty. he says it is beginning to happen as detroit, puerto rico, and, he predicts, chicago struggled to meet their liabilities. it is said the fed is unlikely to raise rates from near zero in october. yvonne: another story we are
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following on bloomberg business is how china is sitting on diesel fuel. that is on on this show, xi jinping is not the only leader on tour in the u.s. this week. we will preview the visit of hour, and thethis only thing that could break china out of its economic slump? i doubt what our next guest inks it is when "trending" is back in two. ♪
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yvonne: economists expecting a further cut in the rate target after the disappointing factory data. let's bring in a chief economist at bnp paribas. richard, really good to see you. pmi figureshese
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about the selloff, continuing what we see globally, much of the same story, but it was a shock though. what theyes, i think market desperately wants is some stabilization, some kind of bottoming out in the mainland, which has been seeing progress for much of the year, and we did not get that yesterday. it continued to drift lower, and i think the more you drill down into the survey, the worse it looks, and what really stood out to me is there was a big spike, and i think this suggests there was an involuntary stock building, continuing to undershoot expectations, and i think that means there will be further downward pressure. yvonne: yes, the second highest level in the survey history. how much longer beyond that, do you think? richard: certainly, when you think of the balance, versus aventories, it does imply
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more downward pressure probably for another month or two. what china desperately needs is some kind of circuit breaking policy announcement, stimulus that will start to act as a floor, at least under expectations for the economy, and i think that is what markets are globally waiting for an looking for from the chinese leadership. yvonne: does this solidify the case about caution when it comes to lifting interest rates? that is what everyone was looking out for. richard: i think that is right, and i think the fed, like a lot of policymakers, is conflicted. we know the domestic economy in the u.s. appears pretty solid if not robust, and they are putting confident that they have met the labor market objective, and we seem pretty close to even in the labor market where there are concerns globally. what stood out to me is that
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janet yellen mentioned china six times, even in her press conference, and there are things on the mind of the fomc, and that is china. that is going to leave uncertainty around what the fed is going to do. yvonne: yes, and we were talking about xi jinping's trip to the u.s., doing some kind of damage control when it comes to the stock market as well as the fallingion, and he said further -- do you see that happening, that they would just loosen their grip question mark richard: i think most important, the market sees further devaluation if you look at it in curve.ward china is experiencing very strong rates of capital flight, and that is the number one problem in the chinese economy this year and now. got 3 trillionve dollars in reserves though. richard: they do, but they seem to be burning through them one hundred last
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month, probably on course for something similar this month, and as you say, china has deep pockets, but even china cannot afford to bleed reserves at the current rate forever, so the key for me though is that while foreign exchange reserves are falling, that is tightening domestic liquidity. it is making it very difficult for chinese authorities to continue to get the message interest rates down, and that is what i think china really needs, so in a way, while the capital flight continues, losing control of the monetary policy, and i think that is why many people, myself included, are looking for fiscal policy to these up that circuit breaker, that shock of the policy announcement that expectations on for the economy. yvonne: some are saying what they did in august is anti-kiwi -- anti-qe.
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with this new record, how bad can it get? richard: it could get worse. being hit by the slowdown and the strong dollar, and it is already in a deep and we believe accelerating recession, and we believe gdp can follow 3% this year, and were it to continue to fall, he would be a rock-bottom consensus of expectations for brazil, but we seem to be moving into a new, very worrisome part of the crisis, where markets are theeasingly concerned about utility of policymakers and the politicians to get a grip on the fiscal situation. and if that does not resolve, the dynamic gets more worrisome. that appears to be what is really pushing the currency ever lower. so rather like china, there needs to be some sort of circuit breaking announcement, but when it comes from, whether the politicians have the ability to achieve that in the near term i think remains highly out full,
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so i think probably the best case is more downside to come for brazil. richard,ll right, joining us there from bnp paribas. now, to the stories making headlines around the world. germany's chancellor says eu leaders have placed an additional one billion euros for international agencies helping syrian war refugees in lebanon, syria, and turkey, and at a summit in brussels, they said they would set up several processing centers in the eu by the end of november to identify genuine refugees. and police scuffled with trade unions during a rally in seoul, korea. unionists want companies to keep when they areven underperforming. currently, workers can only be sacked for wrongdoing such as embezzlement or if the firm is in serious financial difficulties. the president wants to push the labor report through by the end of the year. obama ondent barack
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some of the most critically charged debates in the u.s., and during a meeting, pope francis talked about climate change and praised the restoring of diplomatic ties with cuba. he also made a plea to have more interests. coming up, a new indicator on how the chinese economy is slowing. this time, it is sliding sales in the art word. -- art world. details next on "trending business." ♪
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rugby world cup, going down fighting, other matches on wednesday. australia got their campaign off start against fiji, and france too good for romania. starting the match well, leading at the half, trailing by a few points at halftime, but only three days after their famous upset of south africa, japan tired as a scottish player ran away with the game, winning by 35 points. australia, two trials in five minutes to victory, but refusing to go quietly, and the australian media are describing their team's performance as
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underwhelming. behind england and wales, who each played a bonus point in their first game and go head-to-head in a blockbuster match on saturday. and there is just one more match coming up later on thursday, the new zealand all blacks taking on namibiacan minnows from in london. well, concerns over china's economic slowdown has had her global markets, and those fears do not look like they are going away. china cut the growth target for next year, according to a majority of economists surveyed by bloomberg, and it could be as low as 6.5%, and that is below this year's goal of 7%. excess capacity, sluggish investment, and weaker manufacturing are seen as weighing on the economy, and a corruption crackdown weighing on
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some items. auction sales of chinese art felt. tell us more about this. is it more about the slowdown, or does it go beyond that? reporter: the chinese market is probably one of the most opaque markets. you have artists buying their own works and auction markets buying their own works to push up prices, so the crackdown on corruption has caused people to withdraw from the market. also, there is an element of conspicuous consumption. what people like to do is being conspicuous course consumption is being frowned on, especially by the permit officials, so that is one of the main factors pre-yvonne:
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mainland buyer's account from us half of all sales coming out of here. why is not nonpayment a problem? guest: people will make a public display of their buying power back home, and then they decide to renege. something like 60% of the for,rk does not get paid so whereas in hong kong, they realize you have to play by the rules. the second thing is if you do thepay by the rules, auction house can take you to court, and they have been quite successful in prosecuting a couple of people here and getting their money. yvonne: that has to be frustrating. who is the best? who spent more than $100 million on artwork last year, including $36 million for a tiny, little cup, and he uses for it, so you do not have to worry about him paying for it.
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yvonne: thank you for joining us on this interesting story. high flyers, meeting a man who fled the 1962 socialist coup in myanmar, only to land in the cultural resolution. he had to leave his family to go to work at the age of 12, and six decades gone, he has control of 30 companies in myanmar. now ceo of the group, he says he spends hours talking with his father. i went a number of months, and it was physically exhausting, but we do chat a lot. we chat a lot about business, about people, and we just talk until we realize it is too late. in a way, we did grow a lot closer over the last years, and a think it is a lesson that we both of had the opportunity to work together.
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yvonne: and a surge. 6:00 p.m. hong kong and singapore time, "highfliers -- " high flyers." hong kong looking like this, down. the shanghai composite three quarters of a percent off, but the nikkei 225, the egg story playing catch-up after a three-day holiday, down 2.4%. some believe it is due to the carmakers. coming up next, in a tight race for the auto dollar in asia. how might the volkswagen problem change the game? "trending business" is back in two. ♪ sure, tv has evolved over the years.
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yvonne: top stories trending this hour. stocks rebound from the global selloff but japanese shares falling. industrials and carmakers leading the decline. investors weigh comments. the volkswagen ceo has resigned as the company struggles to limit fallout from the
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admissions --'s emissions scandal. they have asked local german prosecutors to start a criminal investigation and will appoint a new head friday. get off zero and quick. that is the investment by bill gross to the fed. he said if zero rates become the norm, the economy will run on empty. he said it is already beginning to happen in puerto rico struggles to meet liability. david is looking at what is moving the markets this morning. david? david: interesting note from hsbc. you look at what is happening in the chinese markets, the worst is likely over. you have seen the worst for
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mainland chinese stocks. shanghai composite, 12 months. along with the drop, the margin dip, this is on the website. aboutave been scaled back $218 billion. we are at roughly 115 billion u.s. dollars between the exchanges as far as the outstanding level of margin that. something to watch for. follow,es continuing to big drop. stock,f concern over the there is theina -- possibility that they have profited illegally, insider trading. down 1.25%. casinos continuing to take the
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hit. will the flood or flow of tourists into macau make up for what has been a sluggish year for casinos? we are seeing those shares fall. japan, worth mentioning. showing a drop of 29%. getting scaled-down. more a flexion -- reflection of valuation. shares down 7.5%. companyention, one more and japan, leaving the gains. er gainers.bigg shares are up 7.5%.
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same-store sales up 19% year on year. we are seeing declines, 2.4%, for the nikkei 225. automakers, down as a group three point 5%. like a cell now, ask questions later situation because of the mess dw finds itself in. that is the wrap up the markets. thank you. you've on: taking advantage of record low valuations to raise their stake. of move is a vote confidence. let's go live to singapore where our south asia correspondent is standing by. haslinda: they believe in the longer-term outlook for china. they are looking to broaden
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their exposure to the market. they raised their stake to 10% and paid $18 million. this is not the first time to my emasek has been sna pping up shares. there was concern the government will struggle to revive growth. they take a longer-term opportunityand see in record low violations. it is also how much risk you want to take. he yvonne: you see the concerns in terms of credit. what about icbc?
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how do analysts expect the lender to perform? haslinda: not too great. a bloomberg survey suggested they may record a zero profit growth for the year. contraction, the worst sense 2001. they are driving pessimism. the chief valuations were not enough for buying shares. ct is not just about icb alone. they do not like chinese banks as a whole. the balance sheets are questionable. their words. the valuations of china's biggest lenders are trailing below levels seen in the global financial crisis and europe's debt turmoil. investors are airing on the side of caution. yvonne?
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is said to be cutting 100 jobs as part of an overhaul of their investment banking unit. they are also exiting 25 countries. saider this year, they they plan to shrink the global operations to focus on u.k. and western european clients. ind of $19 million buying spree is sleeping. time, 10 sent became he said he is leaving to start his own investment fund. ent has declined to comment. taxi companies are going
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green. they are going to replace cars with their hybrid. the fleet will be more fuel efficient than the previous. -- prius. nisa is also exploring hybrid and electric taxis for new york, london, and paris. volkswagen is on the hunt for a new ceo after the current ceo quit over the cheating scandal. will it be able to get back into top gear as competition intensifies? news'so to's bloomberg reporter. effect of the tight global sales race between volkswagen and toyota? reporter: it is fair to say this
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is something that has been on manywagen's mind for years. passing toyota and becoming the largest automaker. they set a goal of doing that by 28 team. like it may be on pace to be ahead of schedule by a few thousand vehicles. the outsold toyota. it is hard to see how the company will keep that up through the remainder of the year. this diesel scandal will be hanging over volkswagen's head. had it been limited to the u.s. market where they are not a very competitive market, maybe this is something they could have overcome but diesel is very prevalent in europe's market. volkswagen is dominant. it will be interesting to see whether there is much fallout. it is not very big in china. it depends how much the state
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media b comes -- becomes interested and whether reputational damage is done in china. europe will be the way to watch, the key market for volkswagen for the remainder of the year about whether they can stay ahead of china through the next few months of the year. yvonne: we have to look at the japanese market as well. what is the fallout for the other japanese carmakers? craig: diesel technology has not been a strong suit of japanese carmakers. it has in part and because the government has not been keen on diesels and almost cracked it down years ago. have seen them get more competitive with mazza bringing out diesel. honda or nissan bringing
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out diesels. enginesturbodiesel going into their models outside japan. you are seeing some saw off. -- sell off. this is in part a catch up because japan has been closed for the last few days. you are also seeing harsher treatment for some of the carmakers who have been most aggressive. mazda, for instance, taking a big hit. much ton: there's so adjust to. what about the suppliers in asia? are we going to see pressure here? craig: you did see a toyota group supplier. much like the other suppliers. they have been pushed by toyota to diversify and go out and find
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new customers. you saw them get hit. substantial losses this morning. other suppliers selling off. they are one of the biggest companies we have seen in the red to start the day and may come under pressure as the scandal intensifies. atis in the early innings this point. we have plenty to learn about what the implications will be. how harsh the regulators are going to be with volkswagen. how this gets resolved. joining us live from tokyo. thank you so much. coming up next, taking to the skies. chinese carriers lay down tens of billions for planes. the country's aviation ambition when trending business returns. ♪
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anchor: stories making headlines around the world. malaysian police have arrested people in connection with the thailand deadly bomb blast. the shrine in the center of the thai capital killed 20 people and injured more than 100 others. the longest running in surgeon to in the americas could be nearing an end. the colombian president says peace is close following talks with farc rebels. in deadlock for more than a year. an agreement could be announced as soon as today.
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been celebrating the 800th birthday of kubla khan. he was the grandson of genghis khan and became the first outsider to ruled china, a source of pride for a modern mongolia attempting to assert its independence. yvonne: it has been a big day for boeing. visitedese president the main factory. not only did he order 300 aircraft, china announced the first plant inside china. stephen engle, you have been there. theknow the need for economy and government. how significant is this? stephen: china is a huge market boeing and airbus as well.
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this fact pumping out a lot of aircraft that go to china. a quarter of the out put. about a third of the 737's. this is a big deal. 197 737's. air china, china eastern, southern and the rest. they are goings, to go to the leasing agents. wide-body jetliners, we assume they are going to be 77's.or 787's. we have great video of the chinese president touring the plane.
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announcing they are setting up a joint venture with the chinese aircraft maker to build a factory basically inside china. completedoing to fly 737's and will kick them out in china. it will not be an assembly plant, a completion center where they can deliver the airplanes. history withg's china goes way back. : the first engineer for boeing, 1916, he was a chinese. they have a long history. they do have a factory in tianjin where airbus has an assembly plant. they build many parts for the 737. i have been in that factory.
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another step forward. in our i want to bring airspace editor. domestic aviation industry and what does this do? big deal aviation is a for them. they have talked about developing the industry. they have been developing their own plane. been constantly pushed back. there are delays. the new factory boeing is setting up, one of the things i am interested to see how this gives a boost to china's own domestic aviation industry. it will be more of a finishing school for aircraft. they will behink looking carefully at what they ean do to put the i finishing touches. what makes china such an
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important market? reporter: they are going after then any other market. itself says they expect $1 trillion worth of new claims over the next 20 years. for boeing, having a factory there, new orders, it is an important step in their global competition with airbus. thehen: how does having completion center in china help boeing sell aircraft? can we see a tangible effect with airbus? the rest of the factory is quite busy. that up going to bump to 58 by 2018. i guess they can get them turned over quicker and get them to the customer quicker. reporter: i think it solidifies the foothold in china. knowing felt maybe it was behind
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the ball. jinping decided to stop in seattle. that is not necessarily the center of global industry in the u.s. the choice of seattle and the visit to the boeing factory was a statement about how much importance china puts on this. stephen: other leaders have gone to seattle. let's talk about his next plans. we are eyeing washington, when he meets with obama. reporter: he has met with the tech leaders permit dinner with bill gates. he is going to a high school in tacoma. to his time going to seattle in 1993. there are ties to seattle. the technology leaders.
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dow chemical, others. he is reassuring the u.s. business community that china is a good place to invest and there will be a strong partnership going forward. yvonne: thank you. coming up next, why the central -- the brazilian currency keeps falling. how the social media is responding to this. ♪
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yvonne: welcome back to "trending business." media, the brazilian real. reporter: let's go to brazil. it is a good time for us but not for those in brazil.
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al plunging,e falling for the most in four years. this is what people are saying about this. some are supporting, some are saying it is time to plan the rio trip. counting their pennies against the currency. others standing up and supporting it. wages are 40% above those in mexico and china. those with perhaps the critique. shery: my brother lives in brazil and he is making money and korean currency so he must be having fun. let's head to the philippines. the controversy ruling there. intellectual property office being accused of stealing
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intellectual property when it came to creating their logo. logosite has posted the from a person claiming the ipo logo resembles the one they pitched in 2011. they say they try to contact and talk to the office and did not get a reply. the office has released an official statement saying they have never transacted with the , that a of that website making those allegations. imagine, a lot of reaction on social media with people saying, how can the ipo enforce property laws when they have broken it themselves? is up: we will leave that for them to answer. yvonne: that is it for us. stay tuned for "asia edge."
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our guest on today's show, the jp morgan chief emerging markets strategist. you are watching bloomberg television. ♪
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phil: i'm phil mattingly. donald trump's appearance with stephen colbert last night -- mr. trump: really smart, really great, they actually use the word genius. hillary, who has become very shrill, and i have better hair. do we agree i have better hair than he does? ♪ john: he has better hair than i do. on the show tonight, a pontiff, a poet, and a potpourri, but first, a poll.


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