tv Trending Business Bloomberg February 16, 2016 9:00pm-10:01pm EST
qatar says do not expect cheap oil to mean cheaper tickets. you can let us know what you think about today's top stories by following me on twitter. latest on the markets. chinese stocks continue to surge. a veryit has been volatile session. we are now in the green. commodities or energy-related players weighing down the market, as is the case regionally. nikkei 225 is down by a 10th of 1%.
that has been seeing some pretty wild swings. analysts saying we are seeing a little bit of profit taking when it comes to japanese markets. uncertainty over how long this rally can last. having said that, malaysia is in the green after early declines. kong stocks extending gains as trading gets underway, up by 6/10 of 1%. singapore in the red. the disappointing numbers, domestic exports dropping close to 10%, far worse than what we expected. the oil and gas space is suffering the most today. one andtor is down by
7/10 of 1%. the asia-pacific gauge down by 3/10 of 1%.
we spoke about some of the biggest movers today. softbank is moving up for a second day. exuberance,of that the share buyback plan. we talked about woodside. domino's pizza, better than expected results. that is one of the movers to the upside in sydney. the people's bank of china weakening by the most since january 7, so we are seeing some weakness when it comes to growth on short and offshore. this is the offshore yen.
weakening by just about 2/10 of 1%. in terms of the picture
when it comes to crude, we are seeing a little bit of a recovery, a rebound, if you well. upside,ading to the after plunging a most 4%. barrel.ing under $30 a thank you for that. let's stay with oil because -- it does not eased concerns about the global glut. in our bloomberg news energy editor, aaron clark, who has been trading -- tracking the latest developments. yesterday, the world's two largest producers, saudi arabia and russia, agreed to freeze production levels at what they
were in january. this is significant because it is the first time in 16 years that opec and non-opec producers have agreed to potential coordinated action to try to prop up prices. it is contingent on several other countries joining. the spotlight shifts to iran where producers will meet and try to lobby that iran join this plan. seen as the big barriers. they have been explicit the last few weeks that they want to .oost production, boost exports it seems very unlikely they would join this plan to freeze output where it is right now. they want to boost production as much as a million barrels a day. the big risk in this that iran will not join the plan. about fourre talking
major players. what happens to other producers if we see these coordinated freezes or a supply cut? aaron: even if there is a coordinated freeze or a supply cut after that, there is another risk with u.s. shale producers. they will not agree to any of these provisions. they simply respond to price. if you see other global producers limit production or even supply cuts, there is a risk that u.s. producers will increase production. u.s. shale producers are getting much more efficient, able to produce that 30 or $40 a barrel. there is another risk to saudi arabia and opec. they have had this strategy for the past year and a half to flood the market with oil and tried to drive higher cost producers out of the market. if they go back on this plan, it
is likely that could strengthen u.s. shale producers and opec and saudi arabia and russia may end up losing market share. there is a lot of risk with potentially cutting back on supply at this point. joining usn clark from tokyo. let's take a look at some of the other stories we are watching. here is juliette taking a look at one company in sydney that has been pummeled. petroleumwoodside shares very much under pressure in australia today. woodside shares down 6.5%. , neting crude prices income falling to $26 million from $2.41 billion.
volatility ofthe phil skied with the fluctuating oil prices, dropped to $1.13 billion. the company has also reactivated .ts dividend reinvestment plan woodside shares have slumped over the past six months along with that fall in crude prices. singapore.over to this is after singapore's second-largest bank beat analyst estimates with its fourth-quarter earnings. for jumped 21%. umped 21%.fit jo ocbc's net interest margin rose to 1.74% in the fourth quarter
from 1.67% year earlier. shares down around 24% over the past 12 months. just a touch more than the overall drop. city, shareslion are down 1% at the moment in singapore. hurtnment efforts have not the real estate company too much. it posted a 15% increase in fourth-quarter revenue. it has been a choppy year for those long in capital and shares down 21%. the company also warning that government moves to rein in property -- housing prices will continue to affect the market. shery: thank you for that. downside risk for the chinese economy, beijing is looking to
show it is up for the challenge. china's largest economic planning bodies are considering some fresh measures. david is here to shine some light. david: these are potentially significant adjustments in policy that will equip local governments and banks to help the government better respond to the slow down. let's start with the banks. the chinese cabin is considering lowering the minimum -- cabinet is considering lowering the many him him -- minimum ratio banks have to set aside for potential bad debt. a lot of debt will go to rolling over some of the debt in place. as a side bonus, it is a boost to earnings. a source telling bloomberg this current minimum ratio, some
banks have used a lower ratio of 120% for budget purposes. to give you an idea of what the current level of bad loans in china -- have a look at this. this is according to the pboc. at the end of 2015 -- that is to give you a very, very rough idea of how much money we are talking about that could be freed up. you need to make adjustments to this overall number. yet, very quickly before i go, let me look at this other set of measures. the economicaying planning body is looking to expand or increase the size of last year's special bond program. billion thatg $60
will hopefully be deployed towards new infrastructure projects. plan, if they do that every single quarter for this year, that would be roughly the same or double the size of last year's special bond program. shery: david, thank you. on our website, we are looking at how one trader made the trade of his life by getting returns of 800% in a market most people left for dead. you can get that story and much more on bloomberg.com/asia. multiple indicators suggest we are heading for a crisis. we will take a closer look when "trending business" returns.
shery: welcome back. it is another volatile day in the markets with the regional benchmark erasing losses, but giving up the gains. let's discuss it with mark matthews. thank you so much for talking to us this morning. where did that upward momentum we saw earlier in the week though? is that over? bounce you look at the we had, it is natural you would have people locking in games. standard chartered bank moved 17%. rating of a big re- lot of the other things that have been crushed. i think this rally has a few
more weeks, or even a few more months, to go. shery: some people are saying we should be buying into emerging markets currencies because they have been so oversold in the past year. would you agree with that? mark: i would, actually. i think if you look at the it had neverclass, been seen before going back to win statistic started in 1980 -- one back to when statistic started in 1980. basically, anybody who wanted to go has gone. they have been oversold and they are undervalued, but they have a few swords of damocles hanging over them. when the dollar goes up, it is a
problem for emerging assets. the other one is oil. i feel the dollar is no longer going up and i feel oil is building a base. the two things together, coupled valuations, i think there is a case for owning them. shery: you mentioned oil. how significant is this agreement between saudi arabia and russia and what should we expect when it comes to iran and iraq? had a crystal ball, but i do not. iraq and iran will be joining the conversation on wednesday, i believe, which is today. step andt is a first there is no smoke without fire. i cannot tell you how it happens, but my feeling is with prices at these levels, about
$30 for wti, this much of the world can make a profit on that. those guys have been pumping their oil to try to get the other ones to buckle, and once again, i cannot describe the sequence of events, but now you will see the supply coming off. shery: we are seeing this environment in the global economy when we see deflationary pressures, but asset inflation in the market. mark: i do not know where to start, but let's look at valuations. markets trade on sentiment and valuation and sometimes the sentiment is bullish and markets can become overvalued and sometimes the sentiment is bearish and markets become undervalued. i would argue there are pockets
of the world where people have been excessively bullish, and for example, the unicorns, and there is an overvaluation. there are pockets of the world where there is an excessive pessimism and undervaluation. last week, deutsche bank's market cap fell. no criticism -- i hope i am not it is afensive -- regional scandinavian bank. deutsche bank, operations in 70 countries, the market cap fell below it. there is opportunity and that is what we should focus on. shery: thank you for that.
>> british prime minister david cameron has taken his case to the heart of the block, addressing lawmakers at the european parliament in brussels. he wants the terms changed. do, the has work to french president said differences remain. q but and the u.s. -- cuba and the u.s. have signed a deal. american airlines can all start bidding on routes. the deal all the rises 20
regular daily flights to prevent a. president obama is keen to build trade and diplomatic ties with cuba before he leaves office. powered by over 2400 journalists in 150 bureau's around the world, this is bloomberg news. shery: it may be helping the carrier's bottom line, but qatar airways says cheaper oil is not necessarily good news for its customers. ceo whenear from the we return. ♪
of 30 year bonds with a 2.05% premium. the proceeds will be used to return capital to shareholders to fund acquisitions and to repay debt. groupon rocketed for a second straight day, reinforcing the alibaba effect. it came a day after groupon reported better-than-expected earnings. means grouponjump shares have surged more than 80% in two days of trading. says talk of customer delaying orders for new planes is not being reflected in reality. priceo says the low oil -- dynamic.very
there is a big fight among some competitors. asia-pacific accounts for 40%. area of growth and it will continue. airways says cheap fuel is helping the bottom line, but passenger should not expect to see the savings passed on in fare reductions. the ceo's says the oil is to cheap and the implications for air travel is worrying. >> the industry is slowing down. people are traveling less. they are careful of how they spent. this is affecting us.
i do not think it is a very good idea for oil prices to be below $50 a barrel. it is not good for airlines. earlier, people will travel less. because people are traveling for, there is competition capacity. it is bringing a downward pressure. >> if you say $50 -- >> we are hedged only a small amount of fuel, at a very high toce, i hope i will be able price to take a hedge again. , wes fluctuating so much are uncertain of where it is
going to go. we hope it increases because we want our business to increase. people expect because of lower oil prices, we will reduce our affairs. fares.uce our they should not expect too much reduction because when the oil price started to rise and reached nearly $150, we did not increase our fares 150%. this was encroaching on our margins and our bottom line. reboundbusiness will and that more people will travel in business class and first class on qatar airways to increase our profitability. shery: that was that qatar speaking to us at
shery: welcome back. the top stories trending this hour, oil is making gains in london and new york after saudi arabia and russia agreed to hold january's levels . traders are waiting to see whether iran and iraq will follow suit. just returned to global markets after sanctions were removed last month. the collapse in oil has had a woodsideimpact on
petroleum. net income fell to $26 million. woodside shares fell as much as 7% in sydney. by rampingepping up up spending and considering new measures to boost bank lending. beijing will make more money available to local governments to fund new infrastructure projects. the minimum amount banks must set aside to cover bad loans must -- may be reduced. check of theother markets. haidi: we are doing better than we were when the chinese markets opened. shanghai extending gains. kong also up.
australia back into the green, up 2/10 of 1%. southeast asia markets putting on about 3/10 of 1%. this is despite uncertainty over where the oil price is headed. machinery orders coming out of japan earlier today that disappointed. also around the region, gdp numbers coming up after the market closes today. a bit of a rally when it comes to casino stocks in hong kong. a gauge measuring these companies has broken through a key level. the last time this index was
, stocks took on a 160% rally. parks and retail surging -- parkson retail surging by 4.3%. seeing downside for the currency. we are also seeing downward pressure for the malaysian ringgit. thank you. the collapse in oil has had a dramatic effect on australia's second-largest producer. woodside petroleum is plunging more than 6% after profit fell
99%. .et's bring in paul allen woodside has been absolutely pummeled. paul: it is not one of their better days. a year ago, they posted a $2.4 billion profit. today, $26 million. woodside's worst results. the ceo peter coleman says the number reflects woodside's resilience. they did get hammered by this oil will price -- weak price. they did suffer write-downs. it is all reflected in the stock 20% sincen 6.3% off this time last year. coleman expecter some sort of improvement in the
oil price? paul: he says there are signs of strengthening and the oil price in the second half, but he is wary of that. the price does not have anything underneath. woodside has very low net debt. $1.7 billion cash on hand. they have been working aggressively to cut costs as well. they are pretty well placed to weather the storm. shery: paul allen joining us from sydney. net interest margins declined by two basis points. anz warned it expects bad debt
charges to rise in the first half. india's central bank has been ordered to release a list of the biggest defaulters. above $73 loans million that were written off by state owned lender's. the directive comes as india struggles to deal with assets. a march 17has set deadline for banks to clean up their books. chinese banks are shifting their lending to more open take the counts to get around a new crackdown on shadow financing. accounts to get around a new crowd down -- crackdown on shadow financing. how bad of a problem is this?
is an receivables account account for banks to put in their investments, other than bonds. since the regulatory crackdown in 2014, the shadow banking activities, banks have been putting their trust related assets. those are riskier loans that banks are not putting in their portfolio because regulations on loans are more strict. assets and yuan of the receivable accounts at the end of 2013. that number tripled at the end of last year. shery: do banks have to provision for the losses? >> they do not have to provision for the losses. that is based on the receivable
amount in the banking system. shery: i can imagine how worried investors must be. >> they are very worried and icbc -- prices dropped to record low about two or three days ago. icbc is the biggest lender in china. expects more loan delinquencies and losses and higher default in corporate debt. thank you so much for your time. the latest on chinese banks. consumers in china spent more
than ever on the finer things in life over the lunar year holiday. what were these chinese people buying during the holiday? >> quite an uptick in spending. still pretty impressive. 31% inspending, up total. spending for travel up 42%. spending on tourism up 60%. shery: what does it mean -- even with more people putting in casinos, what does it mean for the broader economy? >> you have to take it as a positive. if you consider some of the
relentless doom and gloom on china's economy, some of it is merited. it is quite impressive if you consider -- the ongoing negative sentiment on the one. consumers are spending -- on the yuan. consumers are spending. spending this sustainable? >> that is the big question. we know retail spending continues to increase even with the market rise. there are signs emerging that china's consumer is starting to move up the value chain. we have a long way to go. even as the consumer rises, not enough to fill the gap being left by the old economy, which is being phased out. alwaysthose numbers
of the pacific air force says china is closing the technology gap with the u.s. military. the training of american pilots still gives them a huge edge. prioritizedas modernizing the military. human error probably caused two trains to collide last week resulting in the deaths of 11 people. 18 more were injured when the two commuter train's slanted me to each other -- trains slammed into each other. the 39-year-old controller could face years in prison. powered by over 2400 journalists and over 150 euros all over the world. -- bureaus all over the world. shery: our next guest helps
overseas lockheed martin. haslinda amin is there live for us. you are absolutely right. asia is going to play a significant role. with rising defense budgets, lockheed martin has a lot to gain. good to have you with us. how does lockheed martin well position itself to capitalize? >> we are fortunate enough to have the broadest portfolio in our industry. we have the kinds of programs the countries need to protect themselves and promote security. >> what is likely to sell? systems,l our aircraft
we have those on display at the show. we sell integrated air missile defense systems, maritime systems, space, ciber. cyber. >> how protective our governments? >> we are seeing an increased demand across the world and the region. >> where in the region? >> that is really a government to government transaction and we support the u.s. government in their initiatives around the world. you really have to talk to the government about that. >> what trends are you seeing in terms of defense spending? has anything changed? >> the economies are growing in asia, stronger than the rest of the world.
that tends to really drive security spending. we see asia as a growth market. we have been in asia for three decades or more and we will be here for many years. >> asia versus the u.s. versus europe -- where does it stand? asiajust recently moved to . >> welcome. >> we have great partnerships with the countries across asia. singapore, in particular, is a very exciting place for us to do business. aboutre is a lot of talk the self fighter jet. what kind of demand are you seeing from asia? >> it is the world's most advanced fighter. every air force in the world wants to have it. >> singapore has been a participant, but has yet to
acquire the jets. are we likely to see any orders? >> singapore has been a partner since 2002. that is a choice they will make in terms of their procurement. >> what kind of challenges do you face? >> some of the challenges are the demand for technology transfer and we really like to find the best industry partners in each country to promote collaboration and cooperation so we can not just exports, but provide capability sustained over the lifecycle of the program. >> lockheed martin wants to expand its business. how does asia fit into that growth strategy? >> asia is a vibrant region, geopolitically, a very important region. it fits in the core strategy.
>> in terms of cheap oil? >> cheap oil has two effects. the government are impacted by lower commodity prices. i think we will see economic growth increase because of the reduction in the cost of oil. governments will have resources to spend. >> any assumptions you are making where oil prices will go? supply in the of market. that may well keep the oil prices low for some time. it is not a key driver for our business. japan and china, what prospects do you see in those markets? >> japan has been a great customer for lockheed martin. we have done a lot of programs over the years. an important security partner
for the u.s. in the region. we are excited about the opportunities of japan. japan has been pretty public about what their needs are and they are a great customer of ours. even though china provides a huge market for your company, china has been vocal in saying it wants to produce its own aircraft, weapon systems. how does that factor into your strategy in china? >> honestly, every country wants to build a robust industry in aerospace and defense. we like to work with countries to partner where we can. we are limited [inaudible] we are working with the singapore industry. we are working with the koreans,
the japanese, the australians. we are excited about the opportunity to make several products in india. >> what do you expect out of this airshow? >> we are a little bit discrete about our deals because of the nature of our business. we expect to see a lot of customers. you will see some great airplanes flying. yet again, a very windy day. shery: thank you for that. coming up next, from cradle to grave, how apple micromanage is the life and death of an iphone. inending business" is back two. ♪
how strict is apple when it mes to destroying their products? >> good morning. it is just as strict. they make products in china through companies like foxconn. very tightly controlled with a lot of security and secrecy. the reverse process is also very strict, very scripted, very controlled, behind security with closed-circuit tv. specialoyees sign nda's. one such facility is in hong kong. at the start of the process, they weigh all of the product. they keep track of it through every step of the process. they pull it together, they way it again.- they weigh
they account for it to make sure nothing has slipped out. components are not slipped into a secondary market for repair. all of the waste is accounted for. at the end of the process, apple can be sure they have accounted for every part of the product and can be sure it is being stored and maintained safely. shery: how big of a deal is this recycling industry? m: it is really growing big. companies like apple, but not hp, they aremazon, all companies getting very involved in the recycling process. it is a corporate responsibility thing. at the same time, all of the companies are banding together and setting standards, requiring themselves to recycle a lot more of their products.
governments around the world are requiring more to be done in terms of recycling. the companies around the world in the business of recycling, their business is growing and it will grow a lot as we go forward. china is getting very involved in recycling. we will see a lot more of this market growing. shery: how much money is there to be made from pulling apart and recycling these electronic products? is very business model interesting. there is one way you can make money from pulling apart and i annd false -- and i found -- iphone. all of the products of 20 years ago had golden them. these days, not so much gold. a lot of copper, a lot of plastic.
now recyclers rely on their themrate sponsors to pay for the service. apple pays their recyclers by weight, it is a highly kept secret exactly how much they are getting paid. all of the product that is being recycled and pulled apart and shredded gets owned by apple. at the end of the process, the companies themselves own their products. itry: we will have to leave there. that is it for "trending business." ♪
♪ >> from our studios in new york city, this is "charlie rose." charlie: supreme court justice antonin scalia died in his sleep saturday on a ranch in texas. he was 79. scalia was a transformative figure who changed the terms of legal debate. justice elena kagan said he is the justice who had the most important impact over the years on how we think and talk about law. ronald reagan appointed him in 1986, making him the first italian-american to serve on the nation's highest court.