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tv   First Up With Angie Lau  Bloomberg  May 15, 2016 7:00pm-9:01pm EDT

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angie: disappointing data underlining the challenge facing the economy. honda profit plunges again. the cost of recalling millions of cars with faulty airbags. the u.s. stock market hitting a snag concerned about restrictions. welcome to first up. right here in hong kong.
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from the asia-pacific to new zealand we are seeing losses this hour. lower on that1% disappointing chinese data. retail sales. right now you're seeing a decline in about one third of 1%. also counting down to the openings in australia. futures are pointing to a slightly lower open. plus including being in the second cut from the royal bank of australia. dropping to record lows. after that chinese data over the weekend.
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let's get over to japan tracking futures trading at chicago. we are seeing signals pointing to a lower opening on monday. japanese yen is still range bound. watching out for producer prices for april. we will break that to you when it comes. is the story disappointing data from china over the weekend that highlights the challenge facing policymakers trying to reform the economy and cut overcapacity. how bad do things look? in march we saw a slew of positive data. some would say this is a corner has been turned. the reality is that industrial output and production and retail sales and private investment all
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missed their forecasts. bloomberg tracks gdp growth. the bloomberg tracker has come and that is down from 7.11% in march. some of his cause by that date on industrial production. a big part of the reason is a slowdown in the coal and steel industries. a big part of that was a slowdown in automobile sales. down 5.1%. in march.ore than 12% private investors here seeming to lose confidence. as the forecasters had expected.
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new housing sales still up around 63% in april. due to cities putting curves to tighten some of that runaway growth that we've seen. the bank of china has come out and try to reassure the markets that they maintain supportive of the economy. just before this date on industrial production retail sales. the credit that we saw on friday. we were trying to explain their way to some degree. unusual anomalies. a major slowdown in credit is just not to be expected. they remain prudent stars from the pboc.
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economists don't expect any rate cuts anytime soon. they also don't expect any major slowdowns in credit growth either. it points to the tight rope walk is being walked by policymakers here in china. try to maintain this very difficult balance. angie: the record retreat of chinese copies from the american stock market is hitting a snag. dozens of chinese companies are being bought out and being left back home. stephen engle's is taking a closer look at this. it really had a huge impact on adrs. stephen: we heard that the securities regulator in china was perhaps studying a new plan for groups to come in about 47 companies since the beginning of last year had announced plans or are in the works to back to listening back home. they think they can better a
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better evaluation back home. not only the csrc but also the foreign exchange. the currency regulator. largestinto one of the deals. concern not only for the securities regulator but also the valuations that must be done. they are concerned about outflows. that could put further downward pressure on the chinese currency. that is what they've done in the last week or so. this is a month for the data. this is not just last week alone. by .3 billion u.s. dollars.
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still concerns about the currency outflows. angie: with the stock prices falling that makes buyout offers even more attractive. is that the companies as well. the people who are buying them out my go with it. to frothy. is exacerbating this froth that the government is worried about. the office might collapse because the price is so much lower. premiums to price acting. china information technology. social networking sites.
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one week prior the premium was 37%. that makes these overvalued areas more effective. hong kong had an unexpected contraction in the economy the first quarter. partially due to lower retail sales involving numbers from china. the city's weakening property market so sales tumble to 25 year low in february. it also weighed on the figures. the government is maintaining its gdp forecast. the prime minister of japan is theosedly going to postpone technology conference due to the impact of the earthquake. 49 people died in komodo.
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nintendo is looking to enter the film business. in an interview with the newspaper ceo said nintendo is in talks with multiple production companies as a complete its first movie in the next two to three years. it does not indicate what the subject of the first film might be. is targeting the american market in addition to japan. with an even bigger headache. the automaker put out its annual profit forecast and is laying the blame at the cost of replacing those faulty airbags. they missed the forecast by 34%. to $3.2 billion. that was the second year that it has fallen due to the cost of replacing those airbags.
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closing something counties around the world. many more vehicles than actually made last year. vehicles thane were present before. it includes the negative impact of the airbags. calculations for the last quarter. reported its first quarterly loss since 2009. estimates of just over $1 billion profit. increasing 9%. the stronger yen is continuing to affect all transactions.
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the forecast for the next fiscal year was assuming it will be ¥105 to the dollar. a big difference. $4.6 billion for this year of profit. that is a rise of more than 30%. because of their big replacement costs, analysts had in fact estimated that income coming in at $5.3 billion. you know i miss our schools of interview with the asia-pacific chairman ryan storck as we ask the world's largest money manager how it is coping with challenging market conditions. glenn maguire sees plenty more growing pains for asia.
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angie: welcome back. it 7:30 a.m. in hong kong. china says the united states is hyping up the military threat in the south china sea. china's national defense policy. they say washington is too suspicious. weaponize ions in disputed waters. without resorting to conflict. bangladesh says a swift intervention is primarily responsible for the death of the $18 million project. didn't follow some procedures before sending the money to the philippines.
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manchester united's end of season soccer match was abandoned because of what is now described as a security training device. people were evacuated before remaining fans were told the match would not go ahead. it was explosive device. it can accidentally left in the stadium by private security companies. angie: let's check some other key events we will see this week. on tuesday an exclusive talk with the world's biggest money manager here in the studio. talking to black rock ceo larry saying. he is a critic of negative income. think governments must do to boost the global
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economy. moving into recession as we see new gdp figures missing the mark. expecting an annualized growth of 3/10 of 1%. the yen has strengthened double 7% in the first this year. we'll find out whether they been able to slug off the slow growth in china. a 34% increase in sales. also a bump in operating profit. online game revenues also up. japan hopes of finance ministers and central bankers for a meeting on friday. the agenda will include sluggish global growth. has ruled out a discussion of further domestic spending. trying to kickstart japan's economy. president of taiwan.
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the formula used since 19 92. they say there is only one china but the two sides disagree on what that actually means. let's discuss all of that in a week that includes these kind of meetings in job numbers. indonesia and malaysia on thursday. glenn maguire is here chief economist for the asia-pacific region. let's look at what happened over the weekend. china submitted disappointing data. it does not look like stability anymore. glenn: the key take away we can the momentum that the chinese economy is starting to display in march was obviously unsustainable. very strong export numbers.
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the region's trade with the rest of the area. china was relying on old-fashioned stimulus. boosting the housing market in expanding the infrastructure budget. have a temporary kick for the economy and industrial production. one old-fashioned stimulus still works. sustained ifto be you want to see a stabilization return in the chinese area. that runs counter to the goal of rebalancing. angie: if they're importing less they're also doing was business when it comes to the region.
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the decisions going to be fairly balanced. we also have trade figures coming in for indonesia. likely to show that exports and imports remain in double-digit contraction. i think what we're going to see is the bank of indonesia clearly the trend toward moving to a new monetary policy regime from august 19. i don't think fundamentals are far enough away from the bank of indonesia central view for them to do anything about it. a meetingsia, it is with the new governor. i don't think he will be starting his 10 year with a radical move. anything that would take the markets by surprise. it is important to recognize is slowing.s growth this is leading to some interbank liquidity problems.
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the asian central bank front. it would have to match with the economy we do that is a risk that a central view. asian banks are on hold this week. there is still a lot of sentiment growing that it has got to do something. and it might be a back-to-back rate cut. glenn: the bank is in a difficult position. and quarterly development data. it suppressed the inflation figure. it was not an area where the reserve bank was expecting inflation. the labor market reading this week could be very important. unemployment has been falling. that is an important dynamic that ultimately should head to a
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little bit more confidence and a little bit more spending. at the same time this trillion dollar has been putting the reserve bank down. if we were having this conversation one or two weeks a royal bank of australia on hold outlook. but that outlook has changed. risk now is that the reserve bank is likely to ease in the months ahead. angie: what about the asian bond rally? glenn: to certain extent it is sustainable. it clearly is starting to skew towards lower rates. we have asia and what we call a trade recession. they are experiencing double-digit contraction seen port and import growth. especially vietnam.
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been in place for the best part of 12 to 18 months. the risk it is more links to a slowdown in domestic and growth. further central-bank easing across asia. a positive for bonds. the asian bond rally certainly has legs. on a relative basis when we look at the returns that are occurring in other markets specially brazil it does look attractive on a relative basis. chief economist from the bank. from trash to cash. provideative way to financial access to indonesia's poorest people. you are watching first up on
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bloomberg. ♪
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the city in eastern indonesia produces 800 thousand tons of rubbish every day. it fills up landfill site. the innovative plan is using garbage to get people access to financial services. >> this may be as close as that seen ever gets using a bank. she is withdrawing money from her counter the trash bank. 102 1000y i have rupees saved. the trash bank offers a way for some of indonesia's poorest people to get access to credit. the key currency is plentiful. it is literally trash. instead of throwing away rubbish and adding to landfills locals
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can take recyclable items like bottles and paper and packaging where the rubbish is weighed and given a much needed monetary value. funds also like to have regular bank. they can take out cash and pay back trash. no one has defaulted. from an economic point of view the project is getting results. with the people and rewards for the people. most of the account holders are favored and many are women. about $.15 per week. they borrow to tie their families over. the local government collects the recycling rubbish and takes it for sorting in a central location. they buy the rubbish and set prices. that means stability for those
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bringing it in and for the environment selling garbage outside. a little less than seven landfill sites and trash can be turned into eight cash and credit cow. angie: you can get more on all the top stories that are business destination. bringing together the best of bloomberg news. digital content all-in-one address. how hackers try to steal more than a million dollars from indonesian banks. coming up, we speak to the asian pacific head of the world's largest money manager. blackrock. that exclusive interview is just ahead on first up. ♪
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angie: it is 9:30 in sydney. here is a live look at the opera house in the harbor where we are watching closely the aussie dollar. it is closing on losses after a disappointing chinese data where the bank reassures investors chinese monetary policy will continue to support the economy. we are 30 minutes away from trading there as well as japan and south korea. you are watching "first up." china's economy resumed the flight to slower growth and they -- they missed
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economists estimates 6.5%. retail sales also miss forecasts over 10% after a rocky start to 2016, china's economy stabilized and picked up in march. companies look to the u.s. that want to go private have lost more than $5 billion in market value. regulatorsns that may restrict their return to china. shares in the companies plunged at least 20% since may 6 and management left this as they may back out because of tighter restrictions. sources say china's security regulators are concerned valuation with the backdoor listing are too high and could affect the market. the cost of recalling vehicles to replace the faulty takata airbags continues. a net income of $3.2 billion for the year of march, making its
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own forecast by 34%. honda will recall more. another $2.4 billion charge for the program. car by over 2400 journalists in over 150 euros around the world, this is bloomberg news. week.rt a new trading this after chinese economic data released over the weekend missed estimates. juliette saly is watching this. what should investors be looking at for today. it really is going to be this reaction to chinese economic data. they already have a record low this morning. quick data coming in on europe, they are reacting to positive economic turns out of the u.s. and retail sales and kpi. that did not go through the american stocks. they fell in love with jobs with crude prices. the dow closed 1%, s&p down
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almost that amount. we have a higher u.s. index up 0.6%, but the asia index was lower. so that is pretty much with the future is pointing to, mixed reaction coming from markets in this part of the world today. new zealand has opened first, down by 0.3%. price,an get the share it will be up 0.4%. ainn terra has maintained four year earnings forecast of 4551 -- $45 a share. ands also confirmed up dividends with june 7. we will be watching a lot of those commodities players coming through today. metals rising on the london metal exchange and global oil prices, even though they fell on friday, were up in the week. we are awaiting data in japan come forwardwill
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with first quarter pay numbers as well. looking at crude prices, this is the branch, up 5.4% over the course of last week. if we look at the u.s. contract for today, it was a little 0.2%, $46.28. angie: thank you. we'll watch japanese banking stocks after the first of the nation's biggest blunders released -- lenders release their forecast. they are predicting earnings from negative rates. we have the banking reporter derek allen with more in tokyo. what can we read from the reporting so far? reporter: good morning. we have got two of the three biggest banks reporting on friday afternoon. a little mistake. one of them did well, they were
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5% up on the consensus. another was down as expected because interest margins have been squeezed further since the bank of japan's negative interest rate policy was introduced in february. mitsui did not do as much. they missed estimates by $100 billion. this was a write-down on the bank investment. we also have provisions for the finance business. looking forward to next year however. mitsui is reporting they will be down, and mizuho maybe. they are as predicted looking to be a little low next year, and that seems to be because of the negative interest rate policy. mizuho that income for the fifth time in nine years, there will
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be smiles on the management. angie: yeah, definitely. but the gloomy forecast. what about mitsubishi reporting? reporter: yeah, that was japan's biggest bank, coming in this afternoon. we are not seeing any surprises from mitsubishi f j. mitsubishi f jng is going to come out and revise the way they report earnings. they are rumored to be the world's largest lender to the energy sector, as we see what has happened in the commodity markets recently is concerning investors. the bank is assuring us that there are not that big problems in that sector. a lot of that sector could be a big concern. all right, live for us in tokyo. we are watching all of that today. managerse largest many
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-- money managers blackrock has a conference, and we are a media partner for the event. let's go to the chairman of asia-pacific blackrock. he joins us in the studio today. , chineseppointing week data coming out. we had this sensibility coming out from china. will this you will concern amongst clients at this conference? ryan: good morning. it will be a topic of discussion. from our perspective we are mindful that growth is going to be slowing in the next years. more broadly speaking as we go , we manufacturing lead have to expect growth to slow. look at the growth profile in china and the rest of the world, on the absolute basis you still have growth rates on access with
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developed markets. if you look at the significant performance in capital markets opening up, you will still be in a situation where you see this connected in the long-term. angie: so why this reform versus policy driven investment which is what we saw underpinned the initive side of the growth china over the weekend? retail sales still very weak, but where is the turnaround? ryan: you need time. you have a really big economy that is moving from what was very manufacturing-lead to consumer-lead. so financials in china are releasing -- you will have that transition. it will go upwards, and it will take years. everyone is looking towards the release of the pboc.
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that will take a bit of time. angie: everyone is reeling against central-bank policy. makers are over dependent on monetary a. -- policy. do you think it is there? ryan: if you look at announcements out of the last two weeks in the pboc, and i even think the fed is more aware and attuned to know the directions in their own country but how this will impact global markets. that is comforting. while we are in the market of all attila the the next few --rters, the realization is of volatility for the next few quarters, this will have the law ramifications. this provides a sense of dampening volatility. angie: but it still persists, probably going to increase. reading from blackrock strategy this year, very much factoring in to how you are looking at the
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region. ryan: there is no doubt. if you translate every optimism about growth relative to volatility, so in some respects, what are you supposed to do? using new investment solutions whether it is around factors, these blending of access strategies, you will continue as bts where investors can make decisions in their portfolios. angie: let's talk more about that and strategies for blackrock when we come back after this break. he will pause for a moment. more of the exclusive chat with ryan storck after this. ♪
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juliette: it is 7:42 in hong kong. these are stories making headlines around the world. more chinese companies have chosen mainland people for a
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phone scam. 32 people are being held and deported from malaysia. china is also helping people the port on the same charges. the victims were mainlanders. taiwan says it is working to retrieve stolen money. the incoming president of the philippines says they must understand the friendly islands are philippine territory in not chinese. it will not relent on territorial claims or relay on detect events. -- rely on defense. there could be execution by hanging in criminal cases. the biggest ocean liner is making its main and journey -- maiden journey to the the sport of carl hampton. it displaces 120,000 pounds and can accommodate a point 5000 passengers and crew.
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it has 23ommodate swimming pools and even apart. it is the most expensive ever built, costing $1 billion. , inby over 2400 journalists over 150 news bureaus around the world. angie: the largest pacific money manager is holding its asia wealth symposium in hong kong this week. asian wealth has been weakening a little bit this first quarter for global investors and central banks. they are trying to figure out how it needs to bolster its own economies including indonesia and malaysia. how do you think this will happen. ryan: the public will step back. if you step back and think about the markets, they are caught by the lack of additional move by the boj and the surprise of the moves from the rda earlier this month.
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both malaysia and indonesia, the trend across the region will be would yous. angie: think of the fundamentals? investors like the bond market coming out. ryan: we are still constructive in indonesia. i think maybe there are some interesting things with volatility in malaysia in the short-term to pick up on. but china, india and indonesia are trade markets we like. angie: what about japan? , you in the context of know japan is going to go through some challenging -- i mentioned earlier the low rate environment and the boj negatives. that will put enormous pressure on financials. some are reporting in the next few days. from an industrial perspective, still reasonably destructive. there is a pressure, downward stocks. on japanese
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from evaluation perspective, you see really interesting companies. angie: in the first quarter, it led your growth strategy in the region. that has got to have shifted somewhat to the downside, especially after the boj surprise of in action. ryan: from earnings perspective, possibly. but with business across the region, japan is a part of our strategy with the institution but also the individual wealth and retail side areas that is a part of the wealth already sitting in japan as opposed to wealth creation from this moment forward. angie: it all ties back to china. week,was a speech last kind of affirmed whether people like it or not, it is still all about supply-side reform. so these headwinds will continue. where does the fallout play out in asia, and how are you offsetting that for your investors as they come to your conference and asked for guidance? ryan: i think the overarching
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at the is you look ability to own good companies in asia relative to owning broad swaths in massive allocation framework. look at india. there are great old world companies to own in china, but that does not say everyone should own shares in this. but those of the conversations we are having with clients. even outside of the region. seven years of a tailwind of strong turns help buy central banks. it is a fundamental story about helping companies and doing the work. angie: blackrock, your business is passive, third active. how is that ratio changing, especially when investors and
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institutionals are looking for a specific outcome? ryan: you will see more of a low-cost alternative make their way into allocation portfolios. look at etf is one example. if you compare asia to the u.s., etf market here is by and large institutional. look at that compared to the u.s. market, it is a minority, but a significant minority in the retail space. there is a lot of evolution to take place in asia for the wealth investor here. angie: speaking of japan, we are about to get pti coming out in a few minutes now, and we will break to that. speaking of which, there was a lot of anticipation that if the boj were to act, they would get more into the etf market. does that boulter -- bolster the business case for the products you offer? ryan: it creates stronger
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awareness. this is something constructive and helpful, but it creates awareness as in the context of the individual, the wealth investor. including some portion of their assets in etf. angie: so for a wealth investor, how much does the business like gain more wallet share? ryan: it is strategy. if you look at our business in of thet is a majority profile. it is a really important part of the process. we should think about the wealth creation that is not about taking market share. ideas.pplying investors hackers, the region equity platform is the best in the industry. to make tactical decisions in the short-term, and looking at alternatives.
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shot -- short-term equities. all of those we will increasingly find in the wealth investment portfolio. angie: but multi-assets is important over equities? ryan: it is a way for the investor to allow -- the professional investor in this case or the competitors to make faster allocation decisions in an environment where out but generally is not sticking around very long. so that focus in income stability of yield as well as the asset is something we will see more often. taking elbow but also smart data. in the negative rate environment world of ours, you cannot be passive. you cannot put it under the mattress. you cannot play it safe because that is probably even riskier than trying to get assets. ryan: those broad market allocations to asset strategies will morph into smart beta, country specific allocations,
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more tactical use of passive over the course of an environment where it is not as obvious where the increment of the alpha will return in the market environment where medical follows the thinking process. angie: what is exciting for you with your wealth clients in this region of a strategic point of view? ryan: the op-ed space. we have an enormous platform. i know you asked for one, but i will go back to my comment, i think that platform in what our team is doing is exceptional. angie: hold on to that thought right now. japan's api coming out. it is 4.2% in april from the previous year. economists surveyed were expecting a decline of 6.7%. let's check the yen on the disappointing tti figure for april, and there you have it, it is unchanged but still on that strengthening phase.
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range,road within that 108.62. let's go back to ryan here. first quarter was really awful for a lot of firms, and certainly blackrock is not immune to that. there has been a lot of contraction amongst firms in asia, and globally. is asia cutting jobs? ryan: no. that is the short answer. if you look at our market in this part of the world, we have been growing at an exceptional pace relative to the rest of the firm. we are also much smaller compared to the rest of the firm. from the investor perspective, from a client service perspective, and bringing not just global product here but also increasing capabilities in local markets has been a big focus. we are expanding our team, and we are looking at the fixed income side and the alternative space.
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expand. the expertise and the service. angie: you got your post, october 2014. thank you for joining us in the studio today. i'm looking forward to spending the next couple of days with you at the symposium for blackrock. we will have more from blackrock in the coming days. you do not want to miss the exclusive interview with larry think coming up on "trending business." up, a potential deal in australia's energy sector could see orange and take off at the market open. details ahead. ♪
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angie: welcome to the stock exchange. we are looking at the open to japan and australia. we have reporters to say what they are looking at. juliette: i'm looking at our
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state energy in australia. mitsui can be making final bids for origins assets in this space , 50% they are trying to offload. a final bid due in the next three weeks. it has not done well over the past year. using my pink calculator, 11% gain on the open. i should have done that hello kitty sticker. >> they had a great beat the comes to profits. avenue percent year and years ales read business going to japan, almost linked to year on year as well. very little impact from the stronger yen. they are also forecast 23% up. they are a part of this great premium pt story expected to hit $120 billion by 2020 with asia
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with the skincare, which is what they do best. complete a different type of industry, they make chipmakers, panel displays, and pharmaceuticals. it has a four-year operating forecast profit forecast by 60% to $100 million. and the profit for nine months was $116 million, which is better than the same a year ago. origin energy, shiseido, all back, thank you. that is the verdict from the stock exchange. these are highlighted based on news events areas back in an hour to see how we do. hour,g in the next alibaba is suspended from at 18 counterfeit in after only one month. find out why.l
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also counting down to the trade in japan and australia. this is first up." ♪
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♪ angie: disappointing data weighing on markets of the start of a new trading week. honda profit plunges again driven down by the cost of recalling the lands of calls -- cars with allstate takata airbags. and alibaba kicked out of a group after gaining membership only weeks. coming live from asia headquarters right here in hong kong on mobile and we have futures markets with a mix with a new trading week.
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this is after new economic data from china missing estimates. juliet is watching the boards. how are korea and japan opening up? juliette: it is looking like more weakness coming through. a little flat start in japan on the nikkei 225. we had the pti numbers coming through, so not only are investors reacting to the weaker chinese data but also pti 4% year on year in japan. this is investors surveyed, it was 3.2% drop. on the month we saw it lose three point -- 0.3%. a little weakness coming through in japan on the open. australia also opening the flat. we will get a fresh read on korea when it has time to open up. having a quick look at the yen, a little weaker. you can see when the pti marker did hit terminal, it was a
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little drop. .t is holding at 108 .67 we are also watching bonds because of the chinese economic data that came through over the weekend, missing estimates. that has a 10 year bond rising and the yield dropping to a record this morning, down 2.2% at the moment. we have seen quite a lot of money going into those debt markets. having more of a check on the market for the open and seeing what korea is doing. now we have a pickup on the nikkei 225. 0.3%. there was a mixed session coming through from global markets on friday. european markets rose on the -- expectation of u.s. markets, but u.s. markets fell. we have japan april machine orders for short labor. initial reaction, seeing good gains. on friday.l
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in korea, 0.2% in the early session. takata's lethal airbags are leaving honda with a bigger headache. they missed their forecast last year, blaming the inflation of the faulty product. we have a reporter looking into this. reporter: this is 34% based on estimate. -- it is the seventh role just year in a row the hit. honda recalled four times more than last year that it made. four times more vehicles that it made, which is a huge number. you'll recall 21 million more vehicles according to the executive vice president, they have made this a policy, and the
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negative impact of the $2.5 billion deaths related to airbags. and the fourth quarter, honda reported the first loss since 2009, a net loss of $316 billion. estimates a profit of $1 billion. so that is either a sales increase that i believe stocks are calling now. angie: what is the forecast for honda this year? reporter: it will eat into profits. honda had estimates based on a calculation of ¥105, that compares to ¥120 to the u.s. dollar. so this is a wide difference. is what results look like at the end of this year. the forecast this year operating profit $5.5 billion. it rises 19%, but against estimates of $16.8 billion, that
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comes to 3.6 billion for the again, and the rising net income but the factor of the airbags is not factored into the numbers. conservative, but the margins might be to return industry average levels unless in emergingmprove markets for honda. jeffries is saying yes. that is but hundred five yen where the dollar is conservative. but it is quote unquote disappointment. angie: thank you. some of the other earnings out of japan, mizuho said the negative interest rate will push the income down 11% the fiscal year to a four-year low. the second-biggest lender by assets expects net income to fall $5.5 billion in march. the ceo says negative income
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rates will cut $68 million per year. >> i don't think we will see significant growth in capital spending. we can't expect to grow if the global economy slows even further. impact of what negative rates may bring, but confusion can be resolved in the next six months or so. executives will start figuring out how they can make this policy. angie: meantime, sumitomo and mizuho death mitsubishi suing a rise in profit after that dropped last year. they reported negative for march 14.1%.ling 14 1% -- it is forecasting a rebound of $6.4 billion next year. many things affected our earnings other than negative
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rates policy, such as the slowdown in global economy, including china, as well as other geopolitical events. the impact of negative rates has been rather limited as a financial institution. there are things we can do with spending and investment and corporate japan. top story it is the today, all eyes on this disappointing data from china over the weekend that has highlighted the challenge facing policymakers trying to reform the economy, cut overcapacity, and curb excess credit. a big job. and tom mackenzie joins us from beijing. how bad is this for corporate china? it shows the major engine's of growth are slowing. it shows just how complex that juggling act for china's policymakers is. bloomberg tracks gdp growth on a monthly asis. this track came in at 6.88% for
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april down from 7.11% in march. we got more details for what is feeding into that picture. industrial output is 6.4% growth in april, now it is down from march, below forecast at 6.5%. the national bureau statistics saying a big reason for that was a slowdown in the coal and steel industry and its seasonal effects. retail sales also miss expectations. consumers are keeping their hands in their pockets. a big reason, it was auto sales. they were up over 12% in april sorryme down around 5.1%, they came down 5.8%. so spending from private investors make estimates remain cautious when it comes to
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putting money out there and investigating best investing. one bright spot was housing sales. they were up 63%, new home sales in april, despite measures like shenzhen and shanghai to target the hype in the high prices we have seen, 25% rise in shanghai, 6% on a year-to-year basis in shenzhen. angie: policy driven growth, what about monetary german growth? what did the pboc have to say over the weekend? reporter: the china bank came out saying the credit production we saw on friday and trying to reassure the markets and investors here saying that was down for what normally would have been a swap for a high-end expensive local government debt with usable bonds, something that is usually an anomaly. the pboc is reported.
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monetary policy is rooted but it really points to the difficulties in the balancing act. last week we heard from top lenders saying that leveraging and cutting overcapacity is a priority. but the pboc say they remain supportive. bloomberg intelligence thinks of cut is in- height -- order, but they do not expect a major slowdown. policymakers are going to tap the banks -- breaks gently with this complex slowdown. angie: thank you so much. tom mackenzie live in beijing. let's check other headlines. softbank is reporting sales at stake, and a finish gaining company super cell. they make phone gains and they have buyers in china. they could value super cell at more than $5 billion. soft bake bought a majority stake.
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to enter theooking film business according to a saudi news. news.hi they are in talks with multiple production companies around the world, and aiming to complete the first movie in the next two to three years. the report does not indicate what nintendo's first film might be about but it would be targeting the gaming market. japan's new reading against key data. we will check this out with j.p. morgan analysts. ♪
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haidi: stories making headlines around the world. beijing has criticized the u.s. report on land reclamation saying it hypes up the military threat. the defense ministry says the
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annual assessment will distort china's national defense policy, adding washington is just too sufficient. the report handed to congress says china is weaponize in the island in order to have control of the area without resorting to conflict. bangladesh says a swift interbank messaging system is primarily responsible for the cyber theft of more than $80 million. they did not follow procedures before wiring the money to the philippines. but the transfer of almost a billion dollars was held for a time. bangladesh said that that did not carry out due diligence. and vietnam's bank has been hacked through its risk. a manchester united end of stevens, this was abandoned because of security trading device.
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75,000 grandstands were evacuated before the main fans were told the match would not go ahead. the result controlled explosion of what police say was a , whiche explosive device was not viable. they say it had been accidentally left in the stadium by a private security company. powered by over 2400 journalists in more than 150 news bureaus around the world, this is bloomberg news. let's check events. we begin tomorrow with exclusive . we are talking to the biggest mine manager right here -- money manager right here. we are talking to blackrock ceo larry finke, a critic of .onetary policy we will ask you what he thinks governments must do to boost the global economy. ad japan will probably be void when it comes to new gdp figures on wednesday.
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economists we surveyed are expecting a growth of 3.1% -- 0.3%. they stretched the yen the first three months of the year. we will find out if they have been able to construct off the slowdown in china. -- shrug off the slowdown in china. online games are the likely sales driver. and japan has g7 finance ministers for a two day meeting beginning on friday. this includes sluggish local growth, rising currency tensions and the limits of monetary policy. but there would be furthered to miskick -- there might be discussion of further spending. the president of taiwan has refused to adopt a 1992 thing about the status of the island, if there was only one china.
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beijing has warned any breakdown in relations will be blamed on her. my next guest has downgraded japan as a stronger-than-expected yen. the earnings and markets lose e-nomics. in ab we have the head of equities in asia. you downgraded your stance on japan after that in action with the boj. >> a bit of a surprise, but it was on the downside. we downgraded japan at that point in time. he sullied the market, and central banks are not helping as we thought they would. reduce japan the neutral position. angie: what does abe need to do to regain confidence? >> central banks for injecting liquidity into the markets. e to help on the
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fiscal side. we need the boost after the meeting. the one with the finance ministers. hopefully the cuts, a delay, they are making the tax hike. hopefully more as well from a fiscal package. angie: we are hearing perhaps we will not see this second tax increase. households will be celebrating. will they be spending in the environment of negative rates? >> i don't know if they will be spending, particularly with domestic consumption. angie: do you like it? >> we still like it. we can to new death we continue to look at domestic consumption and shareholders, increasing dividends, buybacks, and so on. that has also been under scrutiny as a strategy for a lot of these corporate. --idends and dime backs
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buybacks are fine but it does not help with fundamentals of future growth. >> it does not, but as a shareholder you get whatever you can at this point in time. this is what the market likes. angie: you are rewarding that kind of strategy rather than moving away from it. >> corporate's have a lot of cash. with negative interest rates, you can remove that cash from their balance sheets, and that is a good way for them to return the cash and be friendly with the market. angie: what is the most important data coming out this week? i am not expecting much on data this week. there is something interesting from last week actually, which is china. the policy is changing in china. we have seen massive changing sentiments. we start the year, they were skeptical, and then a growth
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financing, fiscal reforms and so on. fiscal boosts, and so now the people is the authoritative person, talking about money for reforms. we saw a transcript of xi jinping's speech focusing on supply-side reforms. so the narrative is changing into reforms instead of adding more stimulus. and the market is not liking it right now. so we expect is the market to be range round, because there is no clear direction and what the policy is going to do. angie: i think it would be in the fourth week of losses for the shanghai composite by the end of this week. >> yeah, it is possible. we know it is a policy-driven market. angie: so if it is about supply-side, stay away from old economy? but that is what people have been doing all this time.
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weeks,ntly the last few the old economy has been running. over a week, which is expecting the new china to suffer from the long-term. angie: so one of your favorite calls for china, what would it be? >> it would be tech, environmental for these companies. it would be health care as well. angie: you are not worried about the debt bubble? >> we are seeing so many bubbles in china. everything has been debt bubble, everything recently. you have so many things to be afraid of. valuations are reflective in china. policymakers do not blow off anything, we should be ok in the long term. angie: thank you so much for joining us. coming up next, disappointing data out of china weighing on the aussies. ♪
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juliette: welcome back. it is monday the 16th of may. recoveringar is after they sold off on disappointing data out of china over the weekend. they pushed tenure bond futures up 0.6%. the best onar it is record. three-year futures have raisin six basis points -- risen six basis points. the aussie dollar trading at $.73. they have more room to run according to goldman sachs. is against the yen on the possibility of the boj using outlooks. bank of america merrill lynch predicts winning against the pound sterling. they reached a high on friday after the encouraging u.s. economic data.
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a pension fund manager in denmark says the threat of leaving the eu is too big to ignore. he oversees the equivalent of $83 billion and says he plans on using currency hedge funds to write a desk guide against the krone fallout when switzerland gets its own euro cap. japan, itta out of point 2% downur year on year in april, you cannot actually see the japanese yen is a little weaker, down 0.1%. the dollar holding at 108 .74. we have thailand gdp as well. it is seeing a little changed india economic data as well. those are the stories driving the markets. angie: thank you. an anticounterfeiting group has
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suspended alibaba's membership one month after it joined. we have a reporter looking at this. that is embarrassing. why was alibaba suspended? reporter: it was discovered that the president of iatc had a conflict of interest. he owns shares in alibaba and other members of the progress organization that fight complaints that alibaba was not , not rigorously counting -- cracking down on counterfeit. so the reason they were able to join was that in april, the iaac created a new category and alibaba joined afterwards. all of this is under review. angie: what does this mean? reporter: their share prices were down. in terms of investor confidence, it puts in question whether alibaba is on track to shake off its name and reputation has a
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haven for counterfeits, which is one of the things that has plagued this company. they have said they will continue to regulate and crackdown on counterfeits and in terms of iaac they have an independent unit to look at this. angie: this is critical to the global trust. reporter: alibaba wants more than 50% of revenue to come out of china, bring on more global branches. they have been trying to do this . in terms of attracting new brands. they really have to establish the fact that they are serious about cracking down on counterfeits. and so, whether they can really tackle this issue determines how they expand. angie: it could be readmitted? reporter: it is unclear. it depends on the investigations and whether the independent units, what conclusions they come to. angie: coming up, we take a look
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at whether the boj is getting banged for its buck after a record stimulus rate cuts. interesting charts. ♪
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♪ angie: 8:30 in singapore, half an hour before trading there. will be aing like it down day for asian stocks outside of japan, this after china data disappoints. you are watching "first up." asian shares of start of the week flat. prices for japanese corporate goods at 4.2% in april, a bigger drop than expected. china's industrial production and retail numbers fell short of projections, and back in australia's 10 year bond yield at a record low. on the shares are lower with the cost of takata airbag recalls weighing in on the bottom line. 3.2 begin dollars for the year
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ending in march, missing its own forecast by 34%. honda will recall 21 more million vehicles, booking another to $1 billion charge for the program. companies that want to go private have lost more than $5 billion in market value, a concerned that regulators may restrict their return to china. shares have plunged 20% since may 6. the regulator thinks that valuations are too high. powered by over 150 journalists, this is bloomberg news. let's check in on the markets in the asia-pacific or if japan's nikkei 225 is climbing higher. we are seeing gains in australia. it is about 0.25% higher. a --d have pdf coming in ppi coming out of japan that was
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disappointing. weighing down on equity. i will to you what is waiting down on equity, they thought that never before has the bank of japan had to do so much to achieve so little. even after a record stimulus program and cutting rates to negative, the central bank inflation target of 2% remains a far away. other indicators suggest kuroda 's measures are failing to get traction. we look at the charts. haidi: it is not a good sign when it appears as major central bank is seemingly running out of policy bullets. that is the case when it comes to the bank of japan. on friday saying, really reiterating there is more that they can do, and it would not hesitate from additional lending or easing across three dimensions, quality, quantity and the interest rate. more has to be done if inflation
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continues to knock out traction this is really showing the data in the boj strategy. ,apanese government bond yields have well documented, falling to record lows. that is having an impact as the bank of japan has been intended, but corporate bond yields have diverge at the start of this year. that is not good when it comes to bringing down the cost for japanese corporate product. what we are seen as well is the issue of inflation, or rather a lack of inflation, the 2% target that has long been in play, it thears at the start of quarter. the purple line is the inflation slump. investors are expecting consumer price increases holding close to zero for the next decade. it appears the market is managing expectations for how the inflationary campaign is
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playing out. you cannot blame them. we are seeing cpi coming up here on the blueline, and cpi, with that consumption tax hike coming down as well. the bank of japan continues to blame lower oil prices, energy prices as being part of that and certainly that is part of the equation, but you have to question consumer demand in the animal spirit in the japanese market, failing to gain any traction. the concern is to get the second sales tax hike and are rumors and they will be forced to delay it once again. seee does proceed, we will that decline in inflation and pressures coming again like we saw the last time. this is really the story of the bank of japan doing everything they can, record expansion of stimulus, going into negative rates and trying to drop off the yen which is starting to lose its effect as well. angie. angie: well, the markets are
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also not playing all anymore -- ball anymore. haidi: right. to backtrack, if you want to bring up the story, here is the top story. chart that isxt really depressing if you look at the efforts japanese policymakers of it going through. the yen has been strengthening aside from the intentions of the boj. exports, a record amount of stimulus and we are seeing began as one of the top performers so far this year, a gain of 12%. a lot of that is a dollar weakened the story, but this is not what policymakers want to see. at the same time, they are seeing the topix starting to fall, trading at levels much lower than the stimulus package was expanded four. rally afteruroda
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the entire program came into play, but that is starting to fade as well. there is the sense that investors at least are starting to lose their patience with the entire economic experiment. finally, angie, i want to dove it is not just the markets in the yen feeling that - lackluster effects, exports declining, baked lending starting to best lending starting to fall. although this is not bode well. is the lowering of diminishing returns, what more effect can we start to see? angie. angie: thank you. let's do a quick check of japanese banking stocks after the first of the nation's biggest lenders release their forecast for this year. $368 millionting a earning cap from mitsui financial expecting a wide
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profit. we have our banking reporter with more from tokyo. what can we read from the reporting so far? reporter: hello, angie. let's look at two out of three of japan's negative a fax reported on friday afternoon, in the next back. -- mixed bag. net interest income was down as he expected. the margin from lending business has continued to be decreased. they have made progress selling their share profits to their client customers which help them to boost profit, bottom-line profit this year. $100 million, 100 down because of
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t in theirion hi investment in the nation. they had to make provisions for their consumer finance which is still suffering losses from the interest that goes back a few years now. the interesting thing is the net income exceeded for the first time in nine years, so it is an interesting fact we get from the results on friday. angie: what about mitsubishi? they are reporting this afternoon and what can we expect? reporter: hard to really read a lot into friday because it was a mixed bag. down withe income margins at least. we saw the subsidiary in the u.s. reports last month, and quite some significant
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subdivisions made on energy loans in the u.s. and indicate may change howei they expose their energy lending. case, it will be interesting to see how much they need to provision for those lines that could change the following rates. angie: thank you so much for that. let's take a look at what you are that's what we are following for you on the bloomberg. attacks rise because of the financial impact because of the recent earthquakes. willi news says abbe announce his decision after the g-7 meeting later this month. the government is preparing an extra budget with more than $7 billion to help with earthquake relief. sony will start making camera sensors at its newest factory since the first time of the u.s. quake.
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the water processing facility will resume on saturday. the company released its earnings forecast for the current financial year three days later. sony had to make a projection for the 12 month ending in march so it could assess the impact of the earthquake. warren buffett is backing consortium chasing. loansoup includes quicken founder dan gilbert and is in the second round of betting. 10 initialreceived offers for its internet operation. other bidders include verizon and bank capital. --bain capital. yahoo! shares rose friday. "captain america" stayed on top of the box office, giving disney to number one position for five weeks in a row. civil war generated $72 million
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over the weekend in one of the biggest openings for the second week. their other title "the jungle book" remains in second place in theaters. "darkness"ter" and finished in third and fourth place, respectively. the record retreat of chinese companies from u.s. stock market is hitting a snack. g. we are taking a closer look at this for us. they want to go back to china? stephen: they want to go back to china, some 47 countries or so, about 2/3 of them, the deals are still pending. they want to be bought out in the united states and reenlisted in shanghai so they can get a better evaluation. there is concern drawing over the security regulators that the premiums being paid are too
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high and will cause more volatility. we know what happened to the chinese stock market last year with the peaks in the valleys. they do not want that kind of instability. also, on the fx regulatory front, the data administration of foreign exchange says the study in negotiating as well one of the largest deals that is going on. they have about a $9.3 billion buyout deal that is in the works. the administration of foreign exchange is concerned about the outflows for pain for these deals and the downward pressure that that would do on the yuan. there are a couple of regulatory fronts we're looking at here. the securities regulator in the foreign-exchange regulator. in the last week, we saw $5 billion of market capital, of many of these chinese companies listed in the united states evaporate after may 6 when we had the crsrc studying these
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deals. this is the full and the past month. buyout inhe biggest the works right now. social networking, down 30%. in internet company, down 35%. yy and renren also in this mix. a number of internet related companies, a lot of them have seen the market caps with the speculation that they may step in it and call some of these deals. angie: thank you. still to come on "first up" the indonesian innovation that is giving the poorest people access to cash. special report coming up next.
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♪ the city in eastern
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indonesia reduces 800 tons of rubbish every day. most ends up in landfill sites, but it innovative plan is using the garbage to give the poorest people access to financial services. we report. closeer: this may be as as she ever gets to using a banking institution. she has been withdrawing money at the trash bank. have 100 saved and now just 66,000. reporter: this offers a way for some of indonesia's force people to save and get access to credit and a key currency is plentiful, literally trash. instead of throwing away rubbish and heading to landfill sites, locals can take recyclable items like plastic bottles, paper and packaging to trash bank collection points where the rubbish is weighed and given a monetary value. customers can open accounts, and withdraw funds
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almost like a regular bank. they can also borrow cash and pay back trash. far,ank manager says, so no one has been folded. >> from economic interview, this gets results, a project originated from the people, organized by the people and the results are for their people. reporter: most of the account holders are favored in most are women. week whileay $.15 a waiting for paychecks. because of local governments collecting the local rubbish, they take it to sorting in circulation and help support the whole scene by buying the rubbish as a prices, which means stability for those bringing an end and a boost in the environment by selling the garbage for recycling. if the less ends up in landfill sites and trash can be turned ow.o a cash and credit cio
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juliette: stories making headlines around the world to fraud suspects have agreed in a malaysian phone scam. 32 people are being held after being deported from malaysia last month areas china is holding 45 taiwanese deported earlier from kenya on the same charges. beijing says it has jurisdiction because the victims were mainlanders. angie: taiwan says it is working to retrieve the stolen money. the incoming president of the philippines says beijing must understand the islands are philippine territory and that china's presence there is illegal. he will not relent on territorial claims, nor rely on defense pacts with the u.s. to resolve the dispute. he also told a news conference that he will urge lawmakers to reinstate executions by hanging in criminal cases. the world biggest ocean liner
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making its maiden journey in france to the english port of southampton. tons andces 120,000 can accommodate eight in the half thousand passengers and crew. 8500 passengers and crew. it has been called a floating city with 23 swimming. 20 restaurants and a park. it is the most expensive cruiseship ever built costing a billion dollars. powered by over 2400 journalists in 150 bureaus around the world, this is bloomberg news. the world's largest money manager holds its annual asia symposium in hong kong this week in bloomberg is the exclusive media partner. i asked the chairman if that disappointing data out of china over the weekend is fueling concern among clients and s.vestors are i
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reporter: we would have to expect growth. if you look at china relative to the rest of the world, you still have growth rates, which is what you have in developed markets, so if you couple that with a significant reform agenda and capital markets opening up, you are still in a position where you will find great assets to overwhelm the china market. angie: it is still very sticky, the supply side and demand which we saw underpin the positive side of the growth in china over the weekend. retail sales are still very weak. where will this turnaround happen? reporter: it will take time. angie: it has been a long time. reporter: well, you have a very big economy that has moved from manufacturer to consumer led. financials are releasing, and
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that transition will take years, and i think everyone is looking towards, you some reassurance over the weekend from the pboc, and i think that would just take a little bit of time. angie: bob slater has been railing against central-bank policy makers with the overdependence on monetary policy. do you think pboc is there? reporter: i think so. if you look at some of the announcements that came out the last couple of weeks from the pboc, and i even think the fed in that instance is more aware and attuned to not just their actions in their home country but how this will impact mobile market, so i think that is comforting. while we will be in a market in volatility, i think the realization that the impacts it will have in the home country are going to have double ramifications, i think that is providing some sense of dampening the volatility. angie: but that volatility will
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probably increase. reading from black rock strategy this year, very much factoring into how you are looking at the region. reporter: there is no doubt. if you translate the optimism about growth relative to the volatility, in some respects, you will see new, innovative investment solutions whether that is run factories, a blending of strategies, i think we will continue to use the bts where they can make allocation decisions for the portfolios. angie: we will have more from black rock in the coming days. do not miss our exclusive interview coming up on "trending business" tomorrow at 9:40 hong kong-singapore time. coming up, reports of serious interest in origin and energy. impacts on the markets, coming
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up next on "first up." ♪
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angie: welcome to the stock exchange. let's check in what is trading in asia. there were bids in this for origin energy to go up 11%, but they have changed, down 0.5%. this is with the theory bidding for -- mitsui bidding for origin
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assets. it was looking like it was going to go up, but investors have shrugged results on origin energy. angie: does not look pretty. [laughter] juliette: although it is close. up 70%, this is sales of visitors that went to japan almost doubled, so very little impact from this strengthening yen situation and raising income forecast by 20% as part of the popularthat has been so and really hopping. vacuummpany that makes byices, operating forecast $170 billion. they say is third quarter
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results in the last nine months, those profits have been 170% better -- 117% better. thatholders seem to like and investors are up 9.7. shery: it is the top performer on the nikkei at the moment. i should point out that i initially picked this. we appreciate that. shery: you appreciate i do not stick to my original forecast? [laughter] angie: that is it for us on "first up" today. what is coming up? yvonne: adjusting the china data that came out over the weekend.
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all engines seem to be losing a little bit of momentum, but that market reaction has been pretty minimal. we have to guest on the show. we will talk about china's debt addiction and the china economist, who thinks he got a does not look as bad as it seems and we will ask her why. we are counting down to thailand gdp coming up. down in terms of on quarter, growth may have slowed as of market volatility. we will digest those. we're also talking about virtual reality, the worse of the video stars and china's internet titans or investing in. more of that coming up.
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♪ yvonne: happy monday, the 16th of may and 90 von man in this is trending business. ♪ we will be live in sydney, beijing and singer of the summer, but first, this is what we're watching this morning. asian markets showing disappointing data from china, but started to take an optimistic view, australia shrugged off early decline, the yen weekends and oil remains around $46 a barrel. with as among the losers plunge of the recall of mill


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