tv Trending Business Bloomberg May 15, 2016 9:00pm-11:01pm EDT
♪ 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 millions of colors -- cars to replace
faulty takata airbags. they missed estimates by 34%. alibaba is kicked off an anti-counterfeiting group, amid questions of the platforms and worries about a conflict of interest. alibaba says it must be part of the global fight against fake. to let us know what you think of top stories, you can follow me on twitter at @yvonnemantv and do not forget to include the hashtag #trendingbusiness. singapore and malaysia have just come on a line -- online. how are they digesting this data? juliette: yes, we were pointing to a next session. that is certainly what we are seeing with the ppi numbers coming through the japan, the yen is weakening so japanese stocks are higher and australia due to the fact that we see good movement in base metals on
friday. elsewhere, there is data coming through across the board, singapore and malaysia coming down online, all down between .1% and 0.2%. the chinese economic data coming through on friday, affecting across the board. markets up without an interesting note saying daytrading chinese are likely to go short, so it'll be interesting to see when shanghai comes on. let's have a look at what is driving these gains on the nikkei 225 apart from the fact that we have seen the weaker yen coming through with a very strong profit number, up by 11%. still seeing some weakness coming through from some of those export companies like rubble which has been under pressure. the oil and gas sex are low today. oil rising over the course of last week, but falling quite significantly in new york on
friday. we are seeing weakness coming through. you did pick up and consumer goods and health care and consumer service stocks. the regional index is higher but a bit of a mixed session coming through across the board today, because we did have the disappointing data out of china and japanese ppi. yvonne: thank you so much. that disappointed data from china over the weekend, it has highlighted the challenges facing policymakers trying to reform the economy, cut overcapacity and curb access credit. let's go to tom mackenzie who joins us live from beijing. tom, just how bad does it look, coming off of a pretty big surprising quarter of expansion. reporter: it certainly reverses some of the optimism we saw in the positive data in march, and it points to just how difficult these gyrations make the balancing act of policymakers,
and how difficult it is for investors to get a gauge on the forward path for the economy and retracted gdp on a monthly basis, coming in around 6.8% in april, down from around 711% in march, and of course we got more detail about this on saturday as to how the economy is faring, industrial production up 6% in april, well below the 6.8% in march. the national bureau statistics say large part of that is due to reduction in coal and steel the man, also some seasonal -- demand, also some seasonal effects. fixed as that investors coming below forecasts as well. they were up 5.1% in april. quite some slow down there. private fixed income and assets that missed targets as well, showing the business leaders are
not confident in the economy and are not putting their money where the authors -- where their mouth is. we heard the bank of china calming concerns about the slowdown in pointing to somewhat of a one-off where we saw a bit of exchange in high cost, low government debt for cheaper municipal bonds and they say that is an anomaly. the pboc saying they remained supportive and they have a proven policy, but bloomberg intelligent analyst say they do not expect a rate cut this year, or at least it has become less likely, though they expect the slowdown in credit to be gradual, so a gradual tapping of the brakes as policymakers try to balance this very tricky alignment between competing interests. yvonne. mix on all fronts. we will take in more detailed
look at the story later in the show. we want your opinion. china data helped push australian bond yields to a record low on growing concerns about the aussie economy. let's bring our fx and bonds reporter who joins us live from sydney. is this a sign that things are getting worse? reporter: good morning, yvonne. that is a good question. tenure on deals did hit a record low this morning, but the economy is not doing too badly. aemployment is at a two and half year low in consumer spending is soaring. overall, policymakers have seemed quite pleased with how the local economy is coping with the downturn in with the slowdown in commodity prices. the missing piece is wage growth and inflation. we have seen inflation at a record low in the first quarter, and the reserve bank just cut
interest rates to 1.75%, an unprecedented low this month in reaction. they also said inflation would miss their target demand of 2% to 3% this year. most traders expect the reserve bank will go ahead, cut rates one more time and maybe that will cut rates twice. the more important part of the reason why we have these offer a low yields is not just what is happening domestically, but what is happening in most developed economies, and the fact that policymakers really have not been able to find a solution for low-inflation, tied to that is the massive stimulus in europe and japan, and while trade in bond yields are low, they are pretty high when you consider that in japan get negative rates across many maturities. looking at the uncertain growth environment, looking at the uncertain inflation environment wanting to buy government bonds, but they ask, where can i get relatively good returns in
astoria still stands out. that is adding additional pressure to bond yields, pushing them down even further. , also: and look ahead wage growth data coming out of austrailian, a big risk and the back-to-back rate cut. thank you so much, joining us live some city. let's take a look at some of the other stories are watching today. more earnings news. reporter: part of the shares have lifted up. reported net incomes falling $3.21, missing its forecast by 34%. looking ahead, it will likely impact profits. for this financial year, on the forecast in at rise of $2.6 billion in that is based on the assumption that the end will be at 105 to the u.s. dollar compared to the 120 last year.
we are getting a look at how the bank of japan's negative interest rate policy is affecting some of its banks. the negative rate policy looks at discrete financials, japan's second letter, and sees net $4.5e falling 11% despite billion in the year ending in march. mitsui financial expense arise of a .2% and profit to $6.4 billion, but that is off earnings selling selectively. alibaba expected to lose its reputation taking a blood. it is suspended from a global anti-fake group just a month after getting membership. a globalonal ship is organization fighting piracy and fake products. was ejected from the group after a complaint from some members because the company
has not done enough to ban fake goods from its marketplaces. yvonne: on her website, we are looking at warren buffett backing a group bidding for yahoo!'s core assets. that is a bloomberg.com/asia. coming up later this hour, the right to create. why china's internet giants are taking a different approach in virtual reality. asian stocks could see a recovery, but it all depends on china, next on "trending business." ♪
billion in asian stocks. arnold, great to have you. taking a look at the chinese data over the weekend, he said the asian stock recovery depends on what happens in china. has there been any relief so far from what we have? reporter: no, it is quite clear that the economy and china is doing alright, but the rest of the economy, the industrial economy was posting numbers, they are looking up but remains weak. we do not expect to improve quite quickly, especially after the recent debate last week on which way china is heading, and it is clear xi jinping does not want china to head in that direction. it looked like it was veering in march to do more debts and go back to distill production. if that is not happening, then a lot of those numbers will continue to fall and will put a damper on the overall region, which is why i was saying, do not expect too much from the
asian region from here where we are at the support level and cannot fall much further. we will not see any earnings growth, and essentially that is the driver of equity markets. yvonne: well, if we see tighter credit conditions in april after we saw what march had with record highs, but the credit growth. how much of a stretch for the sabbath corporate balance sheets, and get this trigger more defaults? >> sure, that is what you see such a worry in china, a number of week companies of their. a question is to what it stand will -- to what extent will the state extend a hand? you have the implicit guarantees here and there which may or may not be heated. you will definitely see unrest. most of the stock market listed companies, their balance sheets are relatively ok, so you will see a lot of gain in companies we would not invest in.
the other ones should be ok. yvonne: what sectors do you see things are looking a little ok? you mentioned that the shanghai composite, you should be looking that as a gauge of the economy. where are you looking at sources of growth drivers in the chinese market? >> the real growth drivers, the consumption is still holding up quite remarkably well, i must say. considering the rates growth is also slowing down quite a bit, and people are prepared to spend and take out mortgages if they can, so those kinds of consumption related sectors continue to do relatively well. what we have seen their is there have been some problems of overcapacity and therefore margins of companies in the sectors have been under pressure, but that seems to be stabilizing, so you can see some opportunities in consumer discretionary and maybe in consumer staples because that is where your seen most of the margins shrank. yvonne: we still see retail sales looking strong in march
and april. you seem like not too much a believer in a strong yen which seems to be the consensus, they believe the yen will go higher than it already is. why do you think so, because we continue to see global growth concerns and a lot of reluctance coming out of the boj to do much? fortunately, they cannot do too much, because the one thing that tried was such a miserable failure and put the bank system under pressure, so there has been a fight between mr. kuroda and the bank of japan and mr. abbe that they should not go in that direction any further. that is why they have come to a gridlock here, that japan cannot do very much, which for me is fine because i do not believe monetary policies will provide japan at all, and what i am surprised with is the fact that so many investors have gone from being extremely short with the japanese yen, which is only five months ago to being extremely
long with the yen, thinking we're headed straight back into deflation. everything i hear from people in japan is that we are not going back into deflation. occasionally you still see companies raising prices, apartment prices have gone up a stabilizing, but there is no idea that we are going back into deflation which is the only reason why the japanese yen may be strong, because you have the real rate, and what is that these days? [laughter] >> that would offer for a stronger yen. i do not expect deflation to take hold, still seek .6% energy inflation in japan, which is clearly nothing to percent that the bank of japan is looking for, but it is not the deflationary environment where we had -0.3%. it is still a long way to go, and i do not see much pressure downward on inflation, and that is why i do not believe the end will be very strong, which is
also why some people think the japanese valuations look pretty attractive and that the markets should really be inspired by those improvements we have seen in the company's raising the dividends. not shootthey do themselves in the foot now. i just think the guidance is lead to them being ok. yvonne: thank you so much for joining us. the stories making headlines around the world. beijing has criticized the u.s. on land recommendations in the south china sea. the defense ministry says this will destroy china's national defense policy, adding that washington is too suspicious. the congress as china is organizing islands in order to
have control over the area without forcing conflict. the incoming president of the philippines says beijing must understand that the islands are philippine territory and china's presence is illegal. they are due to meet the chinese investor today and will not relent territorial claims nor rely on a defense pact with u.s. to resolve the dispute. he also told a news conference that he will reinstate executions by hanging in criminal cases. end the season football match was abandoned because of what is now described as a security training device. evacuated in the remaining fans were told to match would not go ahead and a local team carried out a lifelike explosive device but was not viable. it had been accidentally left in the stadium by a private security company. powered by over 24 journalists
♪ yvonne: we have breaking news coming out of nintendo after it is seeking to enter the film business. the company says it will use funds from the seattle mariners sale for his movie operations. they are to include dvd, film let's in the company is in talks with multiple companies at the moment with the film production operation, so we did hear a report over the weekend that the company wants to do as much as possible with some production and him to complete their first movie in three years and targeting japan and the overseas markets, including the u.s. nintendo shared 1.9% in tokyo
right now. swissdesh says his interbank maxygen -- messaging , and now a vietnamese bank says it has also been hacked. let's go to christopher languor who joins us live from singapore. good to see you, chris. how does this work and why are they being hacked? tell us more. reporter: the huge messaging system among thousands of banks it is the world, basically at the core of all of the international banking transactions that happen. every time you transfer money to somebody abroad, there is a little message that is sent saying, this money is coming from you for us, and the money is transferred. is that basic trust of not being able to trust who is messaging you or how that message is coming to you,
undermined. i do not know what will happen with the international banking system. it is something to be worried about, you on. -- yvonne. yvonne: you mentioned the impact it could have on the global banking. he says the swiss must take responsibility for the hike. has been saying it is not the responsibility. somebody hacked on the other side and sent the message their swift saying they were somebody else. again, if the banks cannot trust who is sending them the message, they are going to stop trusting swift altogether. that is very complicated, because again, swift is at the heart of all of the international transactions it they send millions of messages every year, actually billions of messages every year, and they charge for every message that is sent.
that is their model, owned by all of the banks but it is a very profitable business. if banks cannot trust each other, how are they going to trust which is at the heart of banking? swift has to do something to change that, and they are not doing enough. yvonne: what can swift to do, chris? reporter: well, swift has an annual event, and i happen to be at their annual event last year, and every year for the past two years, they have been talking about a lot of block chain, which is the same technology used for bitcoin and a distribution of ledger and what it does is it allows transactions to be independently verified, so you stop needing to depend on somebody on one side to verify that that is true or not. a kind of brings trust back to all of the banking transactions because you do not have to trust everybody, you trust the
machine. the trouble is, swift has been very slow, have not been swift at all in adopting block chain because they are afraid it could replace their system and replace them altogether, but they have not embraced it entirely, and as they slow and they are lagging behind and block chain develops, the hackers are catching up with them and are really entering their system and hacking a lot of banks and making a lot of money. yvonne: all right, chris. ,s you mentioned, your column it is a marathon not a sprint. southbank is considering the sale and super so. a majority makes stake in the health developer for $1.5 billion second 2013. we are seeing softbank sales up
you can never get enough of it. change the way you experience tv with xfinity x1. ♪ not the same yvonne: top stories trending this hour. and next start to delete for asian shares after disappointing economic data from japan and china. japanese stocks are gaining despite producers falling in april, and chinese production and retail numbers fell short of predictions. australia's ten-year bond falls to a record low. honda shares are down after the airbag recall continues to weigh on the bottom line.
they are missing their own forecast by 34%. honda will recall 21 billion mark vehicles to replace the faulty airbags, the thing another $2.4 billion charge for the program. alibaba has been suspended from a global antistate group just one month after winning membership. the international coalition iseiting a nonprofit organization against piracy and fake products. alibaba was dropped after a complaint from members saying the company had not done enough to been safe goods from -- some goods from marketplaces. back to the markets now. investors react to the disappointing chinese economic data. we have china and hong kong coming online. juliette: a little bit of a weak start on the open from hong kong and china. the shanghai composite down a third of 1%, but the hang seng pretty flat. this is what we will be
watching. elsewhere, we have seen general weakness coming through in markets. the philippines joining in that.. korea, pretty flat. japan is doing very well. we do have the dollar up against most of the currencies. the yen is weaker. solid moves that the nikkei, rebounding from the 1.5% loss on friday. in australia, good movement coming through on the asx 200, up by 4/10 of 1%. health care stocks leading the gains. that is what we are seeing across the region. health care and industrial stocks leading the game. it has been a switch out of oil and gas players, as we continue to see crude retreat from the six-month highs. having a look at some of the
other stocks we are watching today, this is an interesting story on the bloomberg. hna group, ap -- large chinese conglomerate, in talks with the biggest shareholder of cwt. in tokyo, toyo tire and rubber has plunged the most in 16 years, almost 23% down. that is the biggest decline there isil 2000, after a forecast drop in ¥24 billion. checking in on the australia bond, dropped to a record, down 2.2%. yvonne: thank you. the record retreat of chinese companies from the u.s. stock market is sitting a bit -- hitting a bit of a snag.
concern is growing that beijing may block plans by dozens of companies to be bought out and relist at home. what is going on? a number of is companies with deals still pending that they want to be bought out by various companies, to delist from the united states and perhaps go back to china. the thinking as they could get a better evaluation in china. what is happening now is you have the regulators in china, not only security regulators, but fx regulators, also known as save. they are looking into the outflows. a number of deals are being done in the united states to buy out these companies. that could exacerbate outflows and put downward pressure on the renminbi. the largest pending buyout deal
of the chinese company in the united states, 9.3 billion u.s. dollars. the other concerned with securities regulators is they are paying too much for these companies. when they relist in china, they will be at two hi a valuation, and that could create more volatility that they would want to avoid. these are the stock prices. --andomly picked about four 47 companies, two thirds of which the deals are pending. they have not fared well in the past month. there is increased speculation that regulators might step up and block these deals. yvonne: we were talking about 40 something companies. $26 billion plus worth. buyoutly makes the offers even hotter. --stranger.
reporter: if we could bring up the premium to price ratios, the offer price, $4.23. there's a premium of 269%. they are paying the offer price so much higher. one week prior, it was 216%. the stock prices making it less valuable of a company. data center company. 68% premium, widening. one week ago, it was 23%. i just picked some of the widest margins of all the companies. wonderingy people are whether this could prompt a number of buyout firms to scrap offers, or revise them lower. yvonne: or it could be more instability in the stock market. thank you.
never before has the bank of japan done so much to achieve so little, even after a record stimulus program and cunning rates -- cutting rates to negative. indicators suggest the policymakers are failing to win traction. we have some fairly somber charts year. -- here. haidi: you have to wonder if the theory of diminishing returns is playing out. they now -- they have never had to do so much. there is a record amount of stimulus coming through, and still just not seeing markets or indicators playing ball. the question is, has the bank of japan runout of policy bullets? never a good thing when you think about a major central bank. take a look at the inflation. this is the key metric. the japanese government's preferred metric of growth. 2% inflation has been the target. -- take the look at cpi
a look at cpi. that is the white line here. we are seeing that in deflationary territory. whether we will get to that 2%, it is looking good. the government has said this is the impact of falling oil prices, dragging down the overall metric. that is kind of true. the blue line, that works out. we are seeing a little bit of relation, but it is just about 1%. taking a look at inflation, this does not bode well. this line is saying that investors are really expecting inflation to remain close to zero. the market certainly does not have a lot of faith in what the boj can do. came out to kuroda
reassure markets that they will do as much as they can. that further easing is not off the table. they will look at all three quality,s, quantity, and cutting rates. the markets are just really not playing ball anymore. haidi: that's right. it isn't just macro indicators playing havoc with the boj. let's see if we can bring up this chart. theyapanese government, have been wanting to get the yen down, but we have not seen that happening. it has been one of the top performer so far in asia this year. that is probably the weaker dollar story, but certainly the yen is going in the opposite direction of what the boj wanted. it is wreaking havoc on exporters.
japanese stocks is trading at a lower level than what we saw expended the record amount of stimulus. the dovish fed is not boding well for further yen weakness going forward. yvonne: thank you. checking on other stories we are following, reports from japan say prime minister shinzo abe anl respond -- postpone input -- income tax rise because of the recent earthquake. and thee died, government is preparing an extra budget worth more than $7 billion to help with quake relief. sony will start making camera sensors at its main factory for the first time since the strong earthquake hit. the facility will resume on saturday. the company will release the earnings forecast for the
current year three days later. sonny has delays making a production for the 12 months ending march. captain america, civil war on top of the u.s. box office for a second week, giving walt disney the second -- first position for five weeks in a row. the movie generated $72 million over the weekend, one of the for a film inauls the second week. it is also one of the biggest superhero movies ever made. inney's other title remained second place. china's internet giants are taking on the world of virtual reality. but instead of hedging their bets on creating headsets like sony and facebook, they chose to fund startups and focus on content development. let's bring in our tech reporter. she has more to tell us about what alibaba and baidu are
doing. essentially being the middlemen. reporter: that is right. even though there are more than 200 startups in china, working on anything from headsets to consoles, there is no clear winner at this point. and --ibaba, 10 send there is noaidu, clear winner. they are saying, we are creating a content platform, comment put your stuff on our platform. they are also taking several startups but not picking a winner. yvonne: in terms of the strategies, how does -- how do they differentiate? reporter: alibaba is the e-commerce giant in china. jack ma says he wants to help women shop smarter on his site. he is using technology to
improve the shopping experience. the other company has 50% of revenue from online gaming. vr gaming probably will be the first sector to mature in the industry. in terms of baidu, their video unit, i see them leading the initiative into direct competition with both the other companies. yvonne: in terms of content, which company has done the most? they're working with more than 300 companies at this point, inviting everyone to come join the platform. suite they are using which will be a key part to create vr content. any creator can put their content on the app, which will sync with all the headsets.
they are also streaming live concerts. yvonne: i would love to blair a headset and be in the mall and start shopping. -- where a headset and be in the mall, and start shopping. ofil slowdowns, highlights the challenges going for broke without drowning in debt. we will talk china, when we visit with the chief asia pacific economist next on "trending business." ♪
taiwanese deported from kenya on the same charges. they say they had jurisdiction because the victims were mainlanders. soldiers clashed with aboutinian protests, people driven from their ancestral lands in 1948. nakba, orn as the catastrophe. the world's biggest ocean liner is making its meeting journey from france to the english border of southampton. seas canny of the accommodate eight and a half crew.it passengers and is 50 meters longer than the eiffel tower is high. it has swimming pools and a park. it is the most expensive cruise ship ever built costing about $1 billion.
powered by over 2400 journalists around the world, this is bloomberg news. yvonne: disappointing data from china over the weekend has highlighted the challenge facing policymakers. let's break this down and look ahead at the other key data points this week. just give us a breakdown of what you thought over the weekend from china. is it just as bad as it looks? point, nohink the key matter what the economy is like, it is just not big enough. not growing fast enough.it is being contaminated . they will havenk to go back, no matter the leverage.
they have to push. that is the key in the data breakdown we got this weekend. services want to make it. consumption services are not big enough yet for the challenge. yvonne: there is a signal, some people saying the pboc name cap the rates when it comes to -- can you call this a policy shift at this point? guest: the one before last was break that anyone in the central bank would have gotten scared. when your credit is growing at the same pace as 2008, in the midst of the largest stimulus package, you probably step back a little bit. this does not mean they are changing gears. a means they are taking time to swallow that, which is a lot. when you see what happened with
the breakdown of that large march, march was more than one third for the real estate market. thought, it isnd not going where we want so let's refrain. yvonne: you are seeing the real estate market is the elephant in the room. guest: it is. if you look at the largest corporation in china listed, 25% ofe studied, it is the market. and it isd globally, 0.5. they are tracking all of this credit. the pboc has slowed down, but what can they do? these are so large, the real estate developers, not to get
credit. otherwise it would be huge restructuring. we are talking about the largest sector of china. yvonne: what does this mean for growth? guest: i think they will do their best to avoid that. credit would be high. they will do anything on the physical side to make it happen. they could do rate cuts, but i don't think they need to. they can do so much with the open market. they can allow for more on shore -- they can avoid the big cases
leading to evidence here. i think they can do all of that. that would bring them to the figure they want. seems like growth is on the back burner -- the forefront i should say,. let's talk about japan. a story coming out of the terminal saying, never before has the boj done so much and gotten so little. exports falling, inflation far from 2%.have they run out of policy tools ? guest: we have learned from the centralthat bank cannot solve the country's structure problems. taken by time -- it can buy time, and they have been biding time for so long, so much for shinzo abe to realize it. but he is taking the wrong policies.
it is going to put an additional burden on the fiscal. about 5% additional budget , with the excuse of the natural disaster. but they are not announcing anything that is worthy. even if they pushed towards consumption, it is not real. labor productivity in japan is as low as ever. reforms, andthose i don't think shinzo abe is ready. yvonne: thank you. i appreciate your insight. rubbish., rewards from indonesia came up with a novel cash from credit. special report, coming up next. ♪
the city in eastern indonesia produces 800 tons of rubbish every day. most ends up in a landfill site, but an innovative lan is using the garbage to give poor people access to financial services. reporter: this may be as close as tina ever gets teasing a banking institution she is withdrawing money. from her account at the trash bank. -- i just have 66,000. reporter: it offers a way for indonesia's poorest people to save and get access to credit. it is literally trash. instead of throwing away rubbish localsing to landfills, can take recyclable items like plastic bottles, paper and packaging, to trash bag collection points where the
rubbish is, given a money tri-valley. -- monetary value. they can make deposits and withdraw funds, almost like a regular bank. they can also borrow cash and pay back. the bank manager says so far no one has defaulted. >> from an economic point of view, this gets results. the project originated from the people, it is managed by the people, and the rewards are for the people. reporter: most of the account holders are favors, and many are women. they can put as they as little as $.15 a week, or borrow while waiting for a paycheck. they rubbish is taken for sorting at a central location. they help support the scheme by buying rubbish at set prices. that means stability for those taking it in and a boost to the environment by selling the garbage for recycling. a little less ends up in landfill sites, and trash can be turned into a cash and credit
yvonne: good morning, it is monday the 16th. i am yvonne man, and this is "trending business." ♪ we will be live in beijing and tokyo this hour, but first what we are watching. disappointing data from china. but there is still an optimistic view. the yen is weakening. oil remains around $46. honda, overged at the be call of the takata
airbags. they missed estimates by 34%. they continue to do so much to achieve so little, despite a program. policiesof japan's will not work. follow me on twitter. include #trending business. trading is underway in indonesia right now. we will look at the markets. a pretty mixed picture. juliette: absolutely. we are getting good gains coming through on the weaker yen, the nikkei to 25 up slightly. australia, up to half of 1%. the is on the back of planned australian legislation to control rent if the prime minister is reelected. we have had a massive material
benefit for players like sonic health and primary health. we are seeing health care stocks higher in the region, but there is a switch up from the oil players and also weakness in the shanghai asian markets after the disappointing economic data over the weekend. the shanghai market down by three quarters of 1%. hang seng, looking better here in hong kong. we are seeing these energy players coming under pressure. we had indonesia down by a third of 1%. looking at the u.s. dollar index, it has been on a tear over the last couple of weeks, high oned at a six-week friday. goldman sachs sees the rally
and merrill lynch also expecting that the u.s. dollar will be strong against the pound sterling and the aussie dollar,. the 10 been looking at year bond as well in australia hitting the record low down 2.2%. the strong u.s. dollar on the back of the china data. yvonne: let's go back to the disappointing china data, highlighting the challenge facing policymakers trying to reform the competitive -- economy, and curb excess credit. let's bring in our china correspondent from beijing. what does the data tell us? what it tells us is some of the major drivers of the economy here are slowing down. we track the gdp on a monthly bimonthly basis. wasame in at below what it
from march here it is. we have some more details over the weekend, breaking the numbers down with industrial output coming up 6%. in march.low the 6.8% the national bureau of statistics saying that is likely due to a slowdown in the coal and steel sectors, suffering from overcapacity and weak demand. then there is retail sales. the chinese consumer, keeping their hands in their pockets, particularly in automobile sales. way below the 12.3% rise in march. then there was the fixed asset investment which missed forecasts as well, suggesting business leaders do not have confidence in the economy at.
-- yet. one potential brett -- bright spot is new home sales, up 63%. that is despite policies in some places to curb the runaway prices. again, that is a credit fueled part of the economy. what reaction can we expect from policymakers? we did hear from the pboc of the weekend and they continue to support it. tom: the pboc trying to put out reassuring messages. theicularly on the back of friday date we saw, the slowdown in the credit expansion. they said they remain supportive, and it remains a prudent policy, but we know it comes on the back of last week's comments we got from top leaders. they are moving away from debt
fueled growth. that is obviously very difficult to strike that balance. bloomberg intelligence expects they are less likely to be further rate cut this year. they also think the slowdown in credit growth will be gradual and marginal. it will be a cautious step by step approach from policymakers here. but some investors are already taking a bet against the chinese markets. one of the major china etf's, 10% of the remaining shares being shorted. that is the negative interest on the china economy here playing out in that etf. of course, the balance remaining difficult, as the policymakers try to struggle and maintain credit growth, but not too much, and trying to maintain medium growth without pumping too much
money into the economy. yvonne: could be just pushing a little bit less on that when it comes to credit expansion. thank you, tom mackenzie joining us from beijing. we will take a look at some of the other stories we are watching. a potential ipo in hong kong. a $1.1-- rosalind chin: billion ipo in hong kong in the coming weeks. combined 208 million shares being offered, at 42 hong kong dollars each. it will take up 52% of the base offering. china investment corporation and the other fund are each investing $100 million.
boc aviation aims to debut on june 1. honda recorded net income falling, missing the forecast by 34%. looking ahead, a stronger yen is like the to impact profits. repatriatedpact the value of profits by japan. this financial year, honda forecasts a rise in net income to $3.6 billion, based on the assumption the yen will be at one average of 105 to the u.s. dollar, compared to 120 last year. policy,tive rate japan's second-biggest lender by assets seized net income falling 11% to $5.5 billion in the year ending march. that is a better outlook then analysts are forecasting.
meanwhile, another expects a billion, after last year's earnings fell unexpectedly. yvonne: thank you. the chinese conglomerate that controls the fourth biggest airline is eyeing another overseas acquisition. this time, the target is a logistics company based in singapore. bloomberg asiahe editor david mccone. why are they on this foreign buying spree? david: there are a couple of motives. one is that the company is emphasizing the travel business. they have been adding airline related businesses all year. they recently bought the gate group, one of the largest catering companies. they also bought swiss court a port,e handler, -- swiss
a luggage handler. they are covering all the bases. china's travel market is booming, it is the fastest growing market for airlines. it is not a big surprise to see them buying in that sector globally. yvonne: is this the right fit? hna?ould cwc fit in with david: this is a company looking for growth in the travel sector. the other thing is chinese companies in general are emphasizing outbound acquisitions. they are buying companies outside china, as growth slows domestically, in addition to some concern that there could be yuan devaluation. now is the time to buy when the currency is higher.is a lot of demand globally at the same time for travel services among chinese. they are traveling all over the world in most of the major tourism markets.
one company after another is making moves to cater to chinese tourists. the company is following that trend and adding the exposure to the tourism market. yvonne: we certainly have seen that in terms of the chinese insurers as well, and overseas buying sprees. let's talk about cwt. why is it looking for a buyer? david: a couple of our reporters broke this story back in july, that they were looking for a buyer. this is a family run and operated company. the family, including the ceo, own more than 55% of the company. they are looking to diversify and looking for another stakeholder. another big force within the logistics and airport services industry, there has been a big consolidation among airlines. as they consolidate and also enter into co-sharing agreements, these sorts of
t service -- their compare.also have to they need to gain the scale they need to compete. yvonne: live from tokyo, thank you. breaking news. last week we talked about this. $1 billion strategic investment from apple.we are learning that the is set to rival consider a u.s. ipo as soon as 2017. apple may be reaping the benefits of this investment sooner than thought. are still deciding on which u.s. exchange for the trading in terms of timing, they say it depends on the uber battle in china. such a move may put the chinese publicad of uber going
greater china economist. what are you seeing as possible green shoots, not as bad as it seems? guest: april data showing moderation, but the underlying picture is not as bad. key reason is, we are still optimistic on infrastructure investment and growth april data shows some. moderation. we had something called a conservancy project. this category itself dropped 10 percentage point. that is one of the biggest factors this month. if you look at the data, it is super volatile. 10% drop is tracking above the 12 a six-month average. more important me, if you look at the ad lat -- amount of easing coming through. ofil, record month in terms issuances. the mostsing is important factor in determining
the pace of growth. that means that actually this particular category of investment is strong. the growth recovery of the current cycle, for that to hold up, that bigger confidence that that will hold up, it's actually more important. yvonne: it's interesting you mentioned fixed asset investment. that is the slowest space we have seen in at least 2012 we don't quite see the spirit when we come to these private sector dismisses. is this a concern? they are the engine of growth, not really inefficient so easily see in china. guest: in a normal period, we think private sector should be the biggest part of investment growth. we are in the fourth year of the downturn. seeing agly, we are relatively larger degree of pessimism along -- among private
sector investments. it has dipped even further, 0.5 decline -- 0.5% decline. it has not picked up. it is a bit naive to expect that to drive growth. what we are looking for this year is for the government sector to accelerate public-sector utility infrastructure investments, and for that to provide some growth. once theis that economic situation stabilizes for a couple of months, the private sector can get an assured outlook. yvonne: i'm interested to get your take in the last couple of weeks with the people's daily, when we had this mouthpiece announcing that china needs to face nonperforming loans. and they need to take a look at more pay when it comes to the debt levels. we have the pboc saying, we will continue to support and reassurance investors. what gives? will this be the thin ice we see china is facing and walking on
right now? guest: we have a slightly different perspective. last year we saw a lot of monetary easing rate cuts, and reserve cuts. monetary conditions on the whole are very flesh. liquidity is very abundant. what has happened and changed is the fiscal picture. the fiscal support is being increased since january this year. that is really what is behind the stabilization we saw in march. we think it will behind the stabilization later this year. the pboc is good for them to come on. fiscal has additional benefits. it is more targeted. yvonne: do you think the pboc has room to hold off on intervention at this moment when it comes to the currency? it has beennk that going slightly higher, a slightly stronger dollar.
that leaves some participants in the market thinking of it as an opportunity, may be to return to a weaker trade. but from a policy perspective, there's no real urgency to push on the currency side for depreciation. i think there's a lot of acknowledgment they don't need to do this. they are having initial success. does weakenncy because of market forces are the stronger dollar, the pboc is fine with that as long as there market.nic in the i don't think there's a real need for policy to actively push for any depreciation here. yvonne: julia, thank you. these are the stories making headlines around the world. criticizing of land reclamation in the south china sea, saying it had something military threat. the defense says the pentagon's
annual assessment will -- willfully distorts china's national defense policy, adding that washington is too suspicious. the report says china is weaponizething -- thing in order to have control over the area without resorting to conflict. clashed withders palestinian protesters marking the day when people were driven from their ancestral lands in 1948. the creation of israel and displacement of hundreds of thousands of palestinians, are known as the catastrophe. there was cheered got fired as troops try to stop protesters from approaching a checkpoint. in manchester united, they ended a football match, but it was abandoned because any security training device. beforere evacuated, being told the match would not go ahead. a disposal team carried out the explosion of a lifelike explicit device -- explosive device.
yvonne: this is "trending business." i'm yvonne man. the record retreat of chinese companies from the u.s. stock snack.is hitting a concern is growing that beijing may block plans by dozens of companies to be bought out and relist back home. stephen engle is taking a closer look. what is going on? reporter: basically said the beginning of last year, we had , u.s.han 47 companies
listed companies that are chinese, that want to be bought elisted in the u.s., then back door listed in shanghai. the thinking is they can get a better valuation at home. there are a couple of snags. there is concerned -- concerns raised by the security regulator that some of the valuations paid at least two thirds of the 47 deals, that they are still pending and the valuations are still high. that is a concern by the they came because back, relisted in china at too cause valuation, that can volatility. there is also concern that the currency regulator is studying the deals, including the largest of the $9.3 billion buyout of the internet and antivirus company listed in the u.s.
that deal is pending. they are concerned about the outflows these purchases are going to exacerbate and further exacerbate the yuan. these regulatory bodies adding some concern in the markets when the deals can actually go through. about $5 billion worth of market value in the last week since the news came out that they were studying this, is gone. yvonne: some of the stocks have lost more than 20% of value in the past month. with stock prices falling, it makes the buyout authors -- offers even frothy or. -- frothier. offerer: the premium on is 269% on this clothing company. networking company,
68%. either going to exacerbate valuations, overvalue the companies, or more likely, the buyout firms that are pertaining -- purchasing the companies are going to drop out. either they will offer lower or drop out. yvonne: we will continue to watch that. thank you so much. softbank is reportedly considering the sale of its stink -- stake in a gaming company. a sale could value super cell at more than $5 billion. softbank board -- bought a majority stake in the helsinki-based developer for $1.5 billion in 2013. a developer has received a takeover offer from certain members of the companies founding family. billion -- $195 million.
♪ top stories this hour. stocks going to a two-month low after an economic slowdown and a drop in credit card also near march lows. commodity produces are looking at declines in shanghai. it will highlight the policy makers trying to sustain growth. and we are told that -- is targeting an ipo next year and it could put the ridesharing service ahead of the u.s. rival
uber in going public. ddle put $1 billion in two and it has boosted the valuation to around 26 value -- $26 billion. alibaba is also the key investor. on 11% this year after a $368 million hit from negative interest rates paid they expect death rates. they expect in a percent rise after the unexpected drop in earnings. they will report later today. and some less program and a negative rates have failed with inflation and japanese stocks are little changed from two years ago. we will go to juliette:. juliette: i pretty good morning session. we are going on the lunch break up by one and we have good moves. coming through from the export companies, coming out with earnings today, this was
variable on friday. but it is very strong with games coming through there. weakness from the pond. -- mabon, they are under pressure credit and the asian market is down by a quarter of a percent, still looking at chinese stocks holding your these two-month lows. they are looking at data over the weekend, now holding sentiments into today. of three quarters of a percent, as you can see this is one of the best performers. board,ot see it on the but there have been a lot of energy players under pressure. this is coming off fluctuation and crude oil coming back from the six-month highs. and we have energy stocks under pressure, but health care players and industrial stocks are looking good. philippines gladback on a winning streak, a by one third of a percent after a nine-month high during last week. and if you stocks we are looking
at today, the store and the bloomberg, talking about the h group ist -- h and looking at a stake in another firm. a little weaker on the market in china. up -- cwthares are shares are up it and we are looking at is all in tokyo -- and we're looking at a fall in tokyo credit morgan ailey today and australia that stanley today australia saying that the government controls the firm's that could be looking at a solid boost. this is looking good for the health care stocks. yvonne: thank you. breaking news, you can see on the bottom letter half of this isn -- of this grain, this -- on the screen, this is from the previous three months. economists were expecting an increase of about 6/10 of 1%.
they were looking at about 2.8% coming out of thailand. looking a little better for the first quarter. 3.2%n thailand going compared to a year ago. and a better number there in terms of the economic growth in thailand. we will take a look to see any reaction coming out of this. it is better than expected. 2/king at strength at about 10 of 8% credit china posting records -- of 1%. china posting records. move to looking at a take advantage of higher prices for steel output. we will go to martin in shanghai. really good to see you. we are looking at another record in steel output, wasn't the still production supposed to be falling this year? >> yes.
that is right. another record month, 2.3 million tons each day that the china steel industry is turning out. and if you go back to the beginning of the year, this was supposed to be a year of real difficulty and trouble. it was supposed to be restructuring for the steel industry and instead we have production back to record levels after the chinese government injected new credit into the economy infrastructure and they picked up in the property market. and it has gone into them pushing it to the max. yvonne: martin, is china basically producing too much again? is it oversupply? think that there is an argument to be made about that happening right now. there have been good fundamental reasons for the steelmakers to
start turning out more steel, especially in the last two months. you have seen profit margins for this deal returning to levels -- steel returning to the levels that we have not seen since the financial crisis. thishere is a concern over returning to the recession quite quickly. the danger is that they are turning out steel at the moment when demand is declining and in the second half we will have price control back again. yvonne: we are looking at does production numbers, was looks like overcapacity when it comes to steel. when it comes to these figures, what does it say about the chinese economy? think what it shows is how policy driven those things are at the moment. rebounding ineel
terms of credit, in the first half. it has gone to the traditional area of property and infrastructure and what it really shows is the difficulty that the economy will have moving away from those areas and getting away from the industry, such as coal, that have been under linchpins of until now. we will see how that plays out in the second half of the year. yvonne: ok. martin joining us from shanghai. meanwhile, looking at chinese data through production, this has on the opposite way, falling to a 40 month low -- 14 month low. so, we take a look at the data from over the weekend, showing the oil output is lighting. what is happening? is this a continuing trend? >> good morning. this date was set for this with opec maximizing production, so the world is awash in oil and we
felt as prizes ball to a 12 year low. as prices fall to a 12 year low. and i have begun to cut back on production. we thought earlier in the year, the president saying that they would close those who had no hope of a profit. they are forecasting a drop, the first fall in production in 17 years. what we saw over the weekend was my .6%, the biggest drop since 2011. so, as china is one of the biggest oil consumers in the world, they will have to rely on public health -- someplace else. yvonne: oil refineries are running at records. we saw that with some of china's players. how they make up for the different? >> the demand is still growing, particularly for gasoline. and he saw that with crude production pollack, the refineries were at a record high rate, so if they are going to
get oil, they will get it from overseas. so this glut is being eaten away and they will rely on imports, pulling it from russia and saudi arabia and west africa. that is a good that's expected to help with some of the glut we have seen. yvonne: so that is what we will see in the global market with the rebalancing and it will be a little bit better? >> right. was said last week that this production we have in the u.s., it will get a boost from the china ppoool. we have seen prices come back 70% since then and goldman sachs says that is rebalancing will happen after than expected. it will be around $50 a barrel for the second half. there are a lot of factors that go into this, but falling production in one of the world's largest consumers and and now having to increase the imports
will have an impact on the market and it will push up prices from here. yvonne: a lot of moving parts. so, checking out some of the stories we are following, sony will make camera sensors later this week. it's the first time since the earthquake hit last month. at the facility, they will resume operations on saturday. and they will release earnings for the current year, three days later. they have been making projections, so they could assess the effect of the quake. and looking to enter the film business, according to the news credit in an interview, the ceo said that nintendo is in talks with multiple production companies around the world and is aiming to complete its first movie in the first 2-3 years. reports did not indicate with the first film would be about, but it will target overseas
markets. and nintendo will invest proceeds in the seattle mariners on its own operations. reports from japan say that the prime minister will postpone a sales tax rise because of the financial impact of the earthquake. the news says that he will probably announce the decision later this month. and thee died government is preparing an extra budget to help with the quake relief. more now on a story that we broke at the top of the hour, sources telling bloomberg that a rival of uber could be considering a u.s. ipo next year. so, we have heard about this now, when it comes to these plans. >> the plan is to ipo as soon as next year. they have decided that it will be in the u.s. and they have not
retained bankers or decided on a specific timeline. but what this means is that it will come on the heels of apple investing $1 billion into the company, so bringing the total amount raised to about $3 billion and the valuation to 26 billionillion -- dollars. yvonne: what does this mean for uber? they talked about in ipo plan, but said they will hold out. >> this probably means that did theml raise ahead of come is that they do not target the same pool of investors at the same time. in terms of fundraising, part of the reason they have been so aggressive, as a preemptive move for investors not to invest in their competitor. it will place a huge amount of pressure on the competitors and also the fact that didi has an
alliance with lyft overseas, forming the alliance overseas as the all -- on all fronts. it means uber will have to of the game. yvonne: yes. thank you so much. now to a story about trying so hard to achieve so little, even after a record stimulus plan, the bank of japan and their target of 2% remains out of reach. other indicators suggest that the policy measures are running out of steam. it is a somber start. feel forve got to them. what more can the prime minister do? of expansioncord from a couple of years ago, it cut the negative interest rates. eventually the bank of japan will have to buy into the market and the question arose, what
more is there to buy? as what we are seeing. the preferred inflation metrics continuing to gain traction. these three are on the chart. you can go to this on the bloomberg and you can see his dark picture. eventually that essentially, you can see this falling into the inflationary territory at the start of the year. so we are going backwards every time we think is that forward. it is three steps back on inflation. the bank of japan refers to energy prices, the decline with onde, really weighing inflation. that is true to some that. -- to do something. it is also looking at oil. it seems that he flat at the moment -- it seems pretty flat at the moment.
and inflation is flopping, showing that investors are not hoping for any rapid inflation going forward. oil has been taking a look at the impact in terms of other micro indicators. take a look at the yen as well as the stocks. economicst brief driven rally, that is a thing of the past. we are really looking at divergent now with the stocks falling and the yen going up, one of the top performers this year, despite the intensity weaken it further and gain a competitive advantage with the exports. this is weighing on profits. and of course the negative interest rate would could go further into the negative. that is also weighing on the japanese financials. and finally, i want to show you another chart that shows you the start reality of the issue -- stark reality of the issue, the
exports are declining. weighing stronger yen on the bottom line of the exports, particularly carmakers and electronic makers. it also bank loans, we did see a spike in monday, that has not slowed. but the yield on private loans are starting to come off somewhat. so you can take a horse to water, but you cannot make them drink. we have seen this in japan. yvonne: markets not playing ball. coming up, looking at the latest disappointing data from china, hear from a chairman, next. ♪
people are being held after being deported. 45 taiwanese were deported on the same charges. the victims were mainlanders. they are working to get back the stolen money. and the incoming president of the philippines says that they must understand that china is in their territory and their presence is a legal. they spoke to the chinese ambassador today and said that they were not about the territorial claims. he also to the news conference that he will ask them to reinstate execution by hanging for criminal cases. in the world's biggest of the liner is making a journey from france to the english border, in southampton. it is 120,000 tons and can accommodate numerous passengers and crew.
it is 50 meters longer than the eiffel tower in height and it has been called a floating city with 20 restaurants. it is also the most expensive cruise ship ever built, costing around $1 billion. powered by 2400 journalists in 150 bureaus around the world, this is bloomberg news. yvonne: the world's largest money manager is holding a imposing in hong kong and bloomberg was an exclusive media partner. ryan says that disappointing data from china is feeling concern from investors and clients. >> we have to expect growth to slow, but i think if you look at the growth profile in china relative to the rest of the world, you still have growth rates well in excess of developed markets. so if you couple that with the agenda in the capital markets
opening up, you are still in a position where you will have great asset in the long-term. >> it is still very sticky. mrs. policy driven investment, which we really saw underpin the positive side of the growth in china over the weekend. the sales are still very weak, so where will the turnaround happen? >> it will take time. >> it has been a lot of time. >> you have a very big economy that was very manufactured -- manufacturing led, that will go to consumer led. and in japan, as well as china, you will have that transition and it will take years. and i think that everybody is looking toward, you can see the reassurance over the weekend, that will just take some time. >> thank you. againsts been railing
the policy, this overdependence on monetary policy, do you think that pboc is there? >> i think so. if you look at the announcement that came out. and i even think that they are more aware of achieving, not just the direction in their own country, but for the world market. it is comforting. we will be in a markup volatility over the next -- market of the volatility with the next quarter, so the impact that it will have in our home country it will have global ramifications and it is providing some sense of that volatility. >> but that volatility still persists and it will probably increase. black rock strategy this year, very much factoring into how you are looking at the region. >> no doubt. if you translate, why we still have optimism relative to the
volatility, in some respects on what we are focused to do, you will see new in investment solutions whether it is around these strategies, i think that they will continue to use investors who can more tactically make the decision in their portfolios. yvonne: that was ryan storck. we will have more from black rock over the coming days. do not miss our exclusive interview with the chairman, that is coming up on trending business to margaret -- tomorrow. coming up, a favorable exchange rate, how indonesia is helping those cash in from cleaning up. ♪
indonesia, producing about 800 tons of rubbish every day, most ending up in a landfill. but they are using the garbage to give people access to financial services. close as shee as ever gets to using a banking institution, she is withdrawing money from her account the trash bank. >> usually i have about 100-200,
now 66,000. the trash bank offers a way for the poorest people to save and get access to credit. the key currency is plentiful, it is literally trash. instead of throwing away rubbish , locals can take items like bottles and paper and packaging to a collection point, where it is weighed and given a monetary value. customers can open account, make deposits, and withdraw funds. almost like a regular bank. they can also borrow cash and pay back, trash. the bank manager says so far, nobody has default appeared >> from an economic -- defaulted. >> from an economic point of view, this is managed by the people and is for the people. are savers, and many of them are women, who will put away about $.15 a week, or borrow to hold the families over
while waiting for a paycheck. the local government collects the rubbish and take it for sorting at a location. it helps support the whole scheme by find the rubbish at certain prices, that means stability and a boost by selling the garbage for recycling. so a little less in the oven the landfill and trash can be turned into a cash and credit house. yvonne: that is it for us. and tuned for "asia edge" andy. ngie. ♪
♪ angie: it is the middle of the asian trading day. we are going to take a look a hong kong hard at work. [laughter] angie: some working crew at the victoria harbour, we are live in hong kong. this is "asia edge". ♪ top stories, japan leading asia back from a four-week low, but the government may delay the sales tax hike. planning andival ipo next year.
they are valued at $26 billion. doing so much to achieve so little, they have negative rates at the victim japan and the policies do not work. also coming up, cash for trash, the indonesian bank that is giving a new meaning to junk rated finance. i will tell you what we are talking about in a special report. and keeping an eye on the markets, it has been a volatile start to the week. shanghai stocks tracking at a two-month low after the disappointing numbers out of china over the weekend. now the asian market is up 4/10 of 1%. and there is a solid again in the japanese equities. also reports that the japanese government could delay the plans for the biotech increase and that