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tv   Trending Business  Bloomberg  May 19, 2016 9:00pm-10:01pm EDT

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♪ friday the 20th of may. i am rishaad salamat. this is "trending business". ♪ we will be live in taipei, sydney this hour. the g7 discusses the global economy. we will head over to the talks in japan. deal, andlion
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taiwan has its first female president. it may all come down to what she doesn't say in her inauguration speech. these are live images from the capital. oflet us know what you think our top stories. follow me on twitter @rishaadtv, and use #trendingbusiness. china markets underway in 30 minutes. let's take a look at what's going on out there. markets have turned positive in the last hour or so. we had a weaker start, but things are looking up. new zealand down by a quarter of 1%. we are processing the reaction to the fed saying june remains alive event.
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the s&p 500 wiping out its gains for 2016, falling the most in seven weeks. taiwan online. malaysia pretty flat. cpi numbers out of malaysia later on at noon hong kong time. gaining 2/10 of 1%. , fairly stable, trading at that 110 handle. up about a225 is 10th of 1% as well. the retracement in the u.s. dollar gives a boost to oil prices and commodities. taking a look at the movers of
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the day, it is about the energy names. part of this is bargain-hunting after steep falls. we're also seeing gains across some of the big miners. not the gold miners. we are seeing gains coming through from a number of big miners. rishaad: thanks. increasing prices to avoid weakening the yen. a warning that currency intervention won't help to boost growth. central bankers are in japan today. is the u.s. administration saying here? u.s. is ramping up
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the rhetoric when it comes to fx policy as the g7 leaders are meeting this afternoon. policy, this to fx is what the u.s. said overnight. and time when global growth trade flows are weaker than they should be, any movement from a country on its currency would send a signal that it is trying to boost its competitive advantage. ultimately this is going to not help the global growth recovery. we kicked off the event with a local tradition, the bashing of the stockade barrels, a traditional ritual in japan. , saying is isjoke a metaphor for japan bashing.
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more going to be about money laundering, tax evasion. we also heard from the bank of japan governor kuroda avoiding the fx policy issue altogether. bojid reiterate about the and said he will take action if he continues to see risk to that 2% inflation goal. those factors would include fx. take a listen. i have spoken to policy makers of other countries and they understand our negative rate policy. the positive affect is starting to be seen, and it will take some time for the effect to be obvious. we are ready to take any actions it necessary at any time. thene: we also heard from finance minister about this possible delay in the sales tax. he reiterated claims that would
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not happen and less there's going to be some type of crisis. thatnor kuroda maintaining negative interest rates are working and will have a positive impact on the economy. right, taiwan, the first female president will be sworn in later. we should get some images coming through here as well. this is something watch closely at home and abroad. there we go. it is the most important thing today. out in a speech one-chinabout this idea, isn't? >> absolutely. the 1992bout consensus, when china and taiwan agreed to understand that there is one china. they disagree on the definition of that. the interesting thing is that
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she has refused to acknowledge the 1992 consensus. she ises not mean that outwardly advocating independence, even though that is in the charter of her party. she has taken a softer tone on that in this campaign to be elected president. the past president, who was an office and subsequently went to jail, he was in office before the outgoing president. what is interesting about what she may say about the one-china concept. rishaad: beijing will be monitoring this closely. if they don't like it, are the repercussions? >> who holds all the cards here right now? is it china? or does taiwan have some negotiating room? it depends on how sharp her tone is on the one-china principle. china would like to continue the
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status quote. keeping the peace and not pushing the button. rishaad: right. there we go. the first female president of taiwan. thanks a lot for that. we will have a look at and merger and acquisition deal in the oil sector. that story and more. deal has shares surging in sydney after the producer agreed to buy inter-oil worth $2.2 billion. operations are focused on top in new guinea, planning to fund 60% of the takeover by selling ,ssets and sell them to total the biggest oil company in france. they say the deal will create a regional champion. wanting to expand
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their lng operation and pop in new guinea. the takeover will be completed in the third quarter of 2016. alibaba is determined to force office platforms, and it has the technology to help it do so. alibaba met the antique counterfeiting coalition after company suspended its membership. some say the company is not ack downough to cro on fakes. to arrest people and confiscate fake goods last year. has 440 8 million social comments a year, the same number of comments generated in one day globally on twitter. it byport found most of government agency workers, but found no evidence that they were paid for each individual post, contrary to popular perception.
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they are known as the $.50 party because they are believed to be paid for every social media post. the comments are said to be designed to distract chinese citizens from bad news and political debate. rishaad: on a website, australia taxing foreigners buying homes there. do have a look at that. the big names behind the push to turn sydney into silicon valley. the low-inflation challenge. how the austrian economy is coping with the collapse and commodities. you're watching "trending business". ♪
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rishaad: we are back with "trending business".
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currency meddling will not help global growth. if thesk our next guest bank of japan should heed washington's advice. research,d of market thank you for coming in. let's start off with the yen. there's nothing on the table to discuss. what is your view on this? >> we have become less certain that the bank of japan will do aggressive action. they chose not to do aggressive action in april. the economic case has become quite week. it is not clear the yen is particularly strong. when we run longer-term valuations, purchasing power parity models -- devalue atu can't the end of the day, can you? >> the road to prosperity is not
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paid by a weak currency. talking of strength, we've seen the dollar on a tear of late. what is your view of that? has it all been baked in, this possible gin rate hike? -- possible june rate hike? a look, i think we are on path of general dollar strength. it is the start economy in the subdued world. the fed now being back on the agenda, whether it is june or july, i think our forecast is july. brexit is probably good reason the pass through june. only a way of pricing that, but not in total. so, the fed still has room to surprise. they couldody's said
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see two rate hikes at most out of the fed. >> i think two is a reasonable number to think about. the market doesn't think that quite yet. as i said, there is room for the fed to surprise. rishaad: staying with central banks and moving to one closer to your heart, the reserve tank in australia. throw out any prospect of an interest rate cut for the next meeting? >> the chance of an interest rate cut was always quite low. australia, the rba cut had little to do with the economy. the economy is growing quite well. unemployment has generally been declining. rishaad: there's no inflation. that's what gave them that wiggle room. >> what's the path to inflation? they always would have wanted another number.
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we only get quarterly inflation releases in australia. our forecast is they probably won't cut again. ifhaad: indeed, why cut it you say growth is ok and there is no inflation? there's no real urgency. >> that's the point. i'll central banks are challenged by low-inflation. the rba has always had a very 3%, ande target, 2% to has time for inflation to move back. it's not just a case because inflation is low that i'm mu st cut rates. rishaad: is there going to be a change at the rba? stevens, remarkable run he has had.
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would we know about the new guy coming in? >> the central bank governors judge themselves on 2% to 3%. he has a tough challenge. i think there is continuity with the rba. they are one of the few central with the most internal people. i think it is a real strength of an institution that you do that. him to be similar to stevens and the way they think about monetary policy. , aread: the aussie dollar they comfortable with that? he gets high 70's, the heat is on, isn't it? once to bentral bank the chief currency at the moment. where the think about
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aussie dollar is in the context of commodities. we doabout now is when the evaluations, and if you look at the general performance of the economy, which has done remarkably well in the face of the steep declining commodities, it might decline of that as the year goes by. rishaad: great have you on the program. stop by again. >> pleasure. >> now to the stories making headlines around the world. the mystery of the egyptair flight has deepened with claims that debris had been found quickly denied. cairo said the material founder the greek islands came from the plane, but athens says that is not true. now the egyptair flight left paris on the same route as the missing plane. the flight wasay at cruising altitude, but made a series of sudden turns before descending rapidly. 66 passengers and crew on board.
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the pilots in no distress signal. china's number three has ended his trip to hong kong, saying the city's future engines on economic success -- hinges on economic success. repeatedly he stressed the economy is what sets it apart. his remarks highlight the gap between china's priorities and the growing sense of unease about income inequality amongst hong kong seven main people. three-time masters champion phil mickelson is to return profits he made from trading on inside information in 2012. he picked up almost a million dollars by acting on a tip from a gambler. wrongdoing,cused of but the money can be recovered. phil mickelson says he feels the indicated and does not want to benefit from a transaction deemed questionable. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. rishaad: now japan has had
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negative interest rates for three months. we are having a look at how the big banks are faring, some key charts in the bloomberg. you're watching "trending business". ♪
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rishaad: you are back with me. months after japan adopted negative interest rates, we are seeing what impact it is having. apparently it does not look that pretty. make a banks plunging as they forecast profits and bad debts on the up. seeinge: the megabanks their loans slow and margins narrowing and bad debts rising. this chart shows you the provision set aside for bad loans from japan's three biggest lenders.
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mitsubishi u.s. j, represented blue, and yellow. they have started to increase their bad debt provisions, because the at musg banks have expanded loans overseas because there seeing profitability declined from domestic lending. overseas,ng lending they are susceptible to world economic trends, and that's why they had to increase the provisions for nonperforming assets. if we have a look at this chart on the bloomberg, you can see that japanese banks have nowhere to go. this goes back 16 years. increase,e this huge particularly in the month of april, where we saw bank deposits exceeding loans by a record ¥217.2 trillion.
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under $2 trillion an equivalent to the economic output of india, so this chart shows is that japan's problem is a lack of demand for credit rather than a reluctance to supply it. not surprisingly, this is having an impact on the overall banking profits. they have been warning that they are expecting to see the lowest combined profit in five years. that is sending investors to the hills. this is a chart showing the topix banking index over the last 12 months. it has fallen by 29%. it is the worst performing index downe overall topix index, 29 percent, and we are seeing more speculation that the boj will drag rates further below zero. warning negative rates have increased anxiety and
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could weaken further the financial institutions seeing shareprice come under pressure. so, not a great outlook there for the overall banking sector in japan. rishaad: right, let's have a look at some stories making headlines. south korea could see its biggest ever ipo. the unit is planning a share sale that could raise $4.8 billion. it would value the company at a must $14 billion. the sale would be the world's biggest offering this year. is pulling its old navy line of clothing out of japan, saying it will help to focus on china and north america. disappointing results after turnaround plan
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failed to excite investors. it is pointing to a slump in clothing sales. trader is suing for more than he lost, claiming he was unfairly dismissed in 2008. he was jailed for causing a record trading loss of $5.5 billion. he is seeking six point $3 billion in compensation, saying the bank had no grounds for sacking him for gross misconduct. they dismissed the claim as "preposterous and baseless." bp raise $300 million from the sale of part of its stake in capital india, raising $5 billion from asset sales this year, the company saying it sold 11.5% of the lubricant maker. discount toa 5.3% the closing prin mumbai wednesday. bp will retain a 59% and castrol india following that sale.
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up next, the search continues for any sign of me sing -- of missing egyptair flight. we hear from a board member when "trending business" continues. ♪
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our top a look at stories, g7 finance ministers meeting in japan today with the u.s. warning that currency intervention won't help global growth. the obama administration is pressuring japan to avoid weakening the yen. washington saying the real problem with the world economy is waning demand. gaining after an agreement
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with oil search in a $2.2 billion takeover. taiwan's first female president has taken the oath of office in taipei. she now controls the presidency and the parliament. that's the first time that has happened in 30 years. speech will ben listen closely to in beijing about what she does or does not say about relations. straight to the open in hong kong. we are seeing a mixed picture when it comes to asia markets. it has been volatile. we did start was a marginal gains, and a number of markets giving the gains back. nikkei 225 pretty flat at the moment. , one of the leading performers.
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, taiwanese stocks steady ahead of the election. forre watching comments relationships with china and what impact that might have on markets as well as the economic ties between the two. shanghai opening down by .5%. we are reaching a critical psychological point for shanghai. the kospi is flat at the moment. malaysia flat ahead of cpi numbers at noon today. back to the chinese markets, because we have seen mainland markets doing not a lot all may. two weeks where it has been flat , holding at that 2800 level. a lot of analysts saying this on account of late stage national buying, because
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we have seen losses intraday and then paring back. 2800.e fallen below analysts are are saying further capitulation could be to come. that is a market we are watching, always interesting. that.d: thanks a lot for right, we take you to what's going on in taipei. this is the scene at the moment as the inauguration ceremony is taking place. it is taiwan's first female president. it's being very closely watched abroad rather than at home. we have the ceremony taking place, the introductions being made, and it's really going to thelosely watched because president will make it this major speech. the most important thing may what the -- may be what she does
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not say. our taipei over to bureau and our bureau chief there. this is very important, the speech. why is it so important? china will be listening .losely to the inaugural speech what they are listening for is what she says on the one-china principle. this is sometimes referred to as the 1992 consensus. the party that she leads has been historically pro-independent. beenhave from the founding seeking taiwanese statehood. a have been downplaying that in recent years, but china is seemingly suspicious of her intentions, and so they want her to say explicitly that china and taiwan belong to the same country. what happens if china doesn't like this speech? well, that's a very real
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possibility, because all the local papers today this morning predicting that she is not going to say what china wants to hear. she is supported by over 70% of the taiwanese public, who oppose this idea that china and taiwan are part of one china. it is very likely that china is not going to like what they don't here. a military parade starting as we speak. the stock markets there, we party scene big outflows this quarter. sorry to bring you back to business, but what is the story there with the iphone? end ofiphone at the april, tim cook said the smartphone market is no longer growing it they've had their first quarter-on-quarter sales decline in over 10 years, so that will weigh on taiwan's corporate profits for one thing. exporthe entirety of the
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sector, which makes up two thirds of gdp here, so she is facing some dire economic conditions. she has three quarters of negative growth, so it's going to be a really important first year for her. rishaad: thanks very much indeed. right, quick look at what's at this ceremony taking place, this dance performance taking place ahead of a military parade. we have the first female president of taiwan being sworn in as the new president. she let the democratic progressive party to a landslide win in elections in january. they traditionally lend towards independence, and it's led to a cooling of relations down to this one-china principle with the 1992 consensus, where they
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reaffirmed that there was one china. we will leave those pictures and taiwan and get you to another one of our top stories. a search under way in the mediterranean, no news about missing egyptair plane, claims and denials about aircraft to bree, but still -- aircraft to bree, but still nothing definite. you would think there would be something, some wreckage, some debris showing up by now. it's not as though this is the south indian ocean. well, it seems like it's a bit of déjà vu all over again. we have an airplane lawson were not exactly sure where it is, although this one is a lot more confined in the area. we still can't find any debris from it. amazing. thered: the other thing,
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are so many people coming up with theories about this already. you have a gut feeling as to what happened? don't have really enough information to have an intelligent guess. data, and i radar don't know how reliable that data is, and everybody seems to be putting 100% confidence in it , including me earlier today. i was talking as if that were rocksolid information. but it really isn't. we don't have enough information to make a qualified judgment. all we know for sure is that this airplane came down quickly, and it's a very reliable airplane, so that normally does not happen, and it calls into question some sort of activity by human beings to make that happen. well, there are certain
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parts of this which don't seem to sit well with an explosive device, because that would have scattered a lot of debris over a large area. it was the movement of the flight, it's rapid dissent, it's turns and change of direction, two changes of direction, that's causing a lot of confusion, isn't it? rishaad: yes, it is. and let's not forget that in the case of the malaysia flight 370 we had radar telling us that this airplane climbed to 40,000 feet, then went back down to below 20,000 feet, then came back up again, all inside of a minute or two. and after analysis, it was deemed that that was not what happened. of this data none is 100% reliable. we need a little bit more time. what we really need to do is
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find those recorders. that would unlock everything, wouldn't it? if we could actually recover those, but nothing could be rolled in or out, and that takes me to what happened in 1999, egyptair 990 flying out of john f. kennedy to cairo, driven into the sea by the pilot then just south of nantucket, so nothing can be rolled out, can it? >> know, we should keep an open mind. be inigators are going to the investigative process driven by fax, and we just him have any facts yet it it may be that we only get the boxes, and if we do get the boxes, i think this one will be sold by the boxes. it wewas an explosion, will hear the beginnings of that on the voice recorder, and if it is some other kind of breakup,
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we will catch it on the data recorder. there are over a thousand parameters on this particular airplane, some more than enough data to solve any kind of systems or structural failure. rishaad: fundamentally what you said at the beginning was that planes like the 737 and this airbus a320 have amazing safety records given how many of them are flying. it's unbelievable how safety airplane is. a very reliable platform. they have long since outgrown any of the initial problems, and they -- it is just bulletproof. they keep on going. this is really amazing how reliable it is. rishaad: great talking to you. thank you for joining us. former ntsb board member. a quick look at some other stories. we will keep you updated with any new information regarding the egyptair flight.
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hsbc announcing that it will close half of its branches in india and rely more on digital banking. the closure will affect less than 10% of its retail customer base in india. closing businesses and a biz to improve earnings. plunging the most in seven years .bout skepticism the size of the takeover has not been disclosed by either company. investors are concerned that it would need to take on too much debt to complete the deal. a market value of $45 billion. this would be the biggest ever takeover by a german company of a foreign one. let's have a look at australia, giving its fiscal update later on as part of the july second election. it should give us a snapshot of where the economy is going. the budget was only a couple of weeks ago, what are we going to
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learn from this update? >> there is an important difference between this update and the budget. the budget is a political document prepared by the government to this is prepared by treasury, so it is up -- it is a more compassionate look at the economy. neither the treasurer nor the prime minister will have any idea of what is contained within, so we will get to see what treasury thinks about where gdp growth is heading, any impacts of the budget on the books, most recently for example the deferral of that fact pack attacks, which would have raised $500 million in revenue that the government will now's not see. is the impact in iron ore prices going ahead?
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there's very little downside down the line when it comes to iron ore. >> yeah, that is an important point read the budget released at the start of this month is based on an iron ore price of $55 per ton, which seems a little optimistic. so we will see if the budget update has any more realistic figures on where the price of iron ore is and where it might be headed next. thanks very much indeed. joining us there from sydney. can sydney become australia's silicon valley? our next guest certainly think so. he has some high-profile supporters as well. ♪
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>> welcome back. it is 9:45 a.m. in hong kong, and these are the stories making headlines. the indian prime minister has had a political boost with his chief rival defeated. lost.ngress party has dominated since 1947. votersty accepts the decision with humility and will work harder to regain trust. rain in sri lanka is hindering the search for hundreds of people missing after landslides buried at least three villages. the downfall triggered new mudslides, causing rescuers to suspend operations. the red cross says at least 220 families are missing and 18 bodies recovered. at least 43 people have died from floods, falling trees,
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lightning strikes, and landslide since torrential rain hit on sunday. senators in the philippines may recommend changes to the law after ending their investigation into the $81 million bangladesh bank heist. manila central-bank has also finished an inquiry and will report soon. have come under scrutiny after one of the biggest cyber thefts in history. cold,ney trail has gone apart from $15 million handed over by a junket operator. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. the best and brightest techstralia's startup and scene are joining forces to turn sydney into australia's silicon valley and become a global tech leader. they want to mentor and grow promising tech companies. let's get more on its chief initiatives from sydney.
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first of all, what is the issue here? we have sydney going down the tables. that is the problem, isn't it? you have to stop it. why is this happening? .> we look at the rankings we used to be 12 and were now back to 16. that wasn't good enough for me. a group of entrepreneurs and i got together and focused on launching an initiative to address that. our goal is to be in the top 10 by 2023. rishaad: the other part is, what has gone wrong? >> what's gone wrong? it is the fact that other countries are investing more heavily than we are at the moment. we stayed comfortable in the mining boom and have not been investing in new technologies. of our gdp is about to be disrupted by these high-growth
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technology companies, so we have toopportunity as a country stand up and take advantage of this amazing opportunity. i've had quite a few people on this program who have started up companies in australia, some brilliant ideas. the problem is that were not getting enough of them, right? -- the thingsome about austrian companies is that it has been a difficult environment to grow a company. the last 10 years, starting a company has been like growing up plant in a dark covered, very difficult. the companies that survive evil to be much more resilient. you seen some amazing companies come out. they've all become billion-dollar businesses or close to that level with very little investment and venture capital.
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industry isan tech the best in the world. rishaad: well, it has to get support, hasn't it? going tothat support come from, private equity, banks, what is the deal? initiative is about identifying the issues of the industry. way toking is the best grow an ecosystem is grow the companies in the ecosystem. theis best to do that if entrepreneurs who have done it before, so we have a team of experienced entrepreneurs who have done that. our focus is identifying problems and issues in companies that are stopping them to grow. number one is acquisition of talent, access to experts who might be a result problems in ther business, and third is identity issue. because there are so many great companies doing similar things,
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you learn from them and accelerate all the other issues much faster. you can find people faster and finder problems faster. thingnsity issue is a that we could address specifically in sydney at the moment, having one location that all the companies from the would beto the biggest the one biggest thing we could do to accelerate growth in this industry. in terms of the people involved, when we have identified those problems, it is about some of those problems being solved by more money and finance, so investors. us in theold by industry getting her act together and communicating better what it's like to work in this country. i believe sydney has a unique positioning in the world, particularly when we improve the ecosystem. we could be number one in the world.
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startupant to start a and a thriving ecosystem, sydney will be the place to do that when we turn sydney into one of the top 10 ecosystems in the world. it is a pretty exciting opportunity and great time to be doing what we are doing. rishaad: great to talk to you. have a good one. taiwan's president has the last laugh on internet trolls. the farewell video has gone viral. we will have a look at why after this. ♪
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hour tsaiight, this ing-wen greeting supporters. the former president, ma ad a message for
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supporters that has gone viral. over 6.5 million views. >> that's right. -- officialsopular aren't known for being particularly humorous. one took some of the people and tie one by surprise. it is a humorous video that makes fun of himself. he is making fun of the popular comment -- this is about his nickname, deer antlers. gripreferring to his death when people shake his hand. generally people have been amused by this video making fun of himself, over 6.7 million views. his facebook page or
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thanking him and praising him for being a great president, bidding him farewell. comment from a person who appears from hong kong saying that even though ese people criticize you, you are already great. taiwan, you are blessed. this is a translation from the mandarin. generally, this is a public forum. beenneral, this video has sort of a cheery ending for him on the way out. rishaad: interesting. anyway, thank you very much indeed. right, going to take a break. ,e will be live in sydney
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waiting for the release of an update on the health of the australian economy. howill be talking to anz iron ore could weigh on the elections. this is "trending business". we return after the short rake. ♪
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♪ announcer: from our studios in new york city, this is "charlie rose." charlie: rose." anthony mackie is here. he takes on the role of martin looter king junior along with bryan cranston in the film "all the way." the "hollywood reporter" calls the film a fast-moving portrait s, mackies, -- write plays king with authority and soul. here is the trailer for "all the way." [video clip]


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