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tv   Charlie Rose  Bloomberg  May 30, 2016 7:00pm-8:01pm EDT

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♪ angie: the big short is back in china in the last time that's were so high, the market turned into a $5 trillion row. boolean priceces falling below 1200, losing $100 in a month. full steam ahead, airing daily sees no signs of a slowdown in india. up, i'm angiest lau coming to you live from hong kong.
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breaking news from south korea, industrial production falling 1.3% in april it estimates were for 0.3%. industrial productions down 2.8% for the year. more than expected following the 1.5 percent in april. we will see how that impacts markets at the open. let's check in on the asia-pacific markets. to new zealand we go, climbing 1/5 of 1% higher. 66 u.s. cents. u.s. stocks were close on monday for memorial day. we are also counted on to the opening in other asia-pacific countries. australia futures pointing to a flat the australian dollar is at $.71 u.s.
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japan pointing to a lower open this morning as we see a slightly stronger yen in play. jobless figures are due out later this hour. continues to be dominated by the prospect of the u.s. interest rate hike, which could come as soon as june. emerging-market currencies on track for the worst month since august. gold falling for the ninth straight day, longest losing run in one year. we will have a market moving him, today, stay tuned for he will talk oil ahead of the opec meeting.
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chinese equities are once again in the crosshairs of short-sellers. they -- mainland stocks have searched. we have heidi here with the story. here we go again. reporter: it is certainly looking that way. remember, it is not so simple given that authorities have cracked down on shortselling. short interest is what you are looking at now. we are tracking domestic chinese stocks. all year.t level of the last time we saw this level of bearishness was may and june last year. .hat proved to be well-founded what is driving the growing as hesitancy?owing
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volatility is receded. he fancied those swings are not nearly as bad as they were six months ago. in fact, the shanghai composite has been trading sideways all month. --t people say that is head ahead of next month's decision. in the meantime this is what you are also getting. take a look at the yuan. thesen get all that charts online. goldman saying the yuan has been in weakness against the dollar and that is coming to an end. in may,point, down 1.6% the worst since its august valuation. that will put across to a
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five-year low. all of this will be exacerbated .y a federal rate hike that is why we have seen the -- five-year lows. says it is piling up that's when it comes to chinese stocks in anticipation of that. investors -- investors are hedging up. financial holdings say that these investors are betting on steeper declines as the yuan comes down. shanghai is down 21%. those companies are still looking overvalued when you look at their earnings. the focus on the yuan, we had some insight into how that -- reporter: it is interesting. this is according to a chinese
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civic. at aes have authority revealed that each day 14 contributors take into account the overland movement in the basket i was talking about earlier. and then they add to that the dynamics of supply and demand. these contributors are toentially market-makers shakeout market manipulation, they can't read of the highest and lowest quotes to come up with this. the pboc has increased stability . you can see is some of that in the chart here with the pboc has been following the stable dollar. analysts have not been so convinced. essentially, the yuan fix is to a black box, still completely mysterious. the royal bank of canada says they have stopped caring about the fix in august.
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volatility could come when the fed actually does move. this mechanism needs to be clearer for investors. another milestone coming today for chinese stocks listed in the u.s. 13 will be added to the msci indices. how much of a catalyst will this be? this is what happened six months ago. half of their flea flow was added. now the full free flow has been added. it should be a catalyst it broadens the investor pays into chinese companies also, etf and blackrock added their positions over so avr's by 500% six months ago.
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this is a good thing. it is interesting to look at stocks since then. in the beginning of the year, we had a dip in chinese sentiment on the economy. line, itt the orange is obviously outperformed the shanghai composite for the last six months. still, the msci china index, which includes 100 53 stocks, still down about 8% over the last six months. did perform a than the broader index. to 5.6%, but just still, down. it wasn't such a huge catalyst after all. angie: how much of a catalyst is it going to be? reporter: exactly. we have come through the rough patch of it. from theng up a quote
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chief executive of finance investment projects. bes person obviously would looking at investing in this stock passively. he was investors are giving them a low valuation because of the china risk. -- that the msci inclusion includes them, hopefully more global investors will be able to buy them as part of their mandate. as of tomorrow, the msci might include domestic a shares. those include restricting the trading halts that we saw at the beginning of the year and also in february they added more incentive for foreign funding. angie: checking other headlines and corporate china has had a narrow escape with local bond sales. he won bond sales with the lowest and 2014 with total
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issuance exceeding maturity by $957 million. rising defaults are making it harder for companies to 400 $86 million of debt maturing for the rest of the year. investmentan state fund has paid nearly $35 million on its islamic debt. to payments were previously missed amid a dispute with an abu dhabi investment firm. the company is being investigated around the world for alleged money-laundering. denied anysistently wrongdoing. india's finance minister says his country is back on track to compete despite uncertainty in the global economy. speaking exclusively to bloomberg, he says the luby's performance is not a sign that investors have lost confidence. i do not think that would be
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beeny accurate analysis until august last year, the ruby had almost kept pace with the dollar itself. it is only august last year that there was a lot of instability in the chinese currency that we were also impacted. since then after the initial -- been reasonably bound. the strength of the rupee depends on the strength of the indian economy and how much foreign investment we are able to get into the country itself, which has been reasonably large. therefore the reserve bank has been watching the situation and has been maintaining -- we have to maintain a balance between a reasonable strong rupee and a realistic rupee in which we can continue in the current
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environment, with mitch rick majerus global trade is not exactly doing extremely well anywhere in the world. rishaad: yes. you bring up the reserve bank people haven't confidence in your government and the r.b.i. working together. tell me something, how is your relationship with roche on any rajan>ge on -- ? >> these are not areas where we comment in the media. we have always regarded the r.b.i. as a very important institution in the r.b.i. and the government have a level of dialogue. we continue to discuss the situation and decide areas which fall within our respective jurisdictions could i think the government and the reserve bank has any issues such with each other.
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we have been working quite closely over the last two years. we had the monetary policy agreement last year. we implemented some major hopefullyis year and by the end of the year, the monetary policy committee itself -- will come into effect. coming up next, the fed factor, we will look at my golden years to be losing its appeal as a safe haven. will be live from sydney, next. ♪
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>> canada's biggest energy company has restarted oil sands operation new the fire-ravaged town of fort mcmurray. all data -- alberta lifted
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evacuation orders as firefighters to the advantage of better weather. suncor's 4000 employees are back with a number to almost double. wildfires earlier this month forced around 80,000 people to leave for mcmurray. disney says it may take legal action against china's new theme park after snow white and captain america look-alikes worsen at the opening. bloomberg updated number present the company. shanghai disney will open in two weeks. it is said that disney is one tiger is no match for his [indiscernible] hong kong democracy activists jailed onby police -- charges relating to the confrontation. he was given a five weeks -- 2014 incident at the height of
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protests in this eight. local tv filled him in handcuffs being punched and kicked. go on this week beauty was released on bail after filing an appeal. powered by over 2400 journalists, this is bloomberg news. angie: let's check in on how faring, goldre falling for a ninth day. size at the u.s. recognized may be imminent. robert is joining me from sydney. i want to talk about india. their finance ministers that india's economy remains on track and yet, we see evidence of capital flight from emerging markets including india. yes.: angie: go ahead. go ahead, robert.
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guest: sorry. are seeingent, we evidence of a stronger u.s. dollar across asia. one thing to watch is the dollar/china. italy's for the moment, we are not seeing any signs of capital flights. i do expect over the coming months as the fed moves toward a gradual and cautions -- that janet yellen talked about -- then we will begin to see some flight. of capital we have to watch levels fairly closely. the other thing that is going on as we are seeing soft global trade and the momentum that is something that may undermine confidence in a while and laced for the moment there is no sense of capital flight technically raises watch how the fed rates and what sort of impact that has in asian markets because certainly the risk is that we are not correctly pricing rates in the u.s. in the short-term.
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we cannot compare every asian nation against each other like apples and oranges but what do you think it has exposed more in terms of which nation is exposed most to potential capital flight? look, to be honest, i think there are a couple i would watch closely. some of the higher tech -- we are seeing signs of weakness in the tech cycle accident in taiwan and korea. we're also watching for impact in terms of their recent earthquake in japan in terms of how that potentially impacts global tech markets it. watching those higher yields in indonesia, watching those exposed to the tech sector, that for me is the potential market at risk of the next couple months. angie: we also seeing investors
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pared their bets on gold. where do you see gold going? important0 is an level. i have been surprised over the last couple of months that we have spent much time north of that. , janetshort-term yellen's speaking next week so it is by no means certain that the fed will pull the trigger in june. we recently shifted our forecast from june to september. june and july are important months. we will spend some time seesawing on either side until we get that data over the next week. angie: what about oil? look, we have been calling oil higher in the short term. i have been expecting a test of
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$50. beyond that, crude will struggle. as you mentioned, it looks like the canadian production should start to pick up in coming sessions. i am expecting to see a supply response at some point. i would not be surprised to see the u.s. begin to turn around and start to push higher and speculative positioning -- that market has been carrying the position for a number of months. those factors should continue to cap it in the 50's. who reallyanything from opec this week? it is difficult to see saudi giving much. iran is not going to step back either. opec -- i am not sure he will be there. we should be in the early 50's. angie: thank you so much. --ing up, to counter looks
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takata rose up bankruptcy and looks for a buyer. ♪
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angie: takata is said to have ruled out bankruptcy. the company is seeking buyers to take a controlling stake instead to inject funding. let's examine this with our auto editor in tokyo. what is their top priority here? they recognize their responsibility is first and foremost to supply replacement airbags to clean up the mess they have caused with these recalls. a big role that being played by their competitors. they have replacement airbags using inflator is from companies like trw here in japan, but
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takata is still supplying replacement kits. that is an important process for them to stick to. it is something the regulators , they cannot along skirt that responsibility. regardless of what happens with takata, they must do that going forward. they want to continue to protect their business of airbags, seatbelts, and are looking to that arecore assets not core so that they can raise funding to get through this. angie: how far along his takata in finding a by area code -- in finding a buyer? guest: we know that the company has hired the leader for the process.
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foundm is to have a buyer by the fall. the company is open to a consortium of investors in addition to just finding a single sponsor. for somebody to come in and provide what the funding they are going to need to get this. this is going to be a long process that will involve a lot of negotiation with the automakers in terms of how much takata will foot the bill and this is going to be a lengthy process for any sponsor who is going to come in, assuming that they are able to find a sponsor to come in and provide an investment. angie: thank you for that. hong kong hosting the second annual rise conference today highlighting the start of seen in asia. aegon man is at the event for -- vonne, what are we expecting?
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yvonne: exciting startups are here ready to share their stories. we are coming into the conference had a tough time in the start of seen. the days of the easy money are over. it is harder to get that financing. it is harder to get that coveted billion-dollar unicorn batch. we have a great lineup. ofking things off is the ceo freelancer -- kind of like the ebay for jobs. they are a crowdsourcing marketplace. he will speak to us about the funding process and the tech sector in australia. morgan, hongnce kong's first full-service incubator. we will talk about hong kong as a startup hub.
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the founder of star investor. much more coming up, stay with us. ♪
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♪ --ie: it is a: 30 in tokyo 8:30 in tokyo. we are 30 minutes away from open. you are watching "first up." rates, all of the details. , 3.2%, inbers are out line with expectations. also the job to applicant ratio is 1.34. for this the forecast month was basically in the same line of march, effectively little change.
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no change in jobless rate. this is for japan. it is a tight labor market. unemployment rate has been approaching what the boj estimates were. a low unemployment rate should bring higher wages and bring inflation. of two once their target 0% -- 2 it is not necessarily translate into higher wages. new data shows the positive of -- positive impact of near full employment has not have the same impact. a look at household spending, overall for the month of april, down 0.4% against expectations it would be down 1.3%. not as bad as expected, but still it is weak.
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that is due to a lack of rise in wages. it might be due to the earthquake. still, a lack of confidence in consumers. angie: david is standing by. any reaction? what do you have? david: it is quite early. yen -- we were trading at about 111 in the last three or four hours. the u.s. markets were closed as well as the u.k. overnight. close tog said, we are a one-month low for dollar yen. just to add to what she said. some people might have to rethink the concept of full employment. especially when you look at a market like japan. we obviously know there is a problem with an aging demographic. when it comes to consumers, a lot of these are older
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consumers. they have to dig into savings. for the mo part -- for the most part, it is negative. can we get futures? last i checked we were up 105 point. that is not enough to lift us above. there we go. .60. not enough to lift the index. if it does open, they could look at slight losses. futures are mixed across asia. this is how asia looked yesterday. flat. most stocks were up. the heavyweights are limiting these gains. one market just opened, new zealand. .20.s up about at futures, if you want a lead, perhaps look at european stock, up .10. i want to mention ego data --
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ego data -- eco data. out at gdp numbers come about 8:00 p.m.. angie. angie: thank you. let's look at what else we are following. here is heidi. heidi: in the thick of earning season in india. it is a mixed bag. put rover is helping to another company in the fast lane. the company says it is cautiously optimistic about global growth. deliveries in china pickup and new models are driving in the u.s.. the takata airbag scandal might affect 100,000 cars. they have put aside when hundred million dollars for repairs. -- $100 million for repairs.
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incomeourth-quarter net came in at about 87 million dollars, 17% below what analyst were expecting. related -- results were released after they completed the acquisition of the italian designer of cars. by -- inrged in mom mumbai. the company also appointed deputy managing director leave the company for a five-year term from august 1. trillion. rose to $53 -- $53 million. india's power is producers saw a drop in earnings. profit fell almost 8%. still, it beat estimates. the company accounts for almost 16% of india's generation capability. the plan to travel that by 2032. the shares are down nearly 2%
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year to date. those are some of the stories making headlines. finance minister says he has every confidence in thereforms proposed by government. speaking exclusively to bloomberg television, he said the overhaul of the economy has changed the way investors regard india. he also stressed more strange is -- more changes are on the way. >> if you look at the performance of the government over the last two years, i think we took over at a stage where the rest of the world had almost started disregarding india. we went off the radar. the government started on a clean slate with an image that india has a failed power -- failed policy paralysis. thanks to the election, decision-making became easier. over the last two years we have consistently moved in one
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direction, step after step. steps we been many have taken opening up markets, easing dismisses, rationalizing taxation. having a nondiscriminatory system of resource allocation. making entries into businesses easier. making exits out of business easier. where wee have reached have crossed all of those barriers one after the other. i have a little bit of the unfinished agenda of the reform process which is still pending. i think the -- we are still in the phase of bringing out the corporate tax down from 30% to twice 5% while phasing out -- 225% while phasing out exceptions. this will be done in the next few years. we don't want to take a revenue shock. we have a major indirect tax reform, which i hope to clear soon. the goods and services tax.
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we have some changes to the company law in the pipeline. the health of the banking system -- we have started a whole program in more than one way of repairing that situation. i think once that is done there are three big priorities. mainly spending a lot on infrastructure. bridging as far as possible the infrastructure deficit that exists in india. secondly, a lot of expenditure will be diverted to the rural areas in the next few years, considering the distress. thirdly, i think the government passed -- has taken several steps creating a larger framework for social security. these are the initial steps we have taken. i think we intend to go on that path. , it has to question do with entering and exiting as
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foreign investors. as an example, apple, 30% of their phones should be made and did justly -- and did in india if they are allowed to open stores there. do you agree with that? does that raise the barrier high for a company like that? >> unless it has changed, this is a pre-existing policy that already exist for the last several years. the policy has been that if you have these single branch stores you must have some local sourcing. the rationale behind -- behind this is that every person who looks at the indian market must also invest in the direction of creating employment in india. logically, it is a national policy. stray product, it is odd but the reaction is if
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you're looking to invest and capture 1/6 of the world's population because of a large .arket and a large middle class please help us in creating some job opportunities in those countries as far as manufacturing is concerned. the policyionale of -- unless changed, that policy continues to exist. >> when you change it, yes or no? >> no. i cannot make that comment on television. they have presented it to us. we will examine it. there are cases where there is high technology involved. we will always be open to looking at these areas. i can only tell you that the original policy, considering the constraints of the indian economy and the need for employment had a rationale of
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employment creation. ministerdian finance speaking to my colleague. up, live at the conference in hong kong to talk about new trends in startups. we are joined by the founder of the biggest freelancing marketplace. coming up next on "first up." ♪ ♪ ♪
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angie: 7:43 here in hong kong. stories making headlines around the world. a slump in gambling is continuing to hurt the cow -- macaui. gdp fell more than 13% from january to march. they have been shifting away from gaming with casino operators targeting tourist with different resorts. moody has cut their credit rating on concerns growth would be a little. -- would be volatile.
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largest wind turbine makers returned to full-year profits for the first time since 2009. profit came in at $72 million with revenue jumping nearly 70% after the company refinanced the biggest portion of their foreign-currency debt. they make more than 15 gigawatts of wind globally of which more than half are in india. opposition lawmakers in cambodia have been in the -- been allowed to petition the king about government intimidation. police printed protesters from marching to the palace. critics say the prime minister is stepping up attacks on the opposition ahead of elections in 2018. local media has been ordered to use his full official title. lord prime minister and supreme commander.
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journalistsver 2400 in 150 bureaus around the world this is bloomberg news. the startup conference is getting underway in hong kong. yvonne man is there with our next guest who runs the world's largest freelancing site with over 18 million users. we're talking about startups funding -- startup funding. yvonne: we are talking about the difficult time we do see here at the environment. must -- much harder to get financing. joining me to talk about this is ceo matt berrie. thank you for joining us. let's talk about the broader markets. in your speech this week you will be talking about how not to lose out on a funding. -- the funding process. how hard is it to secure funding?
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matt: silicon valley has a problem. in the first quarter of this year there were zero tech ipos, now there are two. this is not happen for years. if they're not going to exit at the end of the pipeline, they will not be investing. winter is coming. yvonne: why the decline? is there going to be a reverse? matt: it depends. coming up, the third ipo is very brave. if that goes well, maybe the ipo window will open again. they can start getting the $500 billion the unicorns are out. you mongrel we were talking about how much harder it is to get this billion dollar unicorn badge. in your eyes is it a blessing or a curse? matt: it is not that hard. if you can construct the term sheet you can for the valuation where does. for some companies they deserve the billion-dollar status. many others do not.
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it is a vanity valuation. yvonne: let's talk about the startups down under where you are from. you have talked about the us trillion economy stuck in the stone age, literally. how are they in terms of embracing technology. do you see the shift away from mining has led to a drive and innovation? -- in innovation? great tech companies have come out, but we have had a crisis in terms of financing. they missed the first big wave of the them. boom.m -- companies took a while to come out of the pipeline, but companies that have come out no how to survive. they didn't raise a ton of money from investors, but instead they are raising money from customers. yvonne: there is a bit of a brain drain. how do you fight that? matt: it is huge. we have a very so she oh
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conservative government -- so shcio conservative government. melbourne is doing well. they have a good environment for people to build stuff. i don't think it is all doom and gloom. we have a prime minister that understands what needs to be done. he has not gone as far as i would like, but he is turning the boat in the right direction as -- in terms of ideas. initial thought is we are an economy -- a commodity economy. we have to think about new industry. it might be tough times, but there is hope. yvonne: are you seeing new trends? matt: a huge number of things. the application of machine learning for everything. personalize medicine. you name it. crash, you have others.
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there are a bunch of companies that might not survive. yvonne: you said winter is coming, are you seeing a tech bubble about to burst? something we saw from a pre- dot com era? matt: globally people feel unsettled about the financial markets. sayinge bill gross perhaps the day of reckoning is coming. those are apocalyptic words. we have to see how it plays out. the growth has stagnated, it is tough times. tech is a party to all of this. expansion plans for, in this situation do you actually see some way to expand? matt: it is fantastic. you don't want to be a unicorn, you want to be a cockroach. you want to survive. the big thing that set the industry alive in the global market for online freelancing was the first initial crisis. people were looking for jobs online.
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businesses are looking for a cheaper way to do things. it actually is a great environment to survive. great guns. 20 million users. payment system. we are excited about the 500 different staff. yvonne: we appreciate your insight. thank you so much. angie. angie: thank you. more breaking news for you right now. out of japan, they just released their latest factory output figures. >> the industrial production figures are not as bad as expected. the figure for april is a rise of 0.3%. that went up against expectations of a fall of 1.5%. that is what -- month on month, seasonally adjusted. numbers really not
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as bad as economist had forecast. there was a hit earlier in the year from the earthquake in april. that did halt production. that delayed services and disruptive parts suppliers. companies like sony and toyota have had some disruption due to that earthquake. it looks like the impact is not as much as economist had thought. you take this along with reports that could lead to some more conversations around whether they may be stimulus -- there might be stimulus coming up later. sayingas been a report that they propose to introduce a fistula -- fiscal stimulus. with the slightly better-than-expected figures, maybe there will be more discussion about it in the time coming up. back to you. angie: thank you. engle getsstephen
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fast and furious in china. on first up. ♪
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angie: china's economic development the last few deaths -- decades could be described as fast and furious. where motorhead than drifters are building a car culture, take a look. >> here at track day, basically anyone can come out and didn't -- and spend $185 to have fun at the track. 's the golden port is trying to put china emerging car culture on the new track, offering an alternative to cruising or dragracing on the street. video of obtained this
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teenagers being busted by the police after illegal midnight racing in an underground parking lot. >> it is coming to the market. we are giving them what they want. they want to go somewhere to drive fast. they want to push their cars to the limit. this is safe. stephen engle: they are planning an ipo this year as they accelerate into an asset light licensing model. they are franchising racetracks nationwide. seven are built. more are on the drawing board, including possibly china's first race car track. 40% to 50% per year with so many cars being sold in china, with young kids, they spend money buying cars. they spend money on the track. they spend money on girls. stephen engle: not all girls are along for the ride. she estimates she has spent upwards of 30,000 u.s. dollars
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on gas, tires, and -- tricking out her nissan. >> here we go. ♪ ♪ >> it is rad to have a girl drifter here in china. i like the smoke. it is a big show for everyone. stephen engle: never mind she studied finance in college. she wants to be a professional drifter. you race against guys? >> yes. all guys. stephen engle: girl power. bloomberg news, beijing.
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let's drift to the stock exchange. taking a look at japan, south korea, and australia. >> i am looking at a corporation, making industrial valves. things like bronze, steel, stainless. you can imagine the applications. the stock is not done well. it is not covered by the market. .24% -- 2.24%. upside. >> that was my first pick. well. win, it is mine as this company makes oil and flour for bread and noodles. they are selling ¥1 billion of convertible bonds. some of that will go back to iraq.
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-- to buyback. angie: back in an hour to see how the stocks have done.
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♪ angie: sales tax on hold, reports from japan say the prime minister has ordered next april's increased to be postponed. good news from the latest data shows industrial reduction picked up in april. buy virgin to australia. classic cartoon characters could see disney taking legal action in china. up."me to "first


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