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tv   Trending Business  Bloomberg  September 6, 2016 9:00pm-10:01pm EDT

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♪ >> it is wednesday, september 7. i am angie lau. this is "trending business". ♪ angie: we will be live in singapore and sydney this hour. first, here is what we are watching. has one temporary protection from creditors. u.k. aia is offering helping hand, saying they should negotiate a free-trade deal in a
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post-brexit world. we will look at the chinese owner of the waldorf astoria. you can let us know what you think of today's stories by following me on twitter. don't forget to include #trendingbusiness. the china and hong kong markets underweight in 30 minutes. here is david with a look at what is happening so far this morning. we will be watching to see if hong kong continues this world-beating rally, one of the cheapest across the world if not major markets. quick and fast, that's where we are at the moment. a look at what is happening across asia right now. we are looking mostly at gains. we are pushing towards new one-year highs.
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malaysia, doing enough to offset the nikkei 225. dollar-yenn to strengthening. morgan stanley, 101.35. brothers, 101.37. that weng ominous given are pushing towards session lows. have a look at australia. gdp in 30 minutes. i rally a cross mining stocks, especially gold -- a rally across mining stocks, especially gold. slight pullback in the price. 12 out of 15 leading the market higher. japan, theut currency-sensitive sectors, they
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tend to fall when the yen strengthens. autos down 1.5% for that sector. ,ollar-yen at the moment two-day chart, there is your drop after the ism services number. let me bring up my chart for the day. there we go. big drop as well. stop losses were triggered. let me wrap things up with a look at the bond markets. yields in asia coming down, yields and the u.s. coming back a little bit. little space a between itself and the zero levels angie:. thanks -- zero levels. angie: thanks. hanjin shares reversing the earlier loss. the shippingting
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container line has been granted protection from creditors. what are the details behind this for hanjin? granted.s. judge has temporary protection for hanjin. this would allow hanjin ships to dock in u.s. ports and not have creditor sees the contents of the ships. it is a emperor order. -- it is a temporary order. it is now making gains. we are looking at some of the risks to hanjin and its competitors in the area as well. is working on its finances. its rivals look to benefit, right? ofthe cost to protect some
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its rivals against nonpayment has fallen. if you look at some other credites, their default swap has fallen to levels not seen since the end of last year. , bloomberg chart we have here the credit default swaps, the blue line, falling. it looks at how much it cost to move materials around the world. the rates are increasing, while the cost of nonpayment, the risk of nonpayment, are falling. a boost to some of the japanese shippers. they are not immune to the
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downturn in the global shipping industry. , herding to mitsubishi u.s says japanese shippers are sensitive to freight charges. however, he also sees it is probably short-term relief. angie: the next few moments will bring us another check on the health of the australian economy , second-quarter gdp numbers and 25 minutes. let's look ahead with paul allen in sydney. what are we expecting from australia here? expecting .6% growth for the second quarter, a little slower than the first
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quarter, but the first quarter was 1.1% growth. that would give us an annualized figure of 3.3 percent, so impressive growth figures. we got a sneak preview yesterday release of the second quarter accounts. net, we could expect exports to drag on gdp to the tune of .2%. we spend a lot of our time talking about weak inflation and a mixed employment picture, but 3.3 percent growth is impressive. another quarter of growth will give us 25 years of consecutive economic expansion for australia. still the lucky country, but for how long? austrian trade ministers shopping for a post-brexit trade deal with the u.k. anti-eu, so
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trying to bolster that growth, but brexit has not happened yet. is it a bit premature? the attitude is it is never too soon to start talking about trade. that is the philosophy here. is well awarester that britain cannot initiate formal negotiations until brexit is completed, but it cannot hurt to get an early start. in a position not to negotiate and tell they have formally exited from the european union. that, butpectful of we will make sure we are in position to have important preliminary discussions about what we can do together, and i am confident that today's discussions are important precursors to the kinds of discussions we will have. he also met with the eu
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trade commission with a view to working out a deal with the wider european union as well. preliminary talks with the u.k. and eu side hopefully wrap up this year with formal talk sometime in 2017. angie: talking about talking, and we are talking about it. thank you so much for that. let's take a look at some other stories we are watching. y with a roundup. the boj split on its policy review due later this month. board members are struggling to reach a consensus on the banks strategy. members are divided between those who support negative interest rates, prioritizing government bonds, and others who oppose additional easing.
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governor kuroda is at negative interest rate supporter. boj is likely to debate until the final moments before the policy meeting starts on september 20. soaringinternet giant's in tokyo after reports it would be included in the nikkei 225 index, replacing another company. holds 12 currently salesells. holds, and no nikkei onin the october 3. despite some short-term shareprice gains, the long-term impact would be "negligible."
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united nations security council has strongly condemn north korea, warning it is considering "further significant measures and less the tests stop." three missiles were fired on monday. the u.s. expressed serious concern that north korea acted in flagrant disregard and called for tougher sanctions. president obama reaffirmed the commitment. angie: thank you. coming up later in the show, taking on facebook. we will take a look at one company taking on the social media giant in southeast asia, trying to.
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-- assets ishy upbeat on asian equities. this is bloomberg. ♪
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angie: welcome back. i have to show you these breaking news shots, live pictures, if you can see through e, a crew returning from the international space station. un-docked earlier today. it is pretty hazy, but you can see it. i hope that is it. maybe it is a helicopter. american and two russians on board.
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all right, back down to earth. two guests right here. we are talking about asian stocks, excluding japan. they are up after week u.s. services native bolster speculation the fed will keep rates lower for longer. asian equities are hot. asian equities, emerging markets , they are hot, but a lot of people have that on their checklist. why do you in particular think that this is the case? , we go back athat
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little bit, emerging markets and asian markets have been in a bear market for five years. now it has started to turn. this turn is important because we are seeing earnings surprises coming through in china and the rest of asia. instance,apan for japan was a great market for a while, but when the yen strengthened, everything came back down, so earnings per share growth was downgraded, and even in the case of europe. it is difficult with the italian banking system issues and so on. ,asically, if the u.s. emerging, and asian equities, which are ruling the world of the moment, so that's why money is coming to our part of the world rather than staying in japan or europe. the next two weeks will
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be radio silence. it will be data driven for the markets at least. what are we going to do without this guidance? >> it is difficult. you are quite right. actually i am surprised the u.s. continue to advance, although it is not like asia. asia yesterday had a brilliant pointp between 1% and one 5%, but the u.s. continues to advance. angie: hold on to that thought. this might add some color. we have some breaking news with federal reserve governor williams, season flechette rising, also saying that waiting too long to hike risk imbalances
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is perhaps something to consider. also saying consumer spending is u.s. is at full employment, and inflation is on track to reach its goal. so there you have it, providing some guidance to the markets right when we were complaining that we weren't going to get any for the next two weeks. this directionally an a for the markets to believe in a september hike? >> i do think so. the fede coming from before the nonfarm payrolls employment data, that was quite hawkish. aid i want yellen se it. mr. dudley said i wanted, so i think it will happen. price in aho do not rate increase in two weeks by the fed, i think that is living at the peak. angie: kind of like that murky shot.
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still waiting for it to land. just like this landing of the fed rate hike, but at the end of the day, williams only is dismissing the u.s. jobs report, which was disappointing, because he said we are at full employment in the u.s. glass half full or half empty? as far as the fed is concerned, it is half full meaning the economy is doing ok. the rate hike is priced in. it does not matter what the data says. they will painted in a different color. thee: let's talk about fixed income space, looking for yields, everything holding pat, waiting for an anticipated move or not by the fed, oecd bonds, you don't like them. >> no. findinghere are you
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yield in the fixed income space? >> emerging-market debt. angie: what currency? and local denominated currency? absolutely. 25 basis points is priced into the market. rock thehink that will emerging currency so much. in the emerging world, as i said, we are seeing brazil going from recession, china pmiilizing, the latest number, so i think asia can ride through this. i think money will continue to come to the emerging world to look for yields. angie: rank them in terms of preference? also, return and health, ok? fundamental health. >> i think of that definitely
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india is doing very well. .ndian bonds, indonesian bonds i would even included some stage renminbi bonds. china actually club, thanks sdr will need to adjust and by renminbi bonds. they are offering a yield of 2.8%. angie: didn't they just change the rules? >> exactly, no fixed amount. you can invest as much as you like. angie: as much have under management. has weakenedbi compared to other currencies over the past few months. it offers better value. there is an article in bloomberg today talking about the export share of china increasing.
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china is exporting more to the rest of the world, so that is a great article. ist means the renminbi becoming quite competitive. angie: look for that article on or if you are a subscriber, search for it. thank you so much for that. stock,head, taking china's waldorf owner presses cause on its recent shopping spree. this is bloomberg. ♪
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angie: this is "trending business". i am angie lau. welcome back to the chinese owner of the wall door -- world --hysteria has press pause waldorf astoria has press paused on future deals.
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has anbang'snt contribution been? the last i saw new york, they were renovating it. bang has been at the forefront of a wave of outbound chinese money into overseas acquisitions. to give you a sense of this scale, over the past two years, they have announced $13.5 billion in deals. they have been out there with the deals. that figure does not include the $14 billion deal they would have done to acquire starwood hotels. was that cash or would they have gone to the debt market? >> it would have been a combination. angie: they were willing to add to that pile. they are pressing pause right now. why?
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>> at this point, it looks like they are trying to integrate more of these companies. just in the past year, they have of theirted four insurance acquisitions into their life insurance unit. spending moreg time on integrating these companies, having an impact on profits. insurer hasrean already seen appreciable increase in profits as anbang has brought its own processes to the mix. that is one of the reasons. the vice chairman said you cannot do a deal every day. , there was a be certain time -- quickly, anything to do with the proposed ipo listing? is saying they want to
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be an open and transparent player in the market. one way they can prepare for that and set the stage for it is by taking time to do that. angie: thank you so much. more coming up. this is bloomberg. ♪
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♪ angie: the top stories trending this hour. south korea's cash-strapped hanjin shipping surging on reports a u.s. judge has approved its motion for bankruptcy protection. according to a reuters report, this would allow vessels to docket u.s. ports and not fear creditors taking action. 85 ships have then it effectively marooned at sea as ports in the u.s., asia, and europe refused entry. the boj is split on its policy
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review due out later this month. basically saying that board members are struggling to reach a consensus on the bank strategy. members are divided between supporting negative interest rates, prioritizing government bond purchases, and others who oppose additional easing. take a look at macau, biggest worriesperator saying are not over yet. word now, breaking news, australia releasing second-quarter gdp data. let's go straight to paul allen in sydney for more. it is a slight miss. we were expecting .6 percent.
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we have .5% gdp growth for the second quarter and australia. year on year, the figure came in as estimated at 3.3%. however, the first quarter number, 1.1% has been revised down to 1%. the austrian dollar reaction, posting a reasonable fall, down 10th of one cent. household spending was up .4% for the quarter. we had a preview on this yesterday with the current account balance, net exports offering a .2% track on the gdp number. this number does mark something of a milestone. officially 25 years of consecutive gdp growth in australia, so a quarter-century now without a recession on the release of these figures. to recap, second-quarter gdp growth less than expected, .5% for the second quarter. angie: still no recession.
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thank you so much for that. on the horizon, what is happening david? david: paul was talking about the aussie dollar there. the 10 year aussie chart, trading 1.84% on that yield before the numbers came out. what are we doing now? nothing interesting there. let's get that down. just a check of course. have a look what is happening across the region. it is amiss when it comes to aussie gdp numbers. across china,g up hong kong, and the philippines, basically flat on those three markets. we will talk more about hong kong in a moment. we are going for a fifth day of gains. have a look at the fx markets. this follow on move we saw from the u.s. dollar overnight,
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weeksng the most in five overnight. again, traders are starting to readjust their positions ahead a what is now expected to be push back on the fed hike. .ave a look at dollar-won we are back to the levels of last month, weakening a bit, call it flat. southeast asia, one-month low on dollar-rupiah. down for 10th of 1%. -- 4/10 of 1%. ro-dollar,year down there slightly. a lot of it is dollar-unit as
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well. after the drop 30 minutes prior to the cash market open in tokyo , we have been trading at these levels. it seems to be triggered by the drop overnight. 101.41. we talked about hong kong, so let me draw you a chart of the hang seng index. it was cheap when it started, this rally that has driven to the indexed to the highest level in 13 months. it still means it is one of the cheapest, still overbought. have a look at this graphic on our bloomberg. forward earnings basis, it is the cheapest after the south korean kospi, but also overbought. we are trading 13 times forward earnings. the s&p 500 is trading at 20-21 times. asia on average trading at 14-15 times.
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so still fairly bullish on stocks here in hong kong. angie: the bulls are still out. china is facing a slowing economy at home, but when it comes to the wider picture, it remains on top. the nation's share of global exports was 15% last year. it seems china has taken a larger slice of a shrinking pie. the pie is smaller, but china still on top despite the fact risinge country has wages, shrinking workforce, increasing competition from export countries like vietnam and mexico. china saying it's global exports at 14.6% in 2015. that is up from 2014. china has certainly regained control here. the united states also increasing its share of global exports at 8.96%, but china's
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number is the highest proportion of world exports according to data going back to 1980. russia is the laggard there. it has decreased it's global exports the most due to declining oil prices. a slide the mystically will not impact this picture too much for the next year either, because they are seeing demand for other countries exports weighing as well, so that is seeing that slide in china's imports. angie: the last time this happened in terms of dominance yuan.cused on the weaker a global trade war is of concern here. it was a hot topic at the g-20.
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china has moved into higher value added products like robots and computers, pitting china against south korea and germany. all this talk we've heard about china losing its global advantage, it's nonsense and not going away. you can see that reflected in the tensions by the fact that we have this big move through and populism and the brexit vote. angie: what about internally? juliette: they are still spending. we saw on tuesday a statement from the state council saying they are going to lift restrictions on infrastructure spending, allowing equal access granted to private investors in sectors such as education and medical care. they are saying it is a good time to boost infrastructure because commodity prices continue to decline.
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china continuing to ramp up. angie: thank you for that. china may be preparing a comprehensive overhaul of its tax system as well. sources tell us that beijing may change its consumer tax policies to accelerate the ship towards a consumption-led economy. we have bloomberg's china economy editor here for more on this. what are they proposing here? >> sources have told us that the proposal is to shake up the taxes. things like cigarettes, tobacco, and some of the things that have become staples, once considered luxury products for the chinese middle class are now a staple. so they still have these higher taxes.
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they are high enough to encourage the everyday consumer, the middle-class consumer, to head to south korea and hong kong to buy. angie: we saw that especially when it came to purses. the luxury goods tax was north of 30% to 40%. that's pretty significant. >> so this changes a little bit. they can have some impact on behavior, especially if we have mainstream beauty products, the taxes come off their, they will go to south korea to load up on that stuff. if we have higher taxes on things like cigarettes, alcohol, and also charcoal used for heating and cooking. sin tax, but let's adjust the tax system to reflect the changes in consumption and the economy that they are trying to engineer.
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they are just proposals at this stage. the won't go back in debated by other ministries, so things could change. angie: not only tax revenue generating, but an idea that could shift behavioral change. >> that's right. it has implications on this reform process between the central government and the provincial government. who gets the tax revenue? that is the big question. that is being debated. we don't know the answer. reforms, there were some value-added tax changes, and the central government does seem to be giving the provinces some more revenue in some ways, then closing the door on the way they can generate their own money and others. it is part of the tussle between central and local governments. angie: modern china discovering what we all know here in the west, death and taxes, that is
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all there is. thank you for that. checking in on some other stories we are following for you right now. spacex explosion likely to have a knock on effect and taiwan. the falcon nine rocket was supposed to carry a remote sensing taiwanese satellite into orbit in a subsequent mission, but that may not happen before the end of the year. taiwan is waiting for more information, but is not considering another company for its launch. asean resume discussions today with trade, terrorism, and tensions in the south china sea on the agenda. a year ago, it was thought that the tpp, the china trade pact uniting 12 nations, but it has been bogged down in national parliaments in several countries and looks unlikely to pass soon.
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the summit will be followed by talks with other countries, including the u.s., china, india, and japan. upgapore has stepped inspections of its banks to tackle financial misconduct. the monetary authority says responsibility for ensuring compliance relies on each company's board. tougher action. singapore is the first country to charge a banker in relation to 1mdb. how one company is taking on facebook and southeast asia. our interview is next. this is bloomberg. ♪
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angie: a quick check of the
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latest business flash headlines. effort torts opec's stabilize prices, but repeated it must restore production. the iraniante sides president saying that iran suffered greatly and it is vital for the country to make up for the loss. speculation that oil producers may freeze production when they meet in algiers later this month. china closer to the biggest overseas acquisition by a chinese company. from 17ed commitments lenders for $12.7 billion to finance its purchase. chemchina agreed to buy it earlier this year, making it the largest supplier of pesticides and chemicals. bill ackman's hedge fund says
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chipotle shares are undervalued. the fast food chain has been struggling. shares have fallen 14% this year. move over facebook. media platforml wants to make its mark in southeast asia. it has 43 million active users and the backing of foxconn. had you take on a social media giant? the cofounder and ceo right now. it is good to see you again. a great ambition, facebook, emerging markets, but facebook once to be the leader. that we be wrong to say are competing directly with facebook.
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and there are many social networks for gaming, teenagers, artists, but there is an opportunity as countries open up for me to provide a complimentary or differentiated platform in the markets as well. just as the same way there are many platforms in japan or china. we think there is an opportunity to do so in india and throughout southeast asia. angie: india is an exciting market right now with a population almost as big as china as they compete for the global stage. only 220 million in the smartphone space compared to to 800 600 million million people at smartphones. how do you make waves? are twonk there specific ways we can become successful in countries like that. a business model.
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there is a now grissom that limits reach on facebook. are a contentyou creator, it is difficult to monetize your audience, where is weak create label interactions with creators and deliver them a business model. we find that is extremely effective and has been propelling our growth tremendously. we are very excited. the strategy seems to have paid off, drawing in big-name investors, strategic partners including foxconn. we know that as the maker of smartphones like the iphone. it is the world's leading phone manufacturing. when you going to do at the $10 million you have raised? are working on consolidating the quality of our growth, putting quality to our execution, bringing in games and applications. enabled toight have
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interact with your celebrity of beice, very shortly you will up to play games with them, sing songs with them, and all those things are high at monetizing us toes that will help get cash flow positive in the next 6-12 months. angie: how are you culturally relevant? it is one thing to say it, but how do you do it? >> there is a range of different things. facebook is an amazing service. that the very clear monetization model is disconnected. we have a young woman in the philippines, and she had 3 ers onn follow facebook, but her ability to reach fans has been trundling. in january ande
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made so much she could go and buy a car. contentre a young creator and the philippines, that is a fantastic thing. we are working on replicating that model everywhere. we are having a fantastic time. angie: it sounds like talent acquisition is the backbone of the strategy as well when it comes to cultural relevance. thank you for joining us. we really appreciate that. live to scott you morrison speaking about the latest gdp figures. >> that is why the turnbull government continues to back australia to succeed and our economy with our national economic plan for jobs and growth that we are now continuing temperament.
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with real growth through the year of three .3%, we are leading the advanced economies of the world. on year average terms, the economy is better then set out in the midyear update and the recent budget. the improvement and nominal growth is also welcome with a nominal growth through the year exceeding real growth for the first time in several years. the accounts released today show our best export performance since the sydney olympics. 30,ng the 12 months to june growth of 9.6% and 1.3% for the quarter. this includes 10.4% through the year growth in goods exports, which includes the strong performance on resource exports and a 6.3% growth in services. after taking account of imports, net exports contributed 1.5 percentage points off a growth of 3.3%. that is slightly exceeded by household consumption of 1.6%.
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0.7% andand of investment at 0.5%. export position was softer due to seasonal factors and followed a strong result in the previous quarter. the accounts highlight continued successful transition of our economy, which includes by definition as you move out of the mining-investment phase of that boom -- angie: talking about the diversity necessary for the strain economy. we have a new central banker and hurting that. scott morrison, the treasurer of the australian government there. thank you so much. recovery.he road to this is bloomberg. ♪
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the billionaire chairman of galaxy entertainment says it is too early to know whether macau is on the road to recovery. biggestthe world's gaming hub needs a track record of growth. it isterms of recovery, too early to say. in the past, everyone hoped to have more high end clients. now the number of vip gamblers have dropped. we are providing more facilities to catch the mass market. this business has stabilized. give me two more years to see whether there is a recovery here. angie: how gaming analyst joins us right now. gaming analyst joins us right now. better numbers, but one number does not a trend may, right? >> right. it is a bit early to be calling
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a macau recovery at this point. early signs, but when you talk about sustainable, long-term revenue growth, it is in the hands of the mass market segment. this segment generates lower it is long-term study revenue compared to the vip still declining. angie: it is because of the new resort. is that going to help? >> absolutely. it could drive more overnight visitation and business to the strip overall. it adds to the collection of sands china's results. angie: what should investors be looking for? >> operational efficiency across the board. the man is only just coming back , and so it is about being able to maneuver through this type of environment and whether or not they can uphold those margins.
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angie: thank you. coming up next, china about to implement sweeping changes to consumer taxes? we will take a look. this is bloomberg. ♪
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♪ announcer: from our studios in new york city, this is "charlie rose." charlie: gloria steinem is here. she is a feminist icon, a writer and an inspiration to men and women. she has led an extraordinary life of activism and adventure and writing. her new book, "my life on the road," reflects on championing women's rights. in 2013 she received the presidential medal of freedom. i am pleased to have her back. welcome. gloria: thank you so much. charlie: is there any award you have not received?


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