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tv   Asia Edge  Bloomberg  September 11, 2016 11:00pm-12:01am EDT

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the hang seng is headed -- boost drilling despite the global glut. turn off their phones immediately. $20 billion has been wiped away. rivals in the fight for visibility --
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♪ all right, welcome back. sorry about those technical difficulties. recovered can't say the same about the markets, a downbeat monday for investors. juliette: that's right. we are seeing selling across the board today. we are waiting for a key speech from a female fed member. it is not janet yellen. it is one of the voting members. she is normally quite dovish. if she signals a hawkish tone upe her fed peers have come with that likelihood of a september rate hike back on the table. the moment, 30% chance of a september rate hike. 60% in december.
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cba saying the u.s. economy is not strong enough to withstand to rate hike's this year. that nervousness and what we saw on wall street friday playing into markets here. we had huge volatility in the u.s. session on friday. the firsts 15 for time in 44 training sessions. a lot of volatility in asia, hang seng off by 2%, only two stocks in the black. off toi also being sold the tune of 1.6% today. we are seeing selling coming through in all the asia markets. japan off by 1.5%. strengthening, impacting. a mixed picture on the japanese economy. ppi showing deflationary pressures exist. in australia, weakness in commodity players, weighing on
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the overall benchmark index, off by over 2%. willie parsons leading the parson -- willie daye: it is a remarkable today, also remarkable for samsung, plunging, check it out, 6.3% down after a told note offn users to turn their phone because there may be a fire hazard. the company has lost $20 billion in market cap since thursday. samsung announced a global recall more than a week ago. why is the stock reacting now? >> some investors still thought that it is just a temporary product pickup and they were not seeing a major downgrade until
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recently. saw the risingey regulatory risk may hurt the company more than expected. the company has said they expect the cost to be about $1 billion, but then they may be assuming that some consumers may ask for a replacement unit. now it could be that they ask for a full refund given that they can't carry phones on the plane. angie: exactly. you buy a phone because you needed for your life. if you can't use it, you have to go somewhere else. exactly. note seven targets business users, so that could be a big deal. this is a huge reputational blow for samsung. how important are u.s. sales to samsung? regulatory agencies are pretty strict in the u.s., so if
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samsung loses their foothold, that would hurt 20% of smart phone sales. angie: how has the negative news been priced in given today's plunge? >> as we spoke earlier, the impact on the brand equity would be more than earnings given that investors would be willing to pay a premium on the brand today'sso if we look at valuation after the plunge, it is trading at nine times forward earnings. it lost market share to apple, so it could go as low as eight times forward earnings. the could be more to calm. angie: all right, this is a nightmare scenario for samsung. so much for that. you can get more on that story of you can watch some of the on bloomberg today.
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hillary clinton has canceled a campaign trip to california amid new concerns about her health. she left a ceremony for the 15th anniversary of 9/11 and appears to stumble and needs help as she moves towards her official vehicle. later she released a saying she now overheated, but was find. her doctor says she has been diagnosed with pneumonia and was dehydrated. north korea is reported to be preparing another nuclear test, saying it will take place at number three tunnel. the north carried out its fifth nuclear explosion on friday and claims it can now fit an atomic weapon onto a rocket. testfired several missiles in recent days, most traveling 500 kilometers be theore falling into sea of japan. shopping bottleneck has
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eased as a tanker entered port and will finish unloading cargo. njin has about 14 billion cargo stranded at sea. iran's national oil company has agreed to a deal with sinopec to develop a refinery. worth $1.2t is billion and is part of iran's plan to upgrade its oil industry after years of sanctions. iran intends to boost production to pre-sanction levels before it will consider joining a saudi-russian proposal to cap output. from japan ise leading indicators of capital above and below lov estimates.
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the boj may start adopting a new communications strategy. first, break down the numbers. >> what we saw today was a bit surprising. eatingmachine orders estimates, jumping 4.9%. analysts were expecting it to fall 2.9%. we have to take these numbers with a grain of salt because these are very fall until sets of data. pasts been erratic in the six months. earlier this year, we saw a jump of 50%, than april a plunge of 11%, now up 4.9%. a different story when it comes to wholesale prices, in the ppitive since april 2015, fell more than expected. companies are holding spending because we are seeing the
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stronger yen, up 14% in the past year. we will see the central banks new communications strategy of not trying to surprise markets anymore. also, analysts are noting that perhaps this is a shift at boj? >> that communication tactic we are seeing is different with the boj. , communicating in a way that markets will respond positively hopefully for the boj, so last week we saw the boj governor haruhiko kuroda and his deputy explain the costs and before usingpolicy similar language, something we have not seen in the past. they went one step further to try to explain their negative rate tool, and at the same time one of the dangers of excessively low yields and long
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maturity bonds. so we are now seeing the market starting to react to that. we are seeing that in the yield curve, a steeper yield curve, so take a look at this. central bankhe signal a preference for a significantly positive rate in that part of the long term, we are seeing that the yield curve is becoming steeper, that white line over there compared to the red line, which would be a month ago, and were seeing the 20 year yield above 0.4% after dipping to around zero earlier this this change in strategy by the boj may be starting to pay off. the bojysts are saying is changing its tactics to one that is more focused on dialogue with the market. importantlogue very from a governor who is notoriously keen on surprising the market.
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>> exactly. angie: thank you so much for that. we are taking a look at markets right now, a massive selloff, including the hang seng market. fact, we are looking at the selloff in the hang seng because from the last trading day shanghai, so interesting note there. let's get some more insight. yes, a lot of notes coming through today, but one stock we are watching closely is samsung still being sold off on recall, downen 6.4% at the moment. this has taken two thirds off index.r all kospi you can see how much the stock is been under pressure, down 6.5% during friday's session as well, the biggest two-day drop we have seen in sam's son since
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2008, about $20 billion wiped off its market value. since 2000 son\ eight, about $20 billion wiped off its market value. samsung continuing to be sold off, down 6% in korea. this is waiting to into other electronics companies as well. moon down 9%. we are seeing buying in insurance stocks in japan and korea. dongbu at an 11 week high after the bank of korea left interest rates on hold. i want to show you the energy stocks we have been watching in australia. oil continuing that the klein in asian trade, down 1.5%. decline inng that
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asian trade, down 1.5%. origin energy coming under pressure. in asian trade, down 1.7% for the oil price, the u.s. nymex contract. oil lower, a lot of concern about the central bank, all weighing into this deep selling we are seeing across the market today. angie: deep selling despite better than expected machine orders out of japan. we are seeing asian stocks leading this morning. banks, special the boj, and focus today. put on your thinking cap and your diagnosis of the boj right now. essentially a a lot of people pressing that there needs to be action soon.
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>> it is becoming incredibly boring. they say they will increase liquidity by buying government bonds. the markets got skittish. in the last two weeks, we have seen selloff of jgb's on the basis the boj will change policy. it won't. it can't. angie: you are saying the markets should return to jgb's? >> absolutely. there is nothing else they can do. they need to stop this nonsense that by buying paper assets it is going to cause prices to go up. it won't. they can start giving money to people and not to banks. when you give money to banks in a recessed economy, they will put it somewhere safe.
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they will not spend it. thanks have started renting sa fes for storing money. , yeah,eutsche bank exactly. since nobody is giving them anything, with an economy that does not seem to be able to hit 2% and stay there, they will spend it, of course. angie: let's look at machine orders today. it was a robust figure, 4.9%. a lot of people got that wrong by a margin of 6%. this is something we have been harking on this whole time, if only businesses were confident and would invest more. >> this is been going on for six months. let's not move away from that.
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it is based on three precepts. one is huge injections of the quiddity. second, fiscal policy that cannot make up its mind whether it is expansionary or contractionary, and the third arrow being structural reform. we have seen the first one. the second one is primarily on hold, and were seeing practically nothing on the third one. they better start doing what they said they were going to do. angie: do you bet against japan in the short-term? >> very much so. they are not doing what they said they are supposed to be doing. best-known primarily to politics rather than to economics, we have decided the economy japan is not going to move and less as a government and as a bank is going to do something. i feel very uncomfortable about that. literally waiting
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to see what they are going to do. angie: you and i both know they have tried for 20 years, lost decades it has been described as , but this really is the first time we are seeing coordination, right? monetary and possibly fiscal. we saw the budget stimulus coming in. things was yet another that when i read about it, i started to laugh. i'm sorry. i'm still laughing. come on, please, give me a break. problem. a huge major address it, address it massively. i'm exaggerating. has shinzoour view,
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abe and haruhiko kuroda lost credibility? , prices goncrease up. and when ian old man was in my prime, milton friedman was the highest god in the sky. on prices of assets, not goods. haruhiko kuroda is 50 years behind. i'm sure he wears flared trousers. angie: he looks pretty stylish. whether or not his style of monetary policy is modern, that is to be argued, and certainly you have made that argument. i do want to know if you don't think that those ideas aren't working, so what ideas are working? get you on the
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positive side and 20 minutes for the rest of the discussion. coming up next, yahoo japan tried to merge with yahoo! before the deal, but why was the proposal rebuffed? more on that coming up next. this is bloomberg. ♪
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angie: a quick check of the latest business flash headlines. betting onated copiers as it looks for new areas of revenue. it is planning to announce new machines for corporate customers on monday. xerox and canon dominate the market, but hp is hoping the move will take more of the $55 billion business. the company may make a greater push into 3-d printing as users switch to digital mobile devices. bmw planning a major restructuring of its executive board.
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the company will also combine marketing and sales operations for the bmw and mini brands. the company is changing its electric car strategy to take the game to tesla. bmw supervisory board is expected to approve new models. spacex says witnesses should share video and photos of the explosion to try to figure out what went wrong. elon musk made the plea on twitter, where he called the incident the most difficult and complex failure in the company's history. waslcon nine rocket engulfed in flames minutes before a prelaunch engine test. the cause has not been determined. yahoo japan made a play for yahoo!, but it's approach was rejected. of equals,a merger but yahoo! said the terms were not compelling enough. our bloomberg tech editor joins us from tokyo. very interesting
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story. first, why make an offer? we all knew that yahoo! was in talks with verizon to sell itself. why was this in there? it was most likely a hedge. the bids range from $3 billion to just under $5 billion, and this looks like it came in just izon's deal. it was probably based on the thought that a combined yahoo! may have been able to turn things around, but there were other parts of the deal that did not make sense come the tax treatment of yahoos ownership and alibaba, so ultimately it was doomed. with the deal have brought any benefit? -- would the deal have brought any benefit? >> yahoo! and yahoo japan many years ago kind of took different
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.aths yahoo! in the u.s. found itself against formidable competition in the form of google and facebook. japan, yahoo! has become the ebay of the country and it is still a major web portal with news, mail, as well as being the brand for softbank's telecommunications business. findingrms of synergies, whether technological or in terms of market share, that would have been rather tough i think. the main thing they shared was the name yahoo!. angie: all right. we will leave it there. thank you so much for that. we are still engaged in watching the markets right now as they take a tumble and follow the lead on friday. .ou are watching "asia edge" plenty more still to come after the short break. this is bloomberg. ♪
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welcome back. you are watching "asia edge". the selloff in global stocks continues, the msci index headed for its biggest three-day loss since june. financial markets have been jolted by concerns that central banks are questioning the benefits of lose monetary policy. , $20 million that $20 billion in market cap gone since thursday as users were urged to immediately turn off their notes seven smartphones and stopped charging them to to the risk of battery fire. samsung announced the recall of
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all 2.5 million phones at the cost of $1 billion. hillary clinton canceled a trip to california amid new concerns about her health. the 15tha ceremony for anniversary of 9/11 and appeared to stumble and need help as she moved towards her official vehicle. later, she released a statement saying she felt overheated, but was now fine. her doctor says she has been diagnosed with pneumonia and was dehydrated. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. all right, let's get the latest on the markets right now. not a very good start to our trading week and have a look at the widespread selling we are seeing across the region. the hang seng off by almost 3%, no stocks in the black. this is the worst session we have seen on the hang seng index
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since the 24th of june, down by 2.7%. under players coming quite a lot of selling pressure due to the fact we are continuing to see a selloff in u.s. nymex oil. the shanghai market also heavily sold off as it heads into its lunch break. it is down over 2%. ,orea having a bad day as well samsung shares accounting for two thirds of the drop on the kospi index. the nikkei extending its selloff, stronger yen playing into things, a mixed picture on the economic front as well. we have machine orders looking showingor july, but ppi we are seeing the factory floor in deflationary mode. taking a hit on the asx 200, commodity prices.
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the new zealand market off by 2.5%, the worst day we have seen in new zealand's market in about four years. this is the state of play across asian markets. not looking like a good session at all angie. angie: all right. thanks. oil extending declines following the biggest drop in more than a month after u.s. producers increased drilling despite the glut. ok, tell us more about this bearish sentiment. is falling again for a second day today. $45, brent around trading around $47. there is quite a bit of bearish sentiment. rigs drilling for oil in the u.s. rose for a second week on friday, 414 rigs drilling for oil in the u.s., the highest
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since february, so clearly u.s. producers are getting back into the market and think they can make money and will try to boost production, so that is weighing on prices. the second factor remains the glut here and there is still an oversupply in the u.s., inventories are more than $100 million above -- 100 million barrels above the average, so that's why you're seeing the market fall for a second day today. why might opec producers then prefer voluntary output caps to a production freeze? >> that is the other thing folks were talking about. opec members are planning to meet in algiers later this month along with some non-opec members, including russia. to thef the talk up meeting has been about a potential freeze to production, a production limit, but it seems
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like that talk is shifting now towards these voluntary output cap's that would allow each country to name their production limit. bearishy that is quite for the market, but there could be interest from opec in doing this. they obviously want to achieve some unity and want to avoid what happened earlier this year when there was another meeting and they failed to come to an agreement because iran would not agree to limit production. toy are returning international markets after sanctions were lifted in january. so this might provide some starting point comes impunity, even if they agree to voluntary that each country would decide for themselves, but that is bearish for the market as well. angie: thank you so much for that. in other news, the greek prime minister has repeated his call for debt relief, saying the country needs stability, not elections. he spoke as opinion polls showed
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his government trailing the conservatives with a general election next year. do inllowed inspectors athens after warnings from eu lenders that greece is again falling behind. talking torlines regional rattles about a380 jumbo jets. the carrier is negotiating with airbus to add 90 more seats. malaysia airlines would become the customer to keep flying the planes. star board value has built a perrigo.e in letter andiew the
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looks for to constructive and productive dialogue with star board. another big fish caught in china's anticorruption net, the mayor and acting party boss of tianjin is the latest to be snared in the corruption crackdown. we have more on this. who is this guy, tianjin, this is significant. >> he is the acting communist party boss, the top position in any municipality, but also the mayor as well. he is the most senior official in the last year to be ensnared in this anticorruption probe why xi jinping. ands the mayor of tianjin, acting party boss, and a former underling of xi jinping. you would think he would be one of xi jinping's, but obviously
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he has fallen afoul of the authorities. he was in violation of serious this plenary violations. that usually mean some form of corruption are taking bribes. states what the tianjin run newspaper said, anyone who violates party discipline will be sternly dealt with no matter who it is, no matter what post. thisbly he also had umbrella of protection back in august of last year when there it was that massive explosion and fire ball at the port from hazardous material being stored in legally at the port. 165 people were killed. we have that aftermath footage here. many executives as well as some local authorities were sacked because of that, but he was fairly protected. however, that protection seems to be running out because of these latest charges. probably not related, but you don't know.
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that umbrella protection is no longer above his head. angie: two perceptions from the general public, going after his own guys. second one internally is that someone loyal to xi jinping, you can't be protected, so where is the loyalty? how does this affect upper tier leadership? >> there will be a shakeup of the committee next year as well as the 25 member politburo. there is a central committee meeting in beijing next month, all the contraries across china are jockeying for position. it is a highly politicized environment right now among coming his party leaders and middle tier technocrats. probably know that was -- you know that huang was probably lobbying hard to become the party boss. there has been an investigation. , hehe party boss of tianjin
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most likely undoubtably would be elected to the 25 member politburo. angie: not anymore. >> tianjin's right now, in a , no mayor, no public security chief. angie: what is the public reaction in tianjin about these arrests? >> we don't know that, but the state media has made a statement, so they are sending that message to the people and other communist party officials don't overreact, don't come to his aid. he has been 13 years in tianjin. the editorial spoke for items warning the officials in tianjin go along with this. angie: wow. always love your insights here.
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hillary clinton has canceled plans to campaign in california on monday and tuesday because on sunday she left a 9/11 commemoration ceremony early and the video is doing the rounds showing her needing help to get into her official car. it has revived questions about her health, physically and politically, i guess. exactly. she has canceled events in california for monday and tuesday. a fundraisertend and appear on the ellen degeneres show. and donald trump attended a 9/11 commemoration event yesterday at ground zero. thestander notice she left service early and shot some video of it, which he posted on twitter that has been picked up and reposted by the big networks. you see her standing and waiting for the car and appearing to stumble and perhaps need assistance to get into the car.
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he posted on twitter simply title, hillary clinton, 9/11, n.y.c.. she had been diagnosed with pneumonia and had become overheated and dehydrated. she was given antibiotics and advised to modify her scheduled to get some rest. nowe is video of her showing her need assistance to get in the car, so reviving all these questions. we expect to qualities from political candidates, but at the same time we know their schedules are relentless. how does one even find time to sleep, let alone rest, let alone recover from pneumonia? a key question is what republicans will be doing about this. how will they be using this as a political foil? >> bloomberg has been told that donald trump does not plan to do anything with it. apparently he will stay quiet with it.
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believe it for trump is a defining moment for the campaign. the problem is whether trump can stay on message and refrain from saying anything about it. has been criticized for trying to highlight hillary clinton's health issues, saying they had been spinning conspiracy theories. with the latest event, it's difficult to manage it further. clinton has a narrow lead over donald trump, but because of the delay between the pneumonia diagnosis and her campaign releasing this information about the fact she had pneumonia after the 9/11 commemoration, her departure from that early, there was concern that maybe voters may be less confident in her. with her use of private e-mail as secretary of state and also the ties to donors to the clinton
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foundation, so these questions may fuel into them. weekss several important leak coming up. one person on twitter said the more you focus on her health, donalde you ignore trump's taxes and trump university. another question, what happens if hillary clinton is genuinely ill and not able to continue hurt candidacy? which is a good question. next, theing up latest dose of china data due tomorrow. our guest ishy feeling optimistic. this is bloomberg. ♪
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welcome back. a quick check on how stocks are doing.
11:46 pm down in china, a selloff right now. a lot of people speculating that it is that fed rate concern as we get a little guidance perhaps before the september 20-21 decision. we getuiet, so perhaps comments from a dovish fed governor. >> i want the guy to come up and see good morning, my name is john smith and we are raising rates. that is september 20-21. the guidance is switched off completely. cut -- l increase, angie: how do you make your bets? how do come up with your forecast? >> again, he used to be
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employment. it has dropped a little bit, because employment is for point something. they are not looking at it anymore. then it was inflation. then it was cpi. there is no point in looking at them. what else are they looking at? .ngie: timing why not timing? two years since ben bernanke said we will ultimately raise rates, right? >> they raise rates in december, so seven-nine months now. will they raise again? my answer is they want.
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-- my answer is they won't. they will be hard put to say we will increase rates. november is election. the fed has got a very ofsistent track record raising interest rates right before and right after an election. maybe they are politicizing it by not doing anything? >> it is not true that during an election the fed says they will wait, no. interest ratesd just before and right after an election. if they don't do anything in september, then october is out, november is out, and then christmas time. merry christmas, world,
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fed rate increase. what about china? how close are they looking at china? some datang to get that could possibly show stabilization. >> yeah, they will look at china, but it is not one of their priorities. exports to china is 1/10 of 1% of gdp. angie: ok. let's shift out to china here. it is the world's second-largest economy. it has been the workhorse of the global economy. >> don't start me on that. angie: we could argue that. >> they are still growing at 6.9%. as long as retail sales don't come below 10%, i am happy. 20%stment has come from
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down to 7%. angie: that's a good thing, right? >> we can't have it both ways. look, investment is coming down, how terrible. angie: it depends on where the investment is coming from, ok? it is big capital investment from the government or big banks -- curse.s an old jewish don't ask because it will be given. i'm a great fan of the aussie dollar, ok? they are doing quite extreme things. they haven't really addressed steel. in other words, they are doing all the things they said they were going to do. china on to say the economy is
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going to decelerate. well, you can't trial investment without something given. long as there is consumption, i have no problem seeing investment coming down. angie: what about that guy in china that has added value to fund byk by -- his 2100% since march 2015 on commodity futures/ ?> tha >> that raises my hackles immediately. i really would like to have a good look why is that. angie: it is curious. .heck out bloomberg it is the story everyone is reading today. good to see you. >> thank you. angie: as usual, it is
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absolutely fine. match,up, game, set, japan at the u.s. open. we are not talking about tennis. details are coming up next. this is bloomberg. ♪
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angie: welcome back. i am angie lau. you are watching "asia edge". we will be watching for first quarter earnings from tata steel. it is being driven by demand from india. the company has been switching its focus in the local market while battling production competition from china. releases august industrial production retail sales figures on tuesday. this time around, economists expect to see a slight improvement from the factory floor along with retail sales picking up a further 10% on the
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year. major tech companies gather for the tokyo game show virtual-reality, the theme this year ahead of the launch of sony playstation vr. smartphone game makers will be on the watch after nintendo's announcement that super mario is headed for the iphone. 1 circuit back, singapore grand prix. mercedes has dominating racing this season, winning all but one of the grand prixs. there is a new champion at the u.s. open, stan wawrinka beat novak djokovic. stan wawrinka claimed his first win at 31, the oldest u.s. open
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champion since 1970. year's u.s. open, the traditional big sponsors such as nike and adidas were left behind. all four men's semifinalists were wearing japanese labels , yonex ono, asics display. disclose whatlly i'm wearing. certainly we knew what people were wearing at the u.s. open. it is a lot of tv exposure. i think the smart bet is that we will see more of this in the years to come. has had great success and built a track record of taking
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winners in tennis to endorse, so their program will continue to get japanese companies exposure. yonex has a history in tennis of supporting more on the women's side, and now they have a big star with stan wawrinka on the men's side. they have a tremendous amount of momentum coming into the next season. how are they able to beat out the big guns like nike and adidas? stars, year, nike's big rafael nadal and roger federer both struggled with injuries. in past years, they were always making the grand slam finals, one or the other of them. beenthem out, it has easier for the newer brands to come in and take the spotlight. totally get it. all right, we will see if this trend continues on and off the court. thank you. live for us in tokyo. that is it for us on this
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edition of "asia edge". coming up next, second-guessing central banks as policymakers send ripples throughout the markets. this is bloomberg. ♪ stay with us. ♪
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angie: the global selloff in amids and bonds rumble on questions of the benefits of loose monetary policy. astension rises in korea seoul says the north is ready to carry out another nuclear test. plunges the most in four


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