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tv   Bloomberg Markets Asia  Bloomberg  December 5, 2016 8:00pm-10:01pm EST

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>> 8 p.m. in new york city. in hong kong, this is bloomberg markets asia. asia-pacific stops joined the post italy relief rally. the influence scandal and broiling some of the country's biggest companies. we have the bloomberg pessimist
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guide to 2017. 30 minutes away from the start of the trading day, singapore, kuala lumpur, taipei, let's find out. trading thatng the we have seen post-brexit and postelection, which is the initial knee-jerk reaction and we see a rebound that is really tracking those gains. and also the bounce and european equities as well. things stay with positive sentiment. australia ahead of that rba decision. the monetary policy.
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shocking comments that he would be stepping down. taiwan also up by 8/10 of a percent. very strong gains of over 1% there. bit coming through from southeast asia. is shaping up. the turnaround story of 2016 and going to 2017. they really made this call.
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it is about 1991. it looks like we're coming to the end of this losing streak. we are up about 12% today. oil, copper, zinc. this is the return of the space when it comes to gold. really an indication that the safe haven demand, what was left coming through. europe has also recovered as well. this is what is doing ahead of the rba decision.
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will be trading at 7.5 for the u.n. overnight. see what comes out and about 10 minutes time or so. we see the winners and losers. we see a little bit of a recovery rally there. in the japanese session, it is it is up by 2%. as well as general trading raised to a buy at goldman.
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>> a check of the first word headlines now. also deputy prime minister says he has the experience required. making quick politics altogether. he has publicly backed english to be the new zealand next prime minister. is ontire prime minister hold until parliament has approved a new budget. the president has now asked to stay on temporarily with the budget potentially going before the senate as early as friday. vetoed thechina have un security council resolution demanding a seven-day truce in the syrian city of aleppo. they were to allow access to besieged areas. there helped parts of the city when the defenses of buckled since russia's intervention and
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support of president assad. the syrian army ordered the rebel fighters to leave the city. or face death. they've accused the biggest shareholders of eroding confidence of the conglomerate. he portrayed himself as the defender of independent decision-making. overstepping their roles. the heads of some of south korea's biggest conglomerates, the bribes allegedly paid in this widening political influence scandal which has been engulfing the country.
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>> in investigative hearing, the nine heads of south korean conglomerate who will be up in front of lawmakers. this is very unusual. what they are going to be drilled about is the link to influence scandal that has engulfed the president. ,mong the leaders, the chairman and lawmakers basically want to know why tens of billions of dollars were given away to foundations controlled. it is at the heart of this scandal that south korea has really been rocked by for at least months now. 18 lawmakers doing the questioning. nine from opposition groups.
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asky question they want to will be, will they ditched the tables, give donations at the request. >> tell us about the allegations surrounding them. >> the biggest will be questioned. he's the vice-chairman. they have headquarters in the recent weeks. and the national pension service. outside.biggest have been under fire. it is hugely controversial. the group, they were
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looking at evidence on if they donated money to these foundations for duty-free business licenses. a range of allegations there. none of the nine table groups have been charged with wrongdoing. it has rocked the nation. it has impacted the president. >> new revelations keep on appearing. ,> as the investigation goes on we have seen the president has apologized several times for allowing the friend to metal in those affairs. resign andered to she is considering when this might happen. it may give a fourth national address.
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>> >> i would cement that view as well. that one piece of data is likely to cut .2% from gdp.
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no one is expecting great things from that. the signals to that effect as well, every statement seems to contain a warning about cuts to the cash rate and what it might mean for property markets. they deliver that famous line, we are not inflation nutters. the rba tolerating week consumer prices as well. the consensus very much is that we will see nothing from the reserve bank today and there will be nothing for january either. it will join the rest of the country at the beach over the summer. >> rba is not offering economic stimulus. the government will step in on the fiscal side and it will get some spending in that. >> the government seems more concerned with defending the aaa credit rating than anything
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else. there is not much political mileage to be made. it will be prudent with the budget. the government may be open to adopting a sensible long-term infrastructure policy. once the aaa rating is gone, it will certainly not be the end of the world. 19, the treasurer will update the budget and if the position worsens, the aaa rating may go then. it will be interesting to see if there's any change in policy. >> in sydney, talking about the rba and central banks across the
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world. markets areency expecting. we get a look at the risks ahead for the global equity rally. ♪
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>> having a quick check of the latest business flash headlines. morgan stanley, forcing to generate more revenue. bankberg learns the requires some brokers to raise revenue by 10% at the same payout of this year. the chief executive is leaning on the management division to reach profitability targets in the coming quarters. a chosen bhp for joint injured to reduce oil and natural gas in the gulf of mexico. the project will be located in
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the field south of the maritime border with u.s. bhp that receded a bit with an offer of $624 million. a 75 year monopoly after mexico approved the opening to foreign companies. tosuaded by donald trump stay in the u.s., they raise prices to stay competitive. carrier will increase prices for residential and commercial customers by 5% for the first of january. united technologies agreed to , saying that they would move operations to mexico. declines in the immediate aftermath of that italian vote against constitutional reform. isef market strategist, he -- it's amazing how quickly we
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came back and it was just shrugged off when you look at the euro. as one hedge fund manager put it this morning, the brexit vote took three days, the u.s. election took three hours, and the italian referendum took three minutes for the market to reverse its position. is a v-shaped016 recovery after a risk event. be a slow burn nonetheless because the atoll he and banks is certainly not out of the woods. poses systemicat threat to the european banking system. >> there are still concerns. about the whole banking system. ,he loans by some estimates they are not performing.
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most estimates are below zero. while it is certainly very concerning in the situation is ongoing, it is not new news. systemic threats appear to have been largely dealt with by the ecb actions. we can never rule them out but the chances of it spreading across europe given the awareness of the issue is lower. >> it is actually the central the most at 6.85 as opposed to 6.88. does it tell you anything of let's's going on with the dollar? >> i think it is speaking directly to the u.s. dollar. they are very much about keeping pace with and appreciating the u.s. dollar. no surprise to stratus -- to see strength of the u.n..
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>> take at least two weeks holiday away from the markets. it is just getting a bit jittery out there and we will have a lot of volatility. >> i learned this one the hard way. six months without taking a day very ill.ended up we had a year like this year and we roll from one event to the next with barely a moment to pause for breath. you might not notice it if you are market professional, but without taking a couple weeks off every six months, you put your health in danger and nothing is worth that. your two weeksve holiday, you still come back and look at the new zealand dollar. they are calling them asymmetric exposures.
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>> exactly. there has been a lot of working. the anticipation of a political problem there. the impact on markets in a much larger way. given the potential for volatility, asymmetric risk exposure looks like a no-brainer for 2017. they market and the option prices. against other assets. handily.ay off very >> is that the trade you are looking at as we had to the new
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year? seng atooking at hang the moment. is 12 and a half carrying a significant count but has never occurred. the next week or so, they look for a drive for the highs. >> right in a moment. barbarians and robbers, just two of the words. that.ut more on ♪
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>> the market ended about three minutes ago and it looks likely will have enough to fall on relief across the globe there. .9% is what we have it at the moment there. the the asia-pacific index. regulatorp security will be against the -- officials figure thisying to out. particularly harsh words coming from the csrc, calling them robbers. >> 30 colorful language from the chairman of the regulatory commission. for highm at companies yields at short-term debt. buy stock in other companies. they have one of his juicier quotes to read out for you.
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by using improperly obtained money to conduct leverage acquisition, you've gone from strangers at the gate to barbarians and eventually, robbers of the industry. the chairman also said that the acquisitions showed the decay in humanity and commercial morals. simply not pulling his punches. more jury statements we are used to getting from chinese officials. >> it must've been some capitalist. >> it will risk the stability of the markets on top of the agenda. it does come.
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and that prompted and was on the back of comments from the stock exchange saying that we are monitoring the acquisition from the insurance unit. but he's not the only one. it's also part of a three-way tussle. 24% using money. sanford bernstein saying that they do pose a large risk. the leverage acquisitions, that is why there is such concern amongst officials. we see these companies raining back on something that could
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pose a threat to stability of the markets. >> we have got, coming up, five years of pain. relief could be insight. we have a look at the prospects. ♪ generosity is its own form of power.
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visit an xfinity store today and see for yourself. xfinity, the future of awesome. >> 9:29 in hong kong. eoul. in soeul top of the country's tycoons, including the heads of samsung and hyundai, being president park's influence scandal. it has engulfed the attention of the nation. it could be the country's biggest ever parliamentary hearing, looking into the so-called
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conglomerates. boss comed samsung's on and be questioned as well. he has apologized for causing public concern as he faces questions coming from parliament. we have the hong kong open. we have the shanghai open. let's see what is going on. a global relief rally is on. aidi: that is what is at play. the pattern we have seen over the past few sessions where you had that selloff. a bit of a knee-jerk reaction followed by the rebound. a lot of analysts say we could extend trade that any kind of pullback you see ahead of incidents ahead of the tie-in referendum. shanghai opening lower.
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slightly stronger coming through from the pbo see but nothing earth shattering. 0.08%.i down by we have it trading close to highs in january, coming back from the selloff when the bank of japan went into negative interest rates. we have a yen that is slightly stronger. across the region, we are seeing a lot of buying. political uncertainties still hampering selling their. well,trauch's are doing with the shock announcement of the prime minister announcing his resignation. we are seeing a lot of energy names doing very well today. material names, some of the mining as well after a two-day
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selloff. of ave oil falling off 16-month high but we are trading at high levels after this supply cut deal by opec. this is what we are seeing in terms of the sectors. a lot of sectors doing very well. a little bit of weakness across oil and gas. industrial at tech, and consumer goods are very strong. a quick check of where we are sitting at dollar-yen. ,e had a nice session overnight the yen now trading at 113.70. we are now seeing a little bit of a rebound in the early asian session when it comes to gold. it had fallen to lows we had not seen in about 10 months. it is shaping up nicely. a lot of investors buying following the events of the weekend. rishaad: let's get you up to
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speed with some of the first word headlines. going back to the hearing taking place in seoul were something country's biggest names are being questioned by parliament about the influence scandal by president park. hyundai, samsung, and six others are asked about tens of millions of dollars paid to a close confident. there are enough votes to impeach. limit oil to production have been hit by three african countries boosted output. like jerry and -- nigeria and libya also hosted output but they are not bound. and youtubecrosoft, are criticized for not doing keep terrorists
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away. they say it is a unique cash for each piece of content. each will have its hash checked and will be removed if it matches one stored. the eu is putting pressure on greece in order to ease its debt burden. there are steps that could reduce greek debt by 20 percentage points relative to gdp by 2060. the greek finance minister calls the move more ambitious than expected. the imf says they will not put greece on a sustainable pass. 600s -- 2600 journalists and analysts working in a hundred 26 countries. relief could be in quality balls. it is set for its first annual gain since 2010. as gluts ease for many raw
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materials. let's get more from alex, our asian commodities manager. what is behind the resurgence in this particular sector? alex: good morning. it is often said about commodities that the best cure for low prices is low prices. that is referring to the cyclical nature of the market. shen prices drop, supplier respond by cutting back investment in new product. when supplies dropping, demand is picking up a net pushes prices back up. that is part of what we are seeing now. there has been a producer response across the market and that is putting a line under the collapsing prices. we are seeing a rebound. rishaad: indeed. there must be some that are doing better than others. who is standing out? is up a whopping
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72% this year. of a broader rally in industrial metals. isre are signs that china going to boost spending on infrastructure. that is going to increase demand and general economic stabilization in china, which consumes more commodity than any other country. there is oil. oil hit a 16 month high yesterday on those opec cuts. non-opec members are going to join in the cutbacks. rishaad: thanks very much for that. alex joining us from singapore. we are looking at japan's slumbering economy. dealt a trumpg card. sincen is highest december 8. anna curry is with me now.
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how will donald trump make japan great again? >> at the very least, he is setting up pales for japan. he is expected to drive demand there. that potentially means highest -- higher interest rates and a higher u.s. dollar. morecould mean sure -- japanese imports on services and america needs. donald trump has managed to push japanese yields a little bit higher. that is what the boj once. it seems that donald trump is having something of a positive spillover affect on japan right now, which japan will not turn down. rishaad: it must be other factors. enda: there are others for sure, and one of the big ones is opec. we saw that agreement last week.
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a deal for the first time in eight years to constrain supply. that will push up oil prices. lower energy rices has been one japaneseg breaks on information. now we are looking at potentially a major stimulus. rishaad: that is not given with the core issue at the end of the day. enda: we are looking at the potential of stimulus from its biggest trading partners and energy import cost. that is exactly what happened. i would not say it is any more than that. rishaad: right. 10 years at best, anyway. any risk? enda: plenty of risk. the dollar rally could be overdone. there is much talk from donald trump is actually happening. the infrastructure is difficult to execute. it does not go the way the market expected, the yen could continue to rally. --haad: we could be taking
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they could take a step closer to legalizing casinos. tuesday. will take on wise japan doing it now -- why is japan doing it now? >> this is a bill that has been on the back burner for several years. the reason why it is coming to a head now is because of the number of tourists that are coming to japan from china. we have millions and millions coming in each year and the government is anxious for them to keep coming to offer new attractions. the reason it has been blocked several times in the past because there are public concerns over things like gambling addiction and money laundering. not only among the public, but among prime minister abe's coalition party. that is a buddhist-backed party and many members have moral concerns over having casinos in japan. rishaad: in a land which is
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dominated by pachinko parlors, there is a lobby there, no doubt. the point is who was to benefit? how long will they have to wait? isabel: it is still a little bit unclear. we are expecting the bill to pass in the lower house. it has to go to the upper house in parliament where it will go through the committee and through the plenary session of the house. that could come as soon as this week, but far from certain. after it has passed, we need to have a second bill to set further regulations such as important issues like whether japanese people will be allowed to go into these casinos and that is expected to be completed in a year. we are looking at more than a year before final preparations can be put into place to have a casino in japan. the beneficiaries, we have already seen some in terms of rising share prices. japan cash machines have
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benefited from talk of this bill passing because they make machinery that could be used in casinos. we have seen the big casino players, the global players like mgm resorts. they have said they are interested in investing up to $10 billion in a resort in japan. that potentially could be a huge benefit for whatever the venue is. it could be local,. it could be oh soccer. we don't know. -- could be yokohama. it could be osaka. we don't know. rishaad: breaking news out of seoul. we have the moment that the samsung vice president is talking. this is li jae yun. foring about, he apologizes public concern. he did provide a $1 billion roy.e to the daughter of t
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she is the woman who is at the heart of the presidential influence peddling's scandal taking place in the country. he did not make a dough nation in return for any favors. he went on to say they have nothing to do with succession in the country. that is what is going on in the moment. that is what we have at the moment coming in from seoul. those are live images of this parliamentary hearing taking place. we will keep you up to's plead -- up to speed with the advice. the ecb looks at barclays.
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you are back with bloomberg markets as we check in with what is going on in the forward exchanges and the on. -- and beyond. haidi: i want to take you to some of the losers we are seeing . some of this news coming through tensionsential further on the korean peninsula. report saying south korea saying the north may have hacked at cyber command. we are seeing a little bit of a rally across contracting names. these are names that tend to spike during political tension. we have seen the like of korean aerospace. ony have close to a monopoly fighter aircraft in that area. they have seen gains over 1%. of close to 2.5%.
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they make tanks and the like. reacting a bit to the headlines of a purported hacking reported by south korea. it is a generally positive market across the board. upongest gains in taiwan, 1.2%. the tech area had been battered the last week. it is bouncing back from the selloff that we saw in the wake of the italian referendum. anxiety, if you will. let's look at hang seng. the dollar index is meandering. not much conviction. the kiwi dollar trading at 70 1/5 the three -- 71-53. the prime minister announced he would step down.
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euro-dollar is holding. flat at the moment. about 0.25%.g returns out of the bank of australia. we are seeing a little bit of loss in the aussie dollar. 0.7455 for the aussie. rishaad: it amazes me talking about the euro. we have those three-week highs against the dollar before the meeting. let's talk about this italian referendum. it was front and center for the market. it has largely gone away. you say a no vote could possibly be one of the worst outcomes for the market. it is seemingly a very big margin and it is no. we kind of shrugged it off.
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why? >> it is a good point. taking a broader view of the market, it is not particularly good for a time banks were italian credit -- good for italian banks or italian credit. it is similar to what we have seen in the past with the brexit reaction, the post-trump reaction. advertising risk. i think the euro rally is going to run out of steam. meeting this week which will have influence. it is not good news for the euro. it is not good news for the ability of the european union to keep everything together in terms of its stance towards extremism. while this may have seen an advance in the euro, i don't think it will be sustained in the coming weeks. targeting moree
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downside. it is the path of least resistance, isn't it? mitul: it is, and i think the other side of the going is the dollar. we have had a significant backup in u.s. yield. the market is pretty much fully priced in a fed hike this month. we think the fed could hike twice next year. in terms of yield, a little more upside. we will be in a firmer dollar environment. when you add the fact that you will have continued political uncertainties in europe, admittedly it depends on how the election in germany pans out. that will be quite important as well this year. you have the implementation in the u.k.. there are a number of issues in europe. the dollar looks pretty good. least resistance in the euro is very much on the downside. rishaad: with the focus off
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events in italy, where is the focus now? , thet the rate decision rate for the fed is pretty much sure going to happen. is that where people are paying attention, to see how many rate rises we get? mitul: a lot is priced in. if we look at the fed this month, if they do a -- if they do know hike, it will be more of a shock if they do. we are looking for two hikes near the end of next year. if the new u.s. administration starts imposing tariffs on the mexico, youna and will see some negative impact on the u.s. economy for the first half of the year before we start to see the positive impacts of fiscal stimulus kicking in in terms of growth. there will be later hikes next year. that is not priced in and i
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think that could give the dollar some support into the next year. i am cognizant of the fact that the u.s. yields have moved a lot. perhaps at the end of the year, the dollar will continue to tread water rather than make gains. we talked about the euro. the market is short for euro. a lot is priced in. i think the euro will go lower. emerging-market currencies. what about them? are they likely to suffer more? thingsople suggesting like that, even some of the equity markets. this money start trickling back into them? if so, what is the impact? mitul: i think, emerging markets, especially local markets have been hit significantly in the last few weeks. the move in u.s. yield has been a hard blow for e.m. year, youing to next
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may see a little bit of respite. we may see capital flows return. the assumption we will not see u.s. yield move anywhere near as aggressively as we have seen in the last several weeks, and that will give a little bit of respite to e.m. they will not be out of the woods. there is a lot of concern in terms of the impact of tariffs, etc., on a lot of emerging markets and how that will pan out. with u.s. yields higher, e.m. high kerry looks less attractive. we will not see high-yield do as well. it is a cautious view that we have. rishaad: great talking to you. new year, new president, new uncertainty. we are running through the pessimist's guide to 2017. ♪
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rishaad: 2016 has been bad. brace yourself for the coming
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months. bloomberg has compiled the pessimist guide to 2017. it looks like there could be as much chaos as the last 12 months. i'm guessing donald trump may have something to do with this. david: it depends on how you look at it. some people may have called it the optimist guide last year. what did we get? brexit and donald trump elected. it does depend on what side of the fence you are sitting on. there are things that could go wrong in 2017. they can go wrong under trump. we have done -- it is a tongue-in-cheek look at the pessimist guide to 2017. they are not predictions. rishaad: and gula merkel losing -- angela merkel losing could be one of those. le pen winning in france. with what could
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happen in january. david: on the 19th of january, inauguration day, that might be askday donald trump and enactsstep -- an act -- fiscal cinemas. he could also start rolling back the legacy of barack obama. we could potential have all sorts of social unrest in the streets. that might cause donald trump to actually go out and take emergency measures against any sort of violence in the streets. you could get curfews and some american cities. then there is what could potentially happen in california. some people are already talking about california becoming the center of resistance to trump and maybe there will be a term called calexit we hear about. these are just some of the things we hear about about what could potentially happen there. we also have a look at markets
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and how they marry. rishaad: thank you so much. we are running out of time. looking at what is coming up. cableestioning of members. ♪
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rishaad: 9 p.m. in new york.
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i am rishaad salaam, coming from bloomberg asia. this is midmarket asia. ♪ the biggest companies are grilled about the wedding political scandal. strangers and barbarians. some harshular has words for them to emulate. >> a big able for economics.
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japan is going into casinos. the something they emphatically reject. they're just joined the fray. a seven laquon was going on. >> we are really tracking these gains. we her them hitting fresh record highs by the end of this year. that is reaction to this referendum. the follow-up that we saw that seems very much in particular to japanese markets. this was a buy close to 1%. it was up by just a half a percent. tradingic benchmark is in january highs. this has changed in sentiment. they went into negative
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territory and came down very hard on the banks. interestingly, they are driving the rally that we are seeing today. this was up by a tense of 1%. we are seeing oil energy doing very well. display prices coming back up. they are taking a bit of a breather. energy stocks are coming back up after two days of complying -- decline. was marred by political incentive when it comes to new zealand. this is one of the top gainers in the session. up by about a 10th of 1%. china is looking a little bit quiet. we are in a tightening phase. we didn't have a really great take up when it comes to the first day. whetherke a look at
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they gradually begin to improve. we are taking a very quick look. this is what we are seeing. the aussie dollar. we are not expected to move on monetary policy. a our demo 3/10 of 1%. the euro was the big story yesterday. the are really holding gains that we saw. that is up by 1%, coming off of those 20 month lows that we saw following the events. back to you. the heads of some of the biggest conglomerates are -- rather than having a look at this hearing which has been well underway, they sent been going on for about an hour now. what have we learned? he apologized for causing public concern and he also said -- rovided is go back and discuss something
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else. eventually, these are heads of tables. andn front of lawmakers this special investigation hearing. essentially, to be grilled about their links to an influence peddling scandal. these have included some of the biggest questions. does to name three of them. the first time a lovely has have been able to give evidence of parliament. it will make them want to know the key questions. why tens of billions of dollars were given away. he gave this one $850,000 was. >> he said that he did not make
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an early donation and turned for favors. -- in turn for favors. recall when he got to know the person who's daughter had a horse. this was a big and rather controversial merger. andent against the bushes the activists. this merger did tighten their grip on the group. he said it had nothing to do chairman.ormer rishaad: tell us a little bit more about the allegations they face. >> one of the key questions facing samsung is whether this government can help us through this controversial measure.
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let's take a look. this is the biggest pension fund. it supported the merger. even against the wishes of the active shareholder. it has been under fire for supporting it. there has been a lot of controversy surrounding that merger. there have been investigations into what groups are doing what. they are looking for donations that may have gone to the ecb foundations. they had designs on what they are doing. this is what they are looking into. these allegations. none of the nine table groups have been in charge with any wrongdoing. no doubt, you will be monitoring. thank you roz.
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57 and coming seeing absolutely no chance of a change. we just had a better than expected series of balances and payments. that means that this lack of movement is certainly a done deal. >> yes. more evidence that they -- the rba is not going to do anything. expecting 13.5 alien -- billion. it may be a drag on gdp. those numbers are due out tomorrow. 27 economists surveyed picked 1.5% for the rest of the year. they were dropping hints and successive statements. it is the concern that lowering
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the case which would further inflame the property markets. rba are willing to tolerate low index -- inflation as well. there is a meeting in january. we won't be seeing any action until the first tuesday on february 17. rishaad: if the rba isn't offering of any economic stimulus, when of the chances that the government may come and and some in the form of fiscal measures. ? not great. this is something that the reserve bank has been hinting at four months if not years. there are limits to what they can achieve. is time that the government did something. right now, the government is not more preoccupied. making sure that it does not lose that aaa credit -- aaa credit rating.
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we do have a number of economists saying that it could be quite liberating to lose that aaa rating. as he says, the government might be more open to adopting a sensible long-term infrastructure program. that could be potentially wasted military. we are seeing from experience with the u.s., the u.k., the state of queensland, they have all lost their aaa rating. we may have a catalyst for that happening on december 19. the government will release its budget update. -- rate isthe rate move that way. let's get the first word news. -- financeance bill minister bill english. he has healthy finance post since 2014. he is the deputy prime minister. he said he has the experience required.
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he will step down next monday. he says that he is not a career politician. he is looking to be new zealand's next prime minister. the italian prime minister has been asked to put his resignation on hold until they approve a new budget. he said he would step down but they rejected his referendum on constitutional reform. this will be going before the senate as early as friday. one of india's most powerful regional leaders and movie stars has died. reporters say that she was becoming an economic powerhouse. her critics accuse her of corruption and establishing a personality cult. coming up on the show, korea's
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biggest company has been questioning their dealings with the president. emerging-market bonds are in something of a crisis. we will have experts give their take. ♪
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♪ rishaad: a quick check of the latest prices. the carrier will increase prices. the first of january. it is apparent that united technologies agreed last week to keep $1100 -- jobs in the indianapolis shot. they know it is moving operations to mexico. india's talented group has accused their biggest
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shareholders of -- investors asking for support in a series of general meetings later this month. he is accused of overstepping their roles. his removal is in october. morgan stanley's tight incentives are broken. they are forcing to generate more revenue and taking a pay cut next year. they learned that the bank state compensation plans. they required some brokers to raise by over 10%. james gorman is leaning on the wealth management division to reach profitability targets in the coming quarter. let's look at our next guest. he likes emerging-market debt. he is the deputy head of emerging markets. thank you for coming in. tells about the opportunity in a broad sense. -- wethink that
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acknowledgment in the short-term, there may be some volatility. emerging-market data has been under pressure. 2017, bothok at forehead currency and local currency debt, we're seeing occurrences are cheap. the case for your hiking and emerging-market is pretty strong. are you talking sovereign or corporate? into 17, we think that em currencies are likely to do well. jose that they are likely to open. we going to have a
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report on this now. we will get back to you and come back. we're going to krista langman. ta: it is interesting to see. we have had a chat recently. the we are seeing is that ratings companies are starting to show indications that the trends for sovereign ratings is reversing. if you think about it, over the past decade or so, this is like the philippines went from single be to aaa. -- triple b. just recently, that reversed. they have started to be downgraded more than they are upgraded. saw 3.1 more downgrades of sovereign and sovereign related nations. entities in emerging markets for every upgrade. i'm including their outlook
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downgrade as well. it is just a reversal of trance. it doesn't put your driver anything that jc is saying. i'm pretty sure that people like him can probably pick their spots pretty well. rishaad: that is what jc is saying. you can pick your spots. there are opportunities there. what are people saying? anothere possibility of asian price or even a sovereign default? >> the other day, i was on a panel. i said do you see in emerging happening in the next year? he was adamant, he said yes. mongolia, you have been as well a. they are teetering on the edge. they avoided a very narrowly. people are saying that is going to have the next year. we're probably going to see of defaultser
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coming by and asked year in emerging markets. whether that will lead to the kind of place that we saw after the default of russia and argentina, probably not. it is just these small so the nations. if you see a bigger sovereign nation, you can see another asian financial crisis. activity much be monitoring there. rishaad: i know you couldn't hear them but he was talking about the possibility of there being smaller countries. perhaps mongolia. a bigger one than that is likely to happen. >> it is very unlikely. would you look at them, there is much better shape.
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there is currency mismatch. it has been massively reduced. i agree that your some countries are smaller markets. they could be under some pressure. maybe in asia and also in africa. there are big boss from one of the large market. some corporations under pressure. both in asia and latin america. over all, that is something that remains very low. rishaad: exactly. what we were talking about strength hasollar come from outflows. i guess that throws up more opportunities? >> of course. he can add a negative impact. i told you it is a risk.
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you could have some currency mismatch. you could have some currency mismatch. it is very selective. maybe you can have some risk in some mexican culprits. you can have some in indonesia. overall, we are pretty comfortable. these traits should be put in much contained. side, it is a potential downgrade. they are not showing any strong improvement. they are already pricing. >> some of this is going to be based on what happens with the u.s. next year. what is your thinker there? it all depends on
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communications. i think that we should be ok. we don't see any risk of a massive set up. with that,mbined some --why we do expect or. -- 2017, he could do well. rishaad: the donald trump presidency could play a role. it will not be a surprise if donald trump is starting. there are some negative comments on mexico. it is already out there.
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for me, i am not saying that there are no risks. the risks are only pricing. i think it is quite significant. last question. >> we like asia. you are still aligning in asia. we had some market h in there. -- market was very i think markets are reducing in indonesia. very competing story. rishaad: thank you very much.
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next, we have depositions coming under scrutiny. china is cracking down on their growing risk to the manager system. we will have a debate, coming up. ♪
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♪ security head's has been railing against surges. mackenzie has more on this. harsh words from the cdr see here. some fiery comment of the chairman of the china regulatory commission. it was really targeting his companies. short-term, from high-yielding debt.
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they use that to fund their leverage to buy stock and other companies. quite often, they are rivals. we have one of the juicier quotes that we can put on the screen. i will read it out. he said by using and properly paying money, you can go from strangers at the gate to barbarians and eventually robbers of the industry. the chairman went on to say with these acquisitions, it showed -- o -- retro graseck it was commercial mortals. some pretty strong words. the words that have been followed by action from the accounts and the insurance regulators who at the end of the day yesterday imposed some life.ctions on one of the insurers that is part -- part of the down on group. they weren't sticking to requirements. some strong words from
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regulators. also some action as well. they see heightened risks around the acquisitions. there must've have been a cause. there must have been a reason. there has been some growing asked around these leverage acquisition deals. we saw just if you read -- weeks ago, they are upping their stake. the singin stock exchange has said that we are moderate your scale -- sale. they also used funds they get from fund managers, stockbrokers that are linked to high-yielding products. they are buying stocks as well. there is concern that we heard from one of the analysts. the risks are large. that is why we are hearing these local comments from regulators. now, some concrete actions. rishaad: thank you for that.
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tom mackenzie there. this could shift the balance of asian casino industries. details are just ahead.
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strong and secure. good for a door. and a network. comcast business. built for security. built for business. ♪ ♪ >> you are looking at live pictures here. admitted buying a horse worth with an $850,000 for the daughter of the president's friend. he denies making favors. south korea says that the north may have had decisive command. he says that the internet server has been contaminated with
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malware. an unidentified official says that military documents including confidential information has been compromised. they were hacking passwords and it was from ministers. al gore is speaking with our trump about a topic. close to his heart. in 2012, trump famously said that the concept of global warning was created by china to make american money less competitive. withe bulk of the time was the president-elect donald trump. i found it to be a extreme interesting conversation to be continued. i will leave it at that. thank you. >> russia and china have the toad a resolution. allow them too
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the cease areas. antigovernment forces have held this since 2012. on sunday, the syrian army ordered rebel fighters to be the city or they staff. global news, 24 hours a day. i'm rosalind chin. this is bloomberg. rishaad: let's get straight to the markets. heidi is having a look at that. it is that time of the day. >> we are seeing a very quick recovery after the initial seed -- knee-jerk all off. we have some anticipation ahead of this. we are really looking at some of this return when it comes to
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asian markets. they have a slightly weaker yen than the overnight session. that is helping out. we are seeing very strong buying into energy materials. take a look at australia. this was one of the biggest gainers. we see gold falling to a 10 month low. that is an indication of how the safe haven demands we see in the markets. this is one of the biggest gold miners. this is a great session when it comes to the china markets. shanghai is looking a little flat at the moment. the hong day to for kong stock connect. you take on that has been pretty subdued. not the big bang launch that we were hoping for. hong kong is up by a tenths of 1%.
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a little bit of meandering trends when it comes to southeast asia. singapore, the philippines have gained just about a 10th of 1%. back to new zealand, we have that rocket session from yesterday. he said that he was step down. with someome off pretty modest gains. in terms of the picture of a second breakout, can see every sector. we are looking pretty good at the moment. the asia-pacific is up by 1%. in particular, pretty strong gains coming through. we are back into these trump training. thanks and stuff are seeing these. before i look at what charges are going on. they are coming back strong after pulling to the 20 month low. it is holding steady ahead of debt ecb decision. we are moving into positive territory there.
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is saying there interestingly that even though we have not seen this fast recovery. it is a sign that greater turbulence is here to stay. rish? rishaad: after five weeks of pain, a commodity could be inside. it comes as the man grows. alex.get more from what is behind the resurgence and we are seeing? seeing?gency, we are drop, producers come back investments. it is picking up because of
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those low prices. you're seeing a rebalance of the market. after five years of price decline, there has been some producers reacting. the man is picking up. drawn oneing a line the collapse. the pickup is occurring in metals to energy across the board. looking at what is going on today. i am seeing how they had a great run. i think you are telling a earlier that. >> that is right. zinc is up a whopping 72%. this is because the producer response that we have are. there is speculation that china will boost spending on infrastructure. there is going to be a general pickup in demands for these industrial metals. that is lifting that asset
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class. you also see oil. they are paring back a little bit today. that is after the opec decision. another producer, led cutbacks. it is causing a pickup in prices. rish? rishaad: just mentioning the prospect that china does do something sustainable. what are the people telling me. what are the analyst saying about where we go next? >> goldman sachs thinks that the next year, this trend will continue. china', group -- china's economic growth stabilized. complex istural
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dancing to the beat of its own drummer. it has its own dynamic. we are seeing high stockpiles. it remains to be seen. of course, just like low prices prices, particularly in oil for example. prices rebound. it is going to produce a response. while production will come. that can keep a cap on prices. rish? a look atet's have what is going on in japan. they could be taking steps closer to legalize casinos. we have polymer -- parliament considering it. why now? the reason that japan was to have casinos in place now is because it only has millions of chinese tourists coming in every
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year. they want to make sure that it monetizes the effect of their arrival. that theyto make sure make repeat visits to japan. this could be an added attraction to the average chinese taurus. we are expecting the bill to pass this afternoon. it could possibly go on past the upper house as it is this week. nothing is set in stone at the moment. it has been a controversial bill in japan. people this week shows that more than half of japanese people are against the idea of casinos in japan. prime minister of japan says they have more objections. that is why it struggled. they could possibly continue. the other thing is who could benefit, how long will they have to wait? passed,the bill has
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there needs to be a second bill put in place. that comes from the regulations japanese citizens and whether they can go to the casinos and use them. that's supposed to be done within a year. we still have little word yet. start to move immediately. we have artie seen some beneficiaries. such as the company. also the japan cash machines. they have gone up on speculation that they will be providing sugary for these kinds of casinos. obviously, the date at the national players in the casino have seen speculation that they will invest up to $10 million. this'll be at places like mgm resorts. the town that post these resorts could benefit enormously from a large amount of investment. we got to where the press was going to be.
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it could be it also some places. there is a lot to gamble forth in his legislation. rishaad: thank you very much for that indeed. coming up, we have south korea posco corporate giant. they are under attack for cozying up to the friend of a president. we will be hearing why our next guest is the scandal is different. ♪
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♪ rishaad: some of korea's biggest countries are inundated with scandal. questions about tens of billions of dollars of debt that need to be paid to the president paul's confidants. these tables have many weaknesses that can be used against them. he is in singapore.
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he is a u.s. professor. thank you for joining us. what is this trial really about at the end of the day and what does it tell us about the state of the south korea corporate world? this is not a trial. this is more about a hearing. this is about the donation. it was set up by the chairman. -- contributions. does is go to the heart of what is going on in corporate korea? how corrupt the and what is to be done? -- how corrupt is south korea and what can be done?
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>> you may be confused about what happened 20 years ago. the president of the time, they did it differently than they did it now. it is a cleaner society. it is for a good cause. -- with the cultural foundation. this is what the large corporations are doing and korea. it is part of the corporate social responsibility program. do you know what happened? funds fromave some the foundation. case, theyticular are more like the victim. criticize them for any wrongdoing. >> i just want to get your view
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year. the samsung vice-chairman is at this hearing. he has admitted to providing a -- billion dollar course $850,000 horse to the daughter of the friend. does this go back to the habit of giving money and getting political favor? >> we don't know if there was any political favor in return. they are all large. they have to contribute money to the cultural foundation. there is a potential issue for the political favor. there is probably some country with a whole expensive setup.
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i do not see a particular link. some have been supported the football team. also, the horse riding activities. they are supporting culture and the program. about the tables weaknesses. they had inherent weaknesses as well. tell me about those. just to get a better understanding of these family conglomerates essentially. >> this is a succession issue. in korea, it is almost like a 50% inheritance tax. know, they have been putting money throughout
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society. they are asking the top expecting who are very strong leadership. the are all going through successions. -- if theyly hair they could bex, going to the second and third generations. there could be some suspicions of the activity. it is part of the weakest point. vice-chairman was there and he said that the president asked for much support and sports and culture. is she going to get something in return?
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is the point. >> i think they are looking for a special prosecutor who can investigate the incident. big money for the big favor. the president probably asked for the general support for the activity. the chairman may have a great to do so. even the president herself maybe behind this. tell me something, what is the future of these tables? some said they should be expanded. what is the future here? i think that they are
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completely mistaken. the world-class company. the technology management. what you have to do is more strengthening. room toere should be a pass the control. for example, a family transport requires a family trust. is a more clear way to pass the ownership to the following generation, i think there are many updates. after passing the ownership to the following generation, i think that they really need to
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think about the control. maybe family wealth. maybe going to the following generation. the actual management and the job for the ceo has to be done by the professional manager. final question here, do you think the system will survive into the future? do think it will work to the future management of these conglomerates question ma -- conglomerates? >> i think the system has changed from the first generation to the second. i think this table system may not be exactly what it used to be. in the future, the table system may be -- maybe the control will be loosened. they may be more professional management. maybe the family will only share. -- on the share.
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instead of leaving the job to the ceo rishaad:, maybe a professional manager for the future. thank you for joining us. up next, we will be heading to mumbai. we will be looking at the deaths most powerfula and controversial leaders and what it means for the country. ♪
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♪ rishaad: up ahead, and you will be updating us. next hour, a survey by bloomberg predicts how they will change the cast rate. but we get direction on rate cuts on the horizon? we will have more questioning as they continue to be under the microscope. after he and lawmakers grill those cheeks include the has of samsung and sunday motor. we will have the latest there. with a roll of the dice, next to japanese casino legislation bringing gambling was step closer. we will see how they are doing in the stocks. back to you. one of india's most
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powerful region leaders has resigned. that she made say the state an economic powerhouse. she has critics who accuse her of corruption. what is the legacy that she leaves behind? politics, thedian regional leader has passed on after 75 day battle in the hospital. someone who started her like in the movies as a superstar. she went into the world of politics. she grew to become one of the most high, if political figures that have ever seen. extremely popular. someone who has run a tight ship. an iron fist of administration. this brings down the curtains. she is one of the most important leaders in south indian politics.
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it creates a huge political vacuum. was asacy chemise behind a tight administrator, extremely controversial. there were many cases of corruption against her. economic policy. powerful in a liberalization and allowing enterprise to flourish. on the other hand, it is a lot more important in wealth and economics. she came up with the real me -- three meal scheme for
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children in school. rishaad: doesn't change the political equation? it means that this creates a huge voice. politicalnow what the allocations will be. we'll know what is going to be. >> great talking to you. he is joining us from mumbai. let's remind you what is going on today. when it comes to equities, it is a big of a release. ♪
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♪ announcer: from our studios in new york city, this is "charlie rose." mark: good evening, charlie is away tonight, traveling on assignment. i'm mark halperin of bloomberg politics. cardinal peter turkson is one of pope francis's closest advisers and a man you are likely to hear more about. he will be running the new vatican office, charged with issues facing migrants, the poor and all of those in need. he is also the expert on laudato si, the pope's encyclical on the ++++++++++++++++dangers of capitalism in an era of climate change and global poverty. he spoke friday morning at the fortune/time global forum in rome. here is the conversation. ch

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