tv Bloomberg Markets Asia Bloomberg December 13, 2016 8:00pm-10:01pm EST
>> it's 8:00 p.m. in new york city. >> from bloomberg's asia headquarters in hong kong, this is "bloomberg market: asia." >> asia pacific markets build on wall street's record sharing reaching a one-month high ahead of the fed decision. >> that optimism comes from speculation the expected rate hike means the u.s. economy continues to strengthen. >> japan's business image improved in the first quarter
for the first time, but economics continue to struggle. >> and hsbc chairman says china is managing change extraordinarily well. he tells us what he thinks of trump policies. >> indeed, that's going to be tracking markets, front and center, we have the whole federal reserve issue to be dealt with in the next 24 hours. >> there's a 100% expectation that there will be a rate hike, it's about what is going to happen in 2017. they say two rate hikes coming up. >> we can dive into it and see what we've got right now. the next rate hike possibly being as soon as february there as well. 86% chance of that happening after this one which is nearly a 100% probability of the high taking place there. fed pretty much front and center. >> seems like it's going to be normalizing.
we are 30 minutes from open in china and hong kong. singapore, taiwan, just coming online. heidi, how are the markets looking? >> we're looking a little bit mixed at the moment. tokyo shares falling into the red, extending losses over the last couple of minutes down by a quarter of one percent. we do have a slightly stronger situation happening at the moment. still, not surprising we didn't have that improvement in business sentiment that came in better than what we were looking for last month. this is what we're seeing elsewhere around the region. strong gains coming through, up by .7%. year seeing an interesting otation. health care, utilities doing well today, basic materials falling, we've had declines overnight in iron ore and steel, that's driving materials stock lower.
taiwan also doing quite nicely. let's take a quick look at the currency situation. we are expecting -- traders are expecting the u.s. dollar to hold steady going into the fed decision. we might get some moves as the press conference, but so far a little respite when it comes to currency markets. we're also seing the aussie ollar looking like this. >> thank you very much indeed for that, heidi. >> let's get to the news. >> thank you, sophie. australia's mccory group is leding a $5.5 billion takeover bid, topping an offer. they said the consortium is offering $3.40 australian per
share cash plus a share in a new wagering company that may be spun off that i say it hasn't formed a view on how the offer compared. legal casinos are a step close for the japan after an upper house committee approved new legislation. the bill is now expected to pass a final debate in parliament on wednesday, opening the door to potentially billions of dollars of investments. however more legislation will be required before any so-called integrated resource can be built -- resort can be built, meaning none is likely to open in time for the 2020 tokyo olimp exs. johnson & johnson's proposed takeover of a swiss drugmaker is off. europe's largest firm rejected the approach but talks resumed when j&y raised the price to more than $250 a share. they were talking a full takeover but the company wanted to remain independent. the two sides have failed to reach an agreement.
india's decision to scrap high value notes sees inflation rising at the slowest pace in two years. they rose by a less than expected 3.6% last month as vegetable prices fell. signs of a prolonged slowdown ould push r.b.i. into rates. global news 24 hours a day, powered by more than 2,600 journalists and analysts in more than 120 countries. i'm tom mckenzie, this is bloomberg. >> we're look at manufacturers, these large manufacturers in japan, they're feeling a little more confident about business conditions. the biggest investment falling shy of expectations. >> we have the latest, give us headline figures first. >> right now we're seeing mixed data from the survey. confidence levels differing depending on how much boost you
get from weakening yen. large manufacturers are considered a barometer of japan's export industries. they're getting a huge confidence boost. take a look at this chart. you can see for a large -- that for large manufacturers, since the launch, their confidence level has soared. when the yen started to strengthen around the beginning of this year, confidence levels a little bit down. now that the yen, remember mast month, tropping the most against the dollar. since 1995, that will be the line right there. confidence levels now picking up, coming in line with estimates at 10, also improve from the previous three quarters when it stayed at six. another thing for nonmanufacturers, though, our confidence levels staying flat at 18. also falling from the june quarter when it was slightly better at 19. the outlook is mixed, the outlook for large manufacturers, business conditions will get better, not so much for nonmanufacturers.
but you mentioned capital spending. this is tricky because on average, companies are planning to boost by 5.5% this fiscal year, which falls way short of analyst expectations of around 6.3%. >> what did the survey tell us, they said, stuck in a rut still. now four years since that began, what's the report card rooking like overall? >> pretty mixed i would say. we saw the economy just plunging into recession because of that sales tax hike which was well intentioned to cut the deficit but then again, we're now seing a bit of positivity coming from a weakening yen given the new policy of controlling the yield curve. all eyes next week, what they will do if we continue to see weakening yen. that could be positive for inflation. but so far, the missing link has been capital spending. why aren't these companies
feeling confident enough to boost investment and our bloomberg intelligence team saying because of demographics, because of the fact that commodity prices are volatile. >> thanks so much for the latest on the survey. how about ja pan. rate hike on wednesday is what's going on with the fed, and two next year is what's expected to announce after the meeting. >> we could get expectations of a trump spending boost to the economy, that could change the timeline. katherine is in -- kathleen is in new york with more. >> done deal, slam dunk, whatever you want to call it, 100% odds the fed will be boosting the key rate hours from now by 25 basis points. a stream of fed speaker saying it's appropriate to hike rates now, put janet yellen in that camp in her most recent remarks. so data, better retail sales,
good numbers on the labor market, all these are helping. let's jump into bloomberg one ore time to look at #31 to to, as of a rate hike. look at the last few weeks since november 21, those rate hike odds at 100%. now, adding to this, a bloomberg survey of economists den by our team in washington suggesting the fed will continue to take a gradual approach to hiking interest rates. the economist survey see two interest rate increases in 2017. that's what the fed forecast at its september meeting. they don't even see a hike until june. if that's not gradual, i don't know what is. is there a risk to gradualism? a former fed bank president said there is a risk and former fed chair alan greenspan said you have to watch the labor markets. >> the labor force is running out of extra workers.
the unemployment rate is under 5%. you can't go very much lower, hich means that the 150,000 to 200,000 increase in payrolls a month is not going to continue on because we're running out of people. >> the fed will give us its latest view of the economy and inflation. it has a sum mear of economic projections, we last heard those in september. the december projections will be announced when the fed releases its policy statement. economy, inflation and the path to rate hikes next year, watch that more than anything else, does the fed signal anything more or less on rate hikes for 2017. >> as we're hear a gradual path anticipated but what about the expectation that donald trump will rev up the u.s. economy and cause more hikes next year? >> fed official saced so far they cannot base policy on what might happen, they can only base
it on what they see new. there's a surge of optimism on donald trump's election. the national federation of independent business, plans to hire, that's the white line. the blue line is expectationers in economy to improve. you see some improvement in their hiring plans, but boy, oh, boy, a 19-point jump on their expectationers in economy will be improved in 2017. i just want to add one more thing here really quickly. donald trump, he could be watching the fed chair with her remarks possibly. if you want to see what he has to say about the fed on the bloomberg, it's tweets from trump, go there and you'll see what he has to say. will he approve of more rate hikes or not? we'll find out about that and more hours from now. >> thank you so much, kathleen hayes, ahead of the fed decision. >> we saw former fed chair alan greenspan, you can hear from him later on bloomberg television and watch for our interview with ormer e.c.b. leader as well.
we'll have special coverage on wednesday, that's of course in new york, beginning at 1:00 p.m. new york, 2:00 a.m. in hong kong. >> still ahead, jo pan's corporate sentiment rises for the first time is six quarters. we'll talk about capital economics later in the show. >> plus rks an agency saying global oil markets will swing to a deficit in the first half of 2017 but only if opec follows through with production cuts. more with t.d. ameritrade next. ♪
real estate and utilities and the nikkei holding on to gains from tuesday, even the japanese core improved for the first time in six quarters. the cost pee slightly down there. - the kospi down slightly. >> production in november advancing 3.4% from the previous month to the highest since july. however, there was still not enough to overcome the industry's longer term slump. they were 9% lower than in the same time last year. >> china's state-owned oil company may consider an i.p.o. of its retail business, that could raise as much as $10 billion. we're told they have asked them to submit proposals this month for potential listing next year. they agreed to sell a 30% stake
in 2014 for more than $15 billion. they have yet to comment on any future listings. >> jonathan gray >> jonathan gray telling bloomberg television u.s. economic growth is likely to be higher under a trump presidency and that may justify high property values. apartments and hotels are most attractive to chinese buyers and he thinks the stake in hilton worldwide will look pretty smart. >> rate hike seems all but assured tomorrow but investors will be looking to the feds' tone and language to gauge the future direction of rates under president trump. they think it could support two rate hikes in 2017. >> chris joins us from asia. >> we've moved on now, already looking to 2017 and the narrative of how many rates are we going to get, what will be the state of the u.s. economy?
>> sure. thanks for having me on again. look, i think you've heard a number of different guests, it's a foregone conclusion at this point that we raise rates tonight here in the u.s. th almost 100% assurity, you look out, they're already talking about a rate hike for march or potentially june. but i think a key thing is, the fed is probably not going to change their dot plot for going into 2018. what we would anticipate is for there to be two more rate hikes in 2017. followed by the rate hike here tonight, which would keep the fed in line with their 2% inflation goal. i just, the big thing that is kind of the wild card that's still out there, is trump. trumponomics. like is he able to kind of stoke inflation to a point where the
fed is forced to raise rates at a faster pace in order to strengthen the u.s. dollar? a lot of unknowns at this point. i anticipate, for two more rate hikes in 2017, just looking at what data we have in front of us right now. >> chris, talking about the trump factor, we're seeing of course that rally on wall street, the dow, closing in on that 20,000 mark an banks a big part of that story. but taking a look at what's going on with the kind of exposure that money managers are obtaining here, is it too far, too fast? what kind of assessment are you seeing? i understand your clients are liking the space. >> absolutely two. of the key areas of focus are banking and energy. banking, we've seen our customer base across the u.s. and across asia actively trading across numerous banking stocks. now recently, we've seen a little bit of net selling across some of the larger banks like
citigroup, wells fargo, bank of america. but we've got to look at this as profit taking. when we go into the fed here later tonight, you know, a big key we'll be looking at, tone, language that we're getting from the fed, the kind of potentially stimulate another leg up across the banking sector. >> with the comments, of course that donald trump has made in the past, certainly not seing the love for tech, have we? we've got a tech conference going on in new york where he'll be present. do you think he can assuage fears here and is it perhaps time now to reverse the thinking and maybe become con trarne on that? -- -- on tech? >> i think we've gone a little too negative on some of the tech stocks based on anti-globalization rhetoric from trump. whether it's taxes or tariffs or different things, i mean, it's
not that we're going to become less technology driven throughout the next year. so maybe a little bit con trarne in terms of some of the larger stocks we've seen, intels and facebooks, we have seen our customers actively trading. since trump was elected on the eighth of november, we've seen a little bit of a maybe overcorrection on those stocks. so i would anticipate a little bit more normalization on those stocks kind of coming over the next few weeks. >> chris, is the party over for consumer staples? >> yeah, look, again, we have a lot of this rhetoric, trump is now a team that he's putting together, is this anti-globalization. sit definitely taxes, we have some of these large companies in the united states, like the wal-marts of the world, or coca-cola, a lot of their production and things that they sell are made outside of the
united states. so if he's trying to raise taxes, you know, on these particular things, it's only going to do one of two things. it's going to lower the company's earnings, or these companies will have to raise their prices. so a lot of, kind of clarity that we're looking for going forward, right now we feel our customer base shying away a little bit from the consumer staples sector and it's been net sellers across the sector here recently. for those who don't want to play specifically into the banking or finance -- banking or energy stock well, do see some heavily traded e.t.f.'s in x.l.e. and x.l.f. to get exposure across those sectors without picking individual stocks. >> if we don't talk to you before then have a merry christmas. >> up next, japan another step
>> what is it you'd like to have as your legacy? >> i'd like to be the oldest man that ever lived, actually. >> casinos a step close for the japan, this after an upper house committee approved new legislation. >> and the bill is now expected to pass a final debate in parliament on wednesday, opening the door to potentially billions of dollars of investment. let's bring in our tokyo bureau chief. what's happening? >> so the upper house today will meet in the main session and the bill is expected to pass sometime today. there is a slight possibility the opposition democratic party may submit motions to sort of delay it but it's basically going to be a matter of time before it passes.
and because the bill was slightly revised from the initial one, it will have to go back to the lower house, the main session, there, but again this is all going to be sort of very, very ceremonial and basically, it is a pretty much done deal that casinos will be legalized here in japan for the first time. >> right, where, though? where will they build the casino, and what are the next moves? i'm probably getting ahead -- ahead of myself there, so what's next? >> what this bill does is legalizes casinos in japan. the, i think the key are going to be in the details. and that will all be discussed in a second bill that the government will have to draft up. this will basically determine some of the key details that companies will be interested in, such as how the license will be awarded, where the sake noahs will be allowed, whether japanese nationals would have a normal access to it or they
would have to pay a fee as in singapore, for example. all that will need to be discussed and debated in parliament when the next bill is drafted. so basically, any sort of casino that we'll see in japan will not happen before the 2020 tokyo olympics. it'll be just a few more years before we tail see and at this point -- before we actually see and at this point it's hard to see exactly how casinos will be operating in japan. >> thanks so much to our tokyo bureau chief for the latest on legalizing casinos in japan. >> this is what the session looks like in tokyo and seoul and there in sydney. a word on the free market auction which came to an end a short while ago here in hong kong and we have the hang seng up, 2/3's of 1%. 150 point move to the upside. >> and how will donnell trump's
>> this is "bloomberg markets: asia." >> over in shanghai, we've got this feeling that the bulls are out and we can have a look at this. >> it's time for reflection on the rebound we have been seing this year going into 2017, taking a look at the terminal chart we've got up there and you can see despite the types of hiccups we got from japan announcing negative rates back in the first part of the year, the brexit vote in june, followed by trump's win in november -- >> that's just to say that the blue line there is the s&p 500 and the white line is the asia pacific.
a bit of underperformance here or asia. it's about to happen. the shanghai and hong kong open. here's heidi. >> looking at that chart thinking, if you just close your eyes and pretend 2016 didn't happen, equities are looking pretty good. having said that, this global rally we've seen get accelerated by those record highs being hit, we are starting to lose a little bit of sting now. we're turning the mix in the asian session as we head closer and closer to potentially the most certain federate hike decision we've ever had. let's take a look at how the china open is there. we've got a divergent picture there. very strong straight out of the gates. shanghai lulled by .2%. we had futures pointing to a higher open. taiwan there giving up those earlier gains.
the nikkei 225 fluct waiting between gains an losses much of the morning, down about .2% ke de-spite the hong kong survey coming in showing that business sentiment in japan is improving. new zealand extending losses, australia seeing strong gains when it comes to some of these mining companies despite basic materials being really a lag in terms of that broader indeck. we're seeing gold miners continuing to see declines as precious metals are starting to fall once again. we're not seing that safe haven demand we might otherwise expect. quick look at some of the movers. when you're talking about this, i guess, rotation, this reallocation into some of the sectors that haven't gotten quite as much love in the trump rally we have seen, health care, tech. ll these are doing well today. regis health care just pairing some of those earlier gains.
and one stock i'm watching today said to be weighing a retail unit of as much as $10 billion, the largest oil refiner, this is a hong kong list, we're looking for more details on that potential deal. a quick look at currency. oil looking a little bit weaker today, giving back gains of about 1% there. new york crude snapping that four-day rally. put on 6% in that practice a little bit of weakness as we head into decision day. the dollar index has been holding pretty steady. we expect that to continue although some volatility, some traders are seing that as janet yellen go into her press conference because the focus will be on the rate hike trajectory going into 2017. in the meantime, we're seing that downward pressure coming off these asian currencies, although, take a look at that. they've given back earlier
gains. the aussie dollar falling ahead of that decision or have been range bound at 74 cents or 75 cents. the other picture we are seeing, it'll be interesting to see how it plays out, given the futures party we've been seeing in the commodities exchange, we have seen decleans when it comes to metals again. take a look at copper, we're seing that falling for a second day although as you say, proving me wrong. snaps back boo positive territory. want to take a look at the bigger picture. got quite a bit of certainty going into the meeting of course. if anything we've been taught about 2016 you can't really expect too much in terms of expectations. we could see greater volatility, just a few hours after that fed meeting there. at the moment, pretty mixed picture, china to open, looking a little weaker. guys? >> thanks heidi.
mixed picture there in asia. >> japanese industry seems a little more bullish than it has been of late. we've got that in the first word news from rosalind. >> that's right. confidence among japan's large manufacturers improved for the first time since last year. they rose lag year. a planned 5.5% increase in business investment for the current fiscal year was below estimates. donald trump laid the groundwork for a congressional confirmation battle other his pick for secretary of state. his pick , he said his experience is second to none. some critics question tillerson's close ties to russian president have lewd mere putin.
oil -- russian president ladimir putin. the deal between opec and independent producers prompted the international energy agency o have shale output. opec secretary general said all sides are determined to make it work. and syrian forces have retake then city of alepp poe, driving out rebel fighters in the government's biggest victory in almost six years of civil war. the u.n. secretary general says he's receiving alarming reports of atrocities against civilian, including women and children. it's been 15 months since russia began bombing alepp po in support of the military coalition with hezbollah and iranian fighters. global news, 24 hours a day, powered by more than 2,600 journalists and analysts in more than 120 countries. this is bloomberg.
>> thanks, roz. china has a revival of smokestack industries and consumption. >> there are risks for next year, we've got concerns about stimulus. let's get to todd mckenzie. he's our china correspondent. quite a turn around given the talk at the start of the year. right, tom? >> absolutely. just cast your mind back to early 2016. you heard from the likes of george soros who said a hard landing was practically inevitable. it hasn't turned out that way. the november data we got out yesterday underlined the robust economy here toward the end of the year. fixed asset investment picked up, produce output picks up. retail sales picks up. exports have been helped by a weaker yuan. we know the manufacturer sector has been helped. g.d.p. greth is around 7%.
according to bloomberg intelligence. now the doomsayers would say that expansion is build o-- built on fragile stimulus fed foundations and it's very, very weak. but of course when -- what it does do according to bloomberg intelligence is give the government something of a sweet spot, at least for now, to target gradually target some of those liquidity drawbacks and also to continue to put cushes in place for the property price market and attempt to neuter some of the looming financial risks that are still here and still have to be faced up to in china. >> a sweet spot for now but where could this all come unstuck for china next year? >> yes, well a key concern still for investors obviously is the debt pile that china has. total debt to g.d.p. is around 250% right now. if you look at the corporate debt, that is around 165%. you know, we know that nonperforming loans continue to
rise, they continue to take other as well. of course on the horizon for 2017 are other concerns around trump, par his stance on chinese imports, his stance on taiwan, real estate, something that has supported so much of the growth that real estate investment is expected to wibed down from 8% this year to around 1% next year. another factor that comes into play. tax cut the auto sector will be phased out at the end of this year that could impact real re-tail sales. all these head winds have been faced up to in a year that's politically crucial for china as well. the communist party congress and around that leading up ta -- to that event they want to see stability. it's going to be tempting for policymakers to resort to more stimulus to see economic stability that they can meet the target of 6.5% growth next year. there's a risk of kicking the
debt further down the road. >> stability ever desirable. thank you, tom. >> we've got trurp making headlines around the world every day. for hsbc, his policies toward china are of particular concern. >> the bank is redeploying as much as $150 billion of assets to asia and hiring 4,000 staff in the river delta. >> speaking exclusively to bloomberg, douglas flint said china made the decision to change and is doing well. >> the issue in china is in an economy of that size and complexity, can you make the transitional change from a heavy industry infrastructure investment led, export led driven o a consumer technology savvy research and development economy smoothly?
i mean, the transition is under way. big steps have been taken. heavy restructuring is under way. the population is supporting the transition. and that is reflected in political support. is you know, it's a massive undertaking to transition the economy. but you can see, you know, the research side tcherk consumer side, the tech side is going very, very strongly. the -- and the chinese firms are beginning to invest in lower wage economies in the same way that other businesses used to invest in china so they're going into vietnam, into myanmar, into africa and effectively replicating the stage of development that they went through in other countries and building infrastructure to create trade flows, trade corridor.
so you know, when you're trying to do something very ambitious, you worry there's something interrupted. but i think china has managed extraordinarily successfully so far. >> how many of those do you think chinese banks have? >> you can see they report many things, there may be other elements there or in the investment companies that are yet to be recognized. i think it's less relevant what e custom is than how they're managed. managing impearment is can you manage it in a smooth way without causing disruption. china has not borrowed from the rest of the world so it's an internal issue. can you manage it in a way that you have the capacity to deal with it without causing unrest and economic slump? so far they've done it. i'm relatively confident they'll continue to do it. i think their model is different
from ours. it's difficult to say that you ould -- they won't do it the same way it would be done in the u.s. or europe but they know what they have to do to manage capital efficiently and they have the xmasity to do it. >> you can catch the full interview with hsbc chairman ouglas flint on saturday at. >> up next, corporate sentiment rises for the first time in six quarters, whether the glass is half full or half empty. ♪
global investment banks are on track for their first increase in four years, that's after donald trump's surprise election shift to equities. >> i think there was a bit of overexuberance of how well people are doing. the underlying flows picked up since the election but the overall feed pool that relates to equities is only marginally up on the year. we're getting an increased share of some of the that but i don't think this is a significant pickup in activity versus last quarter. >> monsanto shareholders voted to approve the merger. they said 99% of the votes cast were in favor of the deal. the c.e.o. said the decision reflects the belief that the deal will spur innovation. monsanto expects the merger to be completed by the end of the -- of next year. >> google's parent, alphabet, is
looking to start a ride sharing service with chrysler by early next year. they'll deploy a semiautonomous version of the pacifica mini van that's under development. google separated its vehicle projects into a new holding company walled waymo and said the next step is to let the public get used to driverless cars doing everyday things. people are poibing to the fall in the yen as it improved prospects for corporate earning. >> taking a look at numbers do, we see a moderate recovery under way? are there any red flags for you in the numbers we're seeing here? >> well, the capital spending plans are still weak, the weakest since the launch of economics, but i think we need to remember that these forecasts
are based on actually a pretty strong yen, the average yen forecast actually rolls so basically firms are expecting a stronger yen they that than they did in the previous survey which is hard to recon sail with the weakening we saw in the yen over the last couple of weekful i think there's plenty of room for upside sur prideses in the coming months as the yen continues to weaken as we expect. >> when we see that, the g.d.p. figure we had was way off kilter, third quarter second stim of it, anyway. does this tankan survey indicate more strength for the japanese economy? do we expect g.d.p. to actually improve? >> the second estimate of g.d.p. was down but the benchmark revision that we got with this estimate, they showed that actual growth in the first half of this year was much stronger than expected, was much stronger
than previously shown and the economy is currently expanding by around 1% per year, quite a bit above potential growth. japan ease economy is shrinking and the tankan and a lot of other indicators that we're looking at suggest that the economy picked up further speed in the current quarter and we think it will continue to grow around 1% next year which will lead to a further decline in the economy. >> we did see an improvement in japanese business sentiment, capital spending not as buoyant as one would hope. where does this then put the bank of japan? >> the bank of japan, a lot of things have moved in the right direction for theback of japan over the last couple of weeks. the yen weakening is probably the biggest factor. business sentiment improving, and the ore thing that is now
improving is consumer spending. consumer spending has been very weak ever since the 2014 sales tax hike. but the bank's own consumption activity index rose to the highest it's been since the sales tax hike in october. and the current indications are relatively good with the labor market very tight, employment -- employment growth strong. we think that consumer spending will finally start to rebound next year and this will make the job for the bank of japan much easier. >> consumer spending is going to go up only if we get wage inflation. this has been notoriously difficult to ebb gender there in japan, even with shinzo leaning on corporates to do more to lift what people earn. it's going to be based on that, but will we get these wage increases? >> i don't think we'll get much stronger wage increases next year than we saw this year. we have the spring wage
negotiations which will probably reresult in comparable increases as we saw this year simply because consumer surprise -- consumer prices fell this year slightly and this is the biggest factor in the negotiations because they're quite backyard looking in terms of what determines wage hikes. but again, with employment growth likely to be strong and savings rate now having surged as a result of the prolonged restraint by consumers since the sales tax hike, we think there is room to spend more, even if wages don't increase very much. >> let's get back to the yen here. your end 2017 forecast remaining at 120. we're now at 115. what kind of potential are you seeing here? >> we still expect the fed to hike rates quite i agressively next year and we expect u.s. government bond yields to rise
toward 3% by the end of next year. at the same time, the bank of japan will probably stick to its 0% target for 10 years and that should support -- that should continue to -- interest rate differential will continue to widened and we think the yen will probably continue to weaken. at this stage, 120 is obviously very already close. >> let's just get your report card for 2016 here. how have they fared four years into it and i was talking to somebody earlier and they said when they looked at that tankan number, they said it shows japan is still stuck in a rut. >> well, i mean, most of the similars, most of the positives have been from the bank of japan. there's been very little on the restructure reform work the t.p.p. dead on the water they can hopes continue to rest on
the v.o.j. to support the economy. >> so that's not really a report card. that's a report card for the v.o.j. that means they need to work harder at the finance ministry and in the prime minister's office. >> yes. the government is still sticking to its plan of cutting the deficit, the primary deficit to zero by 2020. that's obviously not helping if you want to get the economy going and with bond yields at 0, there's plenty of room for the government to spend more money and we think that should -- they should do so. >> thanks for that. >> still to come, the latest on the battle at india's biggest conglomerate, next. ♪
>> the ousted group chairman's grip on power weakening further with shareholders at t.c.s. voting to remove him if the board. foregone there a conclusion? >> the latest chapter in this corporate, well, drama, really, i suppose you'd call it. he wasn't actually at the general meet bug he did say he thought it was a foregone condition collusion that's services.ey had a 75% as the meeting began, the board did say there was unanimous agreement that it is in the best interest. the big -- he's india -- it's india's largest company by market value. everyone did agree that this pat has affected general value
and he was ousted in 2014, wasn't given a reason for being out as chairman but he's gone. >> they've got so many companies , as you said it was the biggest conglomerate in the country there. this is, as we've had, one of several meetings by these various elements to get rid of him. where are we with this? >> this meeting was the first out of six units that will hold meetings this month. we've still got others, including india hotel, chemicals, as well. they say that his continued presence is a serious disruptive influence. getting rid of him have been very difficult because when he's pushed out as the chairman of the group on october 24, but he remained on the board. difficult to get rid of him completely.
♪ it is almost 10:00 a.m. in singapore, 1:00 p.m. in sydney, 9:00 p.m. on the eastern seaboard of the united states. i am rishaad salamat. am sophie kamaruddin. this is "bloomberg markets: asia." ♪ rishaad: asia-pacific markets generally flat ahead of the federal reserve, the anticipated hike indicating the u.s. economy is stronger. sophie: japan's business sentiment improves as abenomics struggles.
pickad: donald trump's wins moscow backing. some argue rex tillerson is too close to the kremlin. just taken a look at what's going on out there at the moment, this whole fed narrative. sophie: that is what is shaping the picture today. rishaad: we are talking, will they are want they. sophie: it's about what will happen next year. rishaad: exactly. then we will bore people to death asking that question as well. right, it's about the equity session as well. sophie: here is a closer look at what is moving sentiment. definitely priced in, this fed rate hike. thismarkets buying into news, good gains, particularly
hong kong, still a lot of positive support from the energy players. sinopec up almost 6% on that potential deal, and petrochina doing incredibly well. coming back market after weakness, up by .2%. from most ofvement the equity markets in the region, although the nikkei coming under pressure. .1%, but down .ignificant movement in the won emerging-market currencies getting a solid boost ahead of the fed meeting. change toecting no their projections. a little bit of movement, have a look at the malaysian ringgit, weaker at the moment, but it has been leading the momentum in emerging-market currencies,
similarly the won. movement in currency markets, and also the bond market, a bit of a selloff. the oh the yield on strain 10 year, down three basis points, so money going into that bond. in japan, two basis points on the 10 year, i drop there, so movement into that bond market as well. treasuries range trading ahead of the fed decision. optimism withf asian stocks at one-month highs. rishaad: thanks. sophie: let's get first word news. rosalind: australia's mccoury billionading a $5.5 takeover bid. the consortium is
offering a cash bid. johnson & johnson supposed takeover of a swiss drugmaker is off. europe's largest biotech firm rejected an initial approach. sources tell us johnson & johnson were open to discussing elion --akeover, but act and upper house committee in japan approved news legislation -- new legislation, now a final debate wednesday, opening the door potentially to billions of dollars investment, but more legislation will be required before integrated resorts will be built. india's decision to scrap
sees inflations rising at the slowest pace in two years. rose less than expected as vegetable prices fell. signs of a prolonged slowdown could push the rbi on rates. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. sophie: manufacturers in japan feeling more confident, but plans to boost spending are falling short. rishaad: we have the latest on this survey. >> the headline figure is looking mixed, confidence next, depending on whether or not you get advantage from a weakening yen, some not surprising large
manufacturers getting a huge boost in confidence. the yen has weaken so much the last couple of months. take a look at this chart, large manufacturers have reacted to a weakening yen, the launch of abenomics, and confidence in the orange line surging. some stalling and declining confidence given the yen, the white line, has strengthened, but then a pick up as the yen started to weaken. this is after three previous quarters coming in at six and stalling. non-manufacturers stayed flat. t to great, missing estimates, but when it comes to capital spending, this is the issue, and the missing link in japan's monetary policy. why aren't they investing more?
companies now planning to boost capital expenditure by 5.5 % this year. sophie: why then is capital expenditure not as much as expected? shery: we have seen the weakening yen, more easing from the boj boosting corporate profits, and not just manufactures, but also nonmanufacturers, because that their profit margins are at record highs. capital spending is not increasing, and now hsbc says this is because headline sales aren't growing enough. that demand can be dealt with by existing capacity. our bloomberg intelligence team telling us that demography is a concern, volatile commodity prices is a concern, so the consensus is japan has to do more on the fiscal side because
the monetary side is running out of steam. it is a consensus that many analysts agree on. >> the boj becoming powerless. they realize they had done too , having used their balance sheet too much, so there is no more easy easing policy. in that environment, the fact to behe u.s. seems pursuing strong dollar policy is a great benefit to the boj. get thate will decision from the boj next week. >> for now, the new policy of hasd curve controls weakened the yen, a positive for inflation. sophie: thank you so much for the update there. rishaad: one rate hike wednesday, and two at the most next year, that is what the fed is expected to announce after his two day meeting wraps up.
could the boost to spending change all of this. sophie: kathleen hays is here with more on that. >> let's start with what we are certain to get, the rate hike of the year, the one rate hike of the year. a year ago, the first one since the great recession, and now on course for this one. let's jump into the bloomberg. see the odds have been at 100% for nearly three weeks since november 21. a stream a stream of fed speaker saying it is appropriate to hike rates, including janet yellen. consumer numbers, jobs numbers looking pretty good come all supporting this fed move. what about 2017? a survey of economists are looking for two interest increases in 2017. we will get updated forecast
from the fed at the end of this policy meeting, including the new dot plots. untilists say maybe not 2017. the problem is some economists and former fed officials are , theg there is a risk economy strengthens and inflation accelerates at an accelerated pace, and that is greenspan ist alan watching, particularly when it comes to labor markets. is runningr force out of extra workers. the unemployment rate now is under 5%. you can't go very much lower, 150,000 to the 200,000 increase in payrolls a month is not going to continue on because we are running out of people. just's not jus alan greenspan.
in the bond market, inflation expectations have been rising. sophie: what about expectations that donald trump will rev up the u.s. economy, and could this cause the fed to hike more next year? is probably not. fed officials have indicated in so many ways that they can only base policy on what they see in front of them, economy, inflation, and donald trump's plans, but we don't know if they will get through congress. it probably does not have a big impact now. surged, bonds have sold off, yields surging as well, and now it is affecting small business optimism. the national federation of business's latest survey shows the overall index having its biggest one-month gain since april 2000 9, 2 components can power that. hire,ite line is plans to starting to go up on the right-hand side of your screen.
the blue line is expectation for an improving economy, and yes, see how that is shooting higher, 19 points in november, so it is pretty clear that small businesses are betting on trump. what is donald trump betting on when it comes to the fed? you can follow along on the from trump,weets and a lot of traders will be watching that. it will be interesting to see if donald trump takes on janet yellen and the fed. rishaad: what would change the gradualist approach it has been? >> what with change the gradualist approach, if they see the economy picking up or quickly than they have anticipated, and especially inflation. the fed is counting on that inflation rise being gradual him a but again, that is why markets will be so focused on the policy statement and those revised
forecasts. will they see more inflation next year, or will they stay where they were? a lot of people are betting that janet yellen's tone and guidance will be cautious, going meeting by meeting. tomorrow in new york or the next and hong kong, we will get the response to that fed decision. sophie: thank you so much kathleen hays. rishaad: we will have more from alan greenspan later on bloomberg. plus, watch out for our interviews with former ecb president and bank of england governor mark carney. sophie: bloomberg will have special coverage wednesday on the fed decision beginning at 1:00 p.m. in new york. still ahead this hour, a research firm releases its latest survey on the most expensive cities for ex-pats. we will preview that. the yen next,
rishaad: we are back with a quick check of the business flash headlines. chinese oil production rebounding after prices rallied on global moves to curb output. production in november advancing 3.4%, the highest level since july. that was not enough to overcome the industry's longer-term slump , china's output still 9% down during the same month last year. state ownedchina oil company may consider an ipo that could raise $10 billion. sinopec has asked banks to submit proposals for a potential hong kong listing. the biggest refiner agreed to sell a stake for more than $15
billion. sinopec has yet to comment. rishaad: let's have a look at shares on the way down for a second day in tokyo, agreeing to buy sab miller's assets for $7.8 billion, catapulting japan's largest brewer to number three in europe. the latest acquisition should close in the first half of next year. in the first half of next year. the deal is the largest beer purchased by a japanese company. sophie: the dollar has weathered a choppy session. traders seem to be less concerned over tomorrow's rate decision, and more focused on the future course of monetary policy. rishaad: thank you for joining us. you have been a dollar bowl, but at what point does it -- dollar l, but at what point does it start looking shaky? >> towards year-end, propensity for traders to take risk off the
table. the strong dollar may follow-through and traders would be reluctant to add on long dollar positions towards year-end. sophie: there is the focus of the fed, but where expecting politicians to step up to the plate, what does that mean for markets in 2017? on thee will be focus statements later tonight, and that will give us more direction for the u.s. dollar, but i see politicians stepping up. with theer 2017, anticipated wave of fiscal spend, i think that will be the market driver and leader, how that reflationary trade plays out into the bond market and back into the currency markets.
rishaad: absolutely, were looking at. you're saying look at the reflationary trade, but let's look at political risk in europe. we have a french german election. i think there are a couple of factors, but not only the , theyg wave of populism are being held back by low inflation. the burgeoning government debt on the continent as well. my view is they will have to keep interest rates low. if this reflationary trade except speed, the euro will come under immense pressure. it is too late in the year for traders to buy into this risk, but as these factors play out in early 2017, we will probably see downward pressure on the euro. sophie: there is still that
assault on the horizon. what of their moves are you seeing when it comes to majors? we have the yen for example. one guest is seeing 120 by the end of this year. what is in your view? >> i think there are two things underpinning the dollar-yen trade. first of all, the divergence between the jgb's and the u.s. 10 year treasuries. that continues to expand by the week, so that definitely favors the long dollar position as we enter the end of the year. globaler element is equity markets and the wave of risk on. and the dollar is correlated to waves of risk on. given those two fundamental drivers, it would point to a higher dollar-yen. i think traders will have the propensity to take it higher. we have to be guarded. unexpectedexpect the from janet yellen. she may say something contrary
to what is on the table. we have to be guarded until the federal reserve clears their mandates and we can go forth from that point. rishaad: let's talk about china has well. there are a lot of concerns about capital flows, particularly the authorities there. in the process, they are trying to shore the currency up by weakening it gradually, but they're spending an awful lot of money doing that. does that continue next year? are between a rock and a hard place because the propensity of mainland investors to look at the u.s. economy as an attractive investment, so needless to say they are constantly looking to get their money into u.s. dollars, but the yuan has held up well against the basket. it is still the psychological impact of a stronger dollar and a weaker yuan that drives these outflows, so we have seen capital controls come into play.
my fear is that this will continue into 2017, and they will be defenseless to stop the stronger wave of the u.s. dollar. the broader picture, it is negative because international investors don't like any type of capital control. they want to see and open and free market, and that is the other issue that will start to haunt us in early 2017 when china starts to come under the spotlight once again. much.: thank you so mapping out the headwinds for currency markets, expect the unexpected from janet yellen. next, we aret, up looking at why hsbc's chairman does not see president-elect trump rolling back on regulation. we have more from douglas flint on the way. ♪
flint says he does not expect donald trump to start dismantling the banking industry's regulatory framework. speaking exclusively to bloomberg, he cautioned against a softening of rules that could see lenders return to their precrisis state. >> i don't think there is any chance anywhere in the world of regulation moving. >> really? good.w, that was not our biggest risk is our industry. you do not want a part of the world where people are able to do things with much less capital than economically advisable because we are all exposed to each other. so light touch regulation and competing is a bad form of banking, and i don't think it will happen. what we might see is some moderation of reporting rules, which are onerous in terms of capacity, systems, and so on, and there are multiple different
ways of reporting around the world that we have yet to harmonize. we might see some relaxation of the volcker act. he has a lot of things to think about and that would not necessarily be first. >> if it is, does it impact european banks? does it put you in a worse position? do you think regulators in europe would look at the u.s. and soften? >> i don't think they will soften, and i don't think they should. europe has to decide on banking capability or say that's fine we would rather not have the risk if it is judged that way. i think that would be a mistake. one of the of their issues that is interesting, particularly in the context of brexit, is that
where intering a world wholesale activities, the u.s. and the european union are -- have agreed they are equivalent, which is important in terms of doing business. europe, so it is equivalent, but you could have a scenario where the u.k. has left europe and overtime moves away from european regulation, i think unlikely, but possible. the u.s. could change its regulation to no longer be equivalent. that would be a pity. the fragmentation of the global framework would be expensive for would bemers, and it systemically riskier than bringing everything together in the way that it has been done successfully since 2008. ,ophie: that was douglas flint and a reminder, you can catch the full interview on saturday
i've spent my life planting a size-six, non-slip shoe into that door. on this side, i want my customers to relax and enjoy themselves. but these days it's phones before forks. they want wifi out here. but behind that door, i need a private connection for my business. wifi pro from comcast business. public wifi for your customers.
private wifi for your business. strong and secure. good for a door. and a network. comcast business. built for security. built for business. these are the first word headlines. among japan's large manufacturers improved for the first time since june last year as the weaker yen in proved prospects for company earnings. from six.rose to 10 a plan 5.5% increase in business investment was below estimates. trading near a 10 month low before the fed interest rate decision with investors expecting the central bank to hike for the first time this year. battered,s been
making it the worst commodity performer after sugar. while the hikes may hit gold initially, it could still perform well if real interest rates remain low in the short-term. oil has been trading around 17 month highs. the market shifting focus from production cuts to the chances of rebalancing global supplies and 2017. the deal between opec and predictsnt producers higher u.s. shale output, but says the glut will drain away in the first half of next year. the opec secretary-general says all sides are determined to make it work. syrian forces have retaken aleppo, driving out rebel fighters in the government's biggest victory in six years of civil war. secretary-general says he is receiving alarming reports of atrocities against civilians, including women and children. it has been 15 months since russia began bombing aleppo in support of bashar al-assad with iranian fighters.
global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. sophie: this is "bloomberg markets: asia". i am sophie kamaruddin. rishaad: i am rishaad salamat. three letters dominating the headlines. f-e-d, we are on fed watch. holding at a one-month high ahead of the expected interest rate hike. oil and gas players the front runners. also, good movement in tech shares, up by .7%. health care was where we saw defensive buying, coming under pressure today. that dropped in commodities players, golden basic materials, down.
down 18.6% after changing its rights issue, shares falling to the lowest since 2015. knows the president market does not like that. good in sydney, despite losing a case in the high court. potentialat case on price-fixing arrangements, that they had that disagreement a couple of years ago. rio tinto looking good after it that topgrade revising stable from negative. a quick look at the overall market picture, the nikkei going in to a lunch break flat, down .1%, some moves in australia and
hong kong come and a dip out of the shanghai composite, which was tracking better than that, now down .25%. foras not been a great week chinese shares, that slump coming through on monday, but mostly we are seeing optimism ahead of this expected fed rate hike. sophie: thank you so much. the global rally continues in asia. tattsd: look at shares in group soaring after macquarie offered $5.5 billion for a takeover. sophie: let's get over to paul allen. what are the details of this offer? paul: this offer values tatts between $4.40 and $5.50 a share. includesonsortium , morgane group, kkr
stanley, and first state as well. it is not as simple as it seems. the consortium will separately list tatts group's gaming andness, so $3.40 a share part of that unit. the consortium would hang onto the lottery business, which generates two thirds of revenue. the market enjoying this, up 9% right now. leaved: where does this this rival bid by tabcorp? that was made in october. at the time, $4.5 billion deal lookedfor dollars $.34, good in october, but not so appealing now. have a look it will at this new bid from macquarie
consortium. having these two bids does highlight how attractive the spaces. all strain gamblers are deliciously stupid, losing more per capita than any other nation. accc might have concerns about that tire. this is the all strain consumer regulator. much crossover between those two businesses and their plan to form a pan-austrian gaming company that can compete with international competitors, and it might raise regulatory concerns, and maybe this is where macquarie group sees they might have an advantage. at $5.5that new bed billion also looking delicious. thank you for the latest on tatts group. rishaad: a economist made look at 2016 is the moment when the world shifted away from globalization. sophie: alan greenspan agrees the retreat is largely down
to china. now,ich you are seeing china, which was a key vehicle in the process is now pulling back, starting to -- the yuan has been weakening significantly, and the reason essentially is that the structure is changing. in thes an inconsistency chinese system in which they are capitalistecome a capitalist economy, and indeed in certain respects, they are becoming the largest capitalist economy in the world, but the problem is you cannot do that in a single party state, and we are beginning to run up against, as has been the yuan weakened very significantly, and we used to say they are manipulating their currency. they are not manipulating it in
the direction that people think. they are trying to support it, and it is getting out of hand. aree controls put in place essentially an indication that we have a single party state that can move very quickly, and they do. the, what we are seeing is consequences of a real attempt to become an international currency, which reached its peak a year or so ago when it looked as though they were going to become a very big deal and everyone was going to be trading , instead the renminbi of the dollar. evidence that will continue. that chinair to say does do its best, whether successful or not, to try to
adjust the level of the yuan? >> everybody is manipulating their currencies. that is the problem. we are all culprits, but it is a zero-sum game, so i don't know how to answer that question because that used to be a meaningful question 15 years ago. i don't think it is a significant issue anymore. haidi: former fed chairman alan greenspan speaking to bloomberg. rishaad: right, exxon mobil's rex tillerson will be nominated as president-elect trump secretary of state, setting up a potential confirmation battle because of his close relationship with russia. >> all the action will come down to the senate foreign relations committee. january, and there's not a lot of wiggle room. if republicans pass him out of
that committee, it seems hard to believe that he could be stopped. the republicans to watch for our marco rubio, bob corker, rand paul, but questions from the republican side will come down to his involvement with russian political leaders, including vladimir putin, and his views on russian-u.s. policy and his work on behalf of exxon. >> were russians pleased with the nomination? vladimir putin gave him the order of the deal in russia. a close aide said rex tillerson is a great professional, and we heard from a parliament member who said this will create a sensation if it came to be, which denomination has, so the russians indicating publicly that they know this man, trust in the business context, and someone they would
want to work with. nomination fits in with donald trump's approach to his cabinet overall? >> there is a trump orthodoxy emerging. one is that wealth creation and job creation is a qualification for basically any cabinet position. two, ceos make great leaders, and this is the trump orthodoxy in government and business. number three, there is no conflict of interest that cannot ifaddressed and gotten past donald has chosen somebody he wants to lead. we will see if the republican led senate goes along in the confirmation hearings. what were looking at now -- rishaad: these are those two pro-independence lawmakers who were stripped of their seats after the government challenge
the validity of their oaths. they are making a statement at the moment, it is in cantonese. this is hong kong's highest court, looking to overturn the decision made on december 5. rishaad: disqualifying them from taking their seats. making that statement at the moment to the press here in hong kong. coming up, it is shanghai still asia's priciest city for ex-pats? find out next on bloomberg. ♪
blackstone's global head of real estate does not see an end to chinese buying. telling bloomberg that u.s. economic growth is likely to be higher under a trump presidency, and that may justify high property values, saying apartments and hotels are most attractive to chinese buyers and the purchase of a 25% in hilton worldwide will look very smart. is a lot of liquidity out there. if you look at who we sell things to, the public markets, a bunch of assets to canadian pension funds, a large hotel to a korean investor. we are seeing lots of demand for high-quality assets. on the other hand, what you saw from china was an announcement that they will focus -- i don't think we will see a complete cessation of outbound chinese investment. sophie: wells fargo has failed for the second time this year to persuade regulators that it could unwind its business in the event of a failure without wreaking havoc on the broader financial system.
from buyingnned non-bank companies are setting up international units. if wells fargo does not come up with an acceptable living will, units will be cap. rishaad: singapore and malaysia have signed an agreement on a -- on ae rail link high-speed rail link. the plan is six years behind thedule and aims to trim time to 90 minutes, currently five hours. trains will travel at more than 300 kilometers an hour. they will award the tender next year. some news from goldman sachs, said to name a new chief finance officer, according to the al jones newswire. sophie: more details later. our next story, hong kong has long been considered one of the priciest places for foreigners
to live, but has now fallen out of the top 10 global ranking for most expensive cities for assets -- ex-pats. tokyo taking the first spot for the first time since 2012. it is relative given the global ranking, hong kong is still fairly high up. give us a sense of why this is happening. kong's fall it does necessarily indicative of hong kong becoming cheaper. rishaad: it certainly isn't. we live here. sophie: prices have gone up considerably. rishaad: yes, we know. surveys, ito these is a basket of goods around the world. to comparisons, we have convert everything into a common currency, the u.s. dollar. what caused the japanese locations to move up the rankings has been the strength of the japanese yen. rishaad: we have gone back though, so this is probably looking back a little. >> it is.
the survey is comparing prices we collected in september 2016 with september 2015. there have been currency movements since then which may adjust the rankings a little bit, but overall, it indicates -- hong kong remains a relatively expensive location and is joined in the top 10 by other locations in asia such as tokyo. asia, hong kong ranks number five on that list. as we noted, japanese cities really take the top ranking there. hong kong also outpacing shanghai in asia. >> yes, this is the first time since 2010. for the last five years, your tier one locations, beijing and shanghai, have been more expensive than hong kong. the impact of currency depreciation that we have seen in china over the last 12 months , that has pushed hong kong in terms of being relatively more
expensive. e muchhong kong has don less well keeping inflation under control, causing it to rise of the rankings in comparison. rishaad: give us an idea, you have two versions, for ex-pats, and for non-expats. what is the difference? in a basket is what a person would spend on a day-to-day basis. the prices include day-to-day lunch, dinner, breakfast, and so on, so items that most people would consume, either locals or x patriots. a lot of locals looking at this -- or ex-pats. not in theng kong is top 10 when it comes to the most expensive city in asia for ex-pats. >> right.
at our dataoking collection, we look at locations where your typical international executive would buy those goods and services, so there is a certain differentiation and shopping habits. the other thing we don't take into consideration as part of our comparison is housing costs. it is a major cost for anybody. the reason why we don't included, we do that as a separate survey because most companies when they move staff providehe world, they separate allowances for housing, and so there is a separate allowance to look after the day-to-day expenditures. if we add housing, then you would see on wrong move even further -- you would see hong kong move further up the rankings. rishaad: do you include food and drinks and going out? >> of course. rishaad: then singapore should be number one. >> that's true.
highpore does rank pretty when looking at eating out, but you have relatively lower costs with public transport, utilities , which is cheaper in singapore in comparison to tokyo and hong kong. sophie: were there any surprises in this ranking? >> a couple of surprises, globally seeing african locations remain within the top 10 because of scarcity, but one of the big surprises for us -- rishaad: london. >> exactly. dropped out of the 100. >> for ex-pats? >> of course. think it is comparable. rishaad: it did surprise me. , thee impact of brexit fall in the value of the pound against major currencies since then. sophie: thank you so much. intoad: it doesn't take
sophie: this is "bloomberg markets: asia". i am sophie kamaruddin. rishaad: i am rishaad salamat we ar. we have the ousted top to group chairman-- tatta group being we can. sophie: it is one of many units undergoing these procedures. we are going to go to mumbai. how did the meeting go? it was noisy and very critical because cyrus mistry was absent, but the interim chairman was in the meeting and the front row among shareholders.
with the requisite majority of shareholders, they voided out -- voted out cyrus mistry. they have a concern over the erosion of their wealth. some shareholders pointed to the , advising voting against the removal of cyrus mistry, but a large part of shareholders chairman the interim and the resolution of ousting cyrus mistry. around 93% voted in favor of removing cyrus mistry as chairman, while 6.89% cyrus mistry favored -- 6.89% favored cyrus mistry has director. rishaad: there is a new headline every day.
most of the shareholders are supporting it, but concerned about this big fight. they are engaged in one of the largest corporate battles in india, but are mostly concerned about the erosion of the wealth. aboutave more concern what happens to their investment. many shareholders have explicitly extended their wholehearted support to tata in their ongoing fight. losinge worried about head of one of the units. rumors that he has been shortlisted for the top job --as tata sons
chairman. sophie: we will update the big stories of the day so far. >> it is decision day for the fed. while the markets have priced in 100% certainty. what is not certain is the prevalence of future rate hikes in 2017. for that, we will listen closely for guidance in the more than one hour janet yellen will spend taking questions. we continue our exclusive interview with hsbc chairman douglas flint and explore the latest survey, next. ♪
♪ >> from our studios in new york city, this is "charlie rose." charlie: cybersecurity has become one of the greatest challenges facing this country. last february, president obama created a commission to address the growing threat. earlier this month, the commission on enhancing national cybersecurity announced its findings and comprehensive report, it called for urgent action to enhance american cybercapabilities. meanwhile last week, president obama ordered a full review of russia's election-related hacking. president-elect trump continues to dispute the kremlin's involvement.