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tv   Bloomberg Markets Asia  Bloomberg  January 25, 2017 8:00pm-10:01pm EST

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rishaad: 9 a.m. in singapore and midday in sydney. 8:00 in the evening on wednesday new york city. i'm rishaad lummis in hong kong. this is "bloomberg markets asia ." salamis.shaad markets in the asia-pacific extending the global rally. the dow totalling 20,000 for the first time ever. 0%trochina, net income fell 8 last year. donald trump laying down the foundations for his all on the mexican border.
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the u.s. president demanding tighter controls on immigration. 20,000 for the dow. the global rally inequities. a reflection trade back on at the moment. dollar's weaker. let's look at what is coming on with singapore and malaysia coming online. >> global rally not losing steam in asia. we have the likes of materials and consumer stocks leading that gain. the benchmark trading at the highest since september and bonds and gold study after the overnight selloff. we are seeing fluctuations in the yen, but that is not de nting the nikkei 225. the kospi up over 6%. taking a look at what is moving on the index. real quick. we have the likes of -- kospi. gains on the
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we have singapore stocks up. this morning, we did get home price data showing that private property prices fell half percent on a quarterly basis in analystsh quarter, but are seeing prices making after comeback after all three-year losing streak. now, taking a look at some equity movers today. we have gasquet heinig in focus. news coming out of that company, it did post an earnings beat in the fourth quarter, the stock up 2%. it does not have any plans to build factories in the u.s. as for the outlook, it is seeing the slow chip supply situation giving a boost to margins. general falling the most in six years, the biggest drop in the topix. this companies make refrigerators and air conditioning units. we have line corporation falling the most since july.
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a softer job than we saw earlier at the open. meetne did not expectations when it posted its latest results. rishaad: thank you so much for that. now let's get to some of the first word news headlines. joining us haslinda amin. u.k. prime minister theresa may says she will publish -- brexit giving in to demands from lawmakers. her government will publish a white paper in the commons to allow debate on this tragedy she outlined last week. the pound extended as run after may's announcement, through 1.26 for the first time since december 14. apple is set to join the partnership on a.i. the rish or group includes amazon, facebook, microscopioft and google. apple declined to comment.
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it anticipates gaining extra member. baidu is a noticeable absentee. profit at the world's biggest casino operator missed estimates. fourth-quarter profit of 62 cents a share as revenue raised more than 7%> . casinos missed because lucky gamblers cost them $20 million. qualcomm slipped after hours after warning sales and profits for the current period may miss estimates. the chipmakers second quarter revenues could be as low as 5.5 billion, missing the estimate of $5.9 billion. it prepares toas defend its most profitable unit
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from legal challenges around the world. global news 24 hours a day powered by more than 2600 journalists and analysts and more than 120 countries. i'm haslinda amin. this is bloomberg. rishaad: let's go to breaking news out of kia motors and south korea. well, coming out with operating profit weaker than expected. they are not bullish on the future as well. growth, well, in major markets. david? david: right. so, let's get to the fourth quarter numbers. and just bear with me a bit while i try to convert these to the u.s. dollars. we are looking at fourth-quarter profits missing estimates, $532 billion south korean won. they are missing their by about, just a minute, that is about a $34 million miss. if you want to translate the u.s. dollars, 532 billion is
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$460 u.s billion. net income 320 billion won. doulbe ble that amount was estimated. u.s.tlyly about $270 million the fourth quarter sales just under 14 trillion south korean won. at the exchange rate we are looking at $11 billion. a miss for kia motors. yesterdayalso reported profits would trail 33%. in their case, we have to consider -- we have two big markets for hundai. the u.s. is a market where you need to spend a lot of money marketing, incentives and warranties. volumes were up in the u.s., but
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if you can imagine the strong u.s. dollar deflating those costs there. buthina, sales picked up the company expects that this will hit demand here. hyundai --on big drop. you have partial strikes which turned into a full strike in september. rishaad: ok. also, justing is looking at what they were saying about the futures. it could be the small car engine actually, perhaps getting taken away. tell me about the other companies you are keeping tabs on as well. david: yeah. we are in the thick of earnings season in south korea. i'm looking at two companies, both suppliers of apple. one of the better performing
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stocks and south korea. big pop in profits. fourth-quarter profit 1.2 trillion won. on analyst saying that everything has been extremely, extremely good for the company. level of inventory, exchange rate, just about everything you can think of and demand for its semiconductors. we saw that reflected in the earnings this week alone. you understand why analysts are bullish on the stock. at these levels at 53,000 won a share, we are looking at a further 10% pop in stock price. and very quickly here, lg display excluded from the list of suppliers for the apple iphone. rishaad: thanks, david. let's get to donald trump, pushing ahead with his controversial pledge to build a wall. he signed an executive order to direct federal funds to the project and to --
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let's get to the wall first. pastth the wall, over the several months, a lot of people are rolling her eyes thinking this was not going to happen even if trump became president are today he proved them all false. and signed an executive order at the department of follmann security. of -- of homeland security, putting into effect the first ups for the southern border wall with mexico. not only that, it also focuses on employees in terms of 5000 new employees for border agencts and 10,000 new employees for immigration and customs enforcement. that's basically used for deportation. let's take a listen to what mr. trump had to say. president trump: a nation without borders is not a nation. beginning today, the united states of america gets back control of its borders, gets back its borders. ramy: earlier today, mr. trump
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told abc in an interview about the timeline for this as well as how it would be paid. in terms of that timeline, he was quoted to have set within months, is what he's saying. he is also said that mexico, he reiterated that mexico will reimburse the u.s. for the cost. etoican president pena ni has said that mexico will not pay for the wall. one interesting thing in terms of talk here, with u.s. companies dealing with building materials. look at that. egagle material and martin marietta dealing in cement. rising to record highs off the news of a falcon material which is a sand and gravel supplier sides highest since november. off this interesting news, there are still some gainers. well, you know, we
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have another document signed, also, an executive order that is a link to stopping refugees from entering the u.s. which countries have been preselected for this? ramy: that has to do with the countries the united states deems as contribute into terror or suspected terrorist activities. namely that would include countries in the middle east and north africa. syria, for example, yemen, libya, somalia, iraq, as well as iran. mr. trump pushing through on a campaign promise you for what he called extreme vetting of refugees coming from those countries. he is going to want to do a 30 day hold for people from those countries as well as a six month freeze for all admissions for refugees. if that freeze does get unfo rozen, he's going to take down the number of refugees the u.s.
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currently allows in to the country, that numbered he stands at 110,000. he is going to take that down to 50,000. a national security definitely in focus in terms of the physical border protection as well as with the rules with potential refugees coming in. thank qantas ringing in the lunar new year with a resumption of flights to and from beijing. the to the executive alan joyce, we'll speak with him. presidentuest -- says trump is a short-term phenomenon. the good stuff comes after his first 100 days. ♪
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rishaad: breaking news out of china. the pboc has instructed banks to curb new loans. fame and told not to increase the amount of mortgage lending or the rate of outstanding
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mortgages relative to the fourth quarter. we did try and get in touch with the pboc, but they did not actually respond to this. let's get some reaction now. james from bank of singapore. tell me, what is your reaction first of all to this? they're getting worried about the housing market is the first takeaway. i think one of the risks facing china this year is the housing market. it's slowing down, a lot of leverage is tell you in the property market. therefore, i think this is part of the measures to try to cool the market in china in a sustainable way. and i think the economy of china is currently -- by stop and go. if inflation gets out of hand, the government will come in to curb it. if it is too slow, they will enact fiscal measures, monetary easing. i think 2017 will be a year characterized by stop and go. rishaad: stop and go.
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well, that, of course, is going to be contingent on what happens with the u.s. now, of course, we have got the inauguration behind us, but a lot of the executive orders being signed. there is a lot of promise out there which, of course has been the dowg this rise of over 20,000. what are you making a little? at hisif you look inauguration speech, america first, american jobs are products. what this means is more protectionism, less trade. if you want to see what it is going to do in the first 100 day it would be about implementation, what he cans get from congress and how complex the issues are. it seems like empty trade and things he will frontload in the first hundred days. whether it is tax reform, deregulation, those will be after the 100 days or further out. in that sense, you can expect
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more uncertainty with this 100 days. if you combine that with markets at all time highs, one should be a bi tmore cautious. we do not want to chase equity markets. are fairly i think there is a risk of market pullback given his lines is towards anti-trade and anti-immigration. bank with arivate lot of private clients. what is their main concern? living in uncertainty. more so than ever. tops: i think there are three concerns, number one is donald trump, what he will do. that is the number one risk. number two risk is action what is happening in europe. we have a whole slew of european elections that we have to watch
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out for. brexit one of them. and of course we have the french elections and the german elections towards the end of the. the third risk is china, that is one of the risks he bore concern about. it is not just about the currency but the equity market slowing down. so, i think the three risks, number one, trump number two, european election risk and number three is china. rishaad: that brings us nicely that translates with how you answer those questions, and what does that result in strategy? james: i think in terms of investment strategy, our messages do not chase this equity market rally. what we want to play is a barbell strategy. what i mean is invest in the cyclicals. in the cyclicals, we like the consumer discretionary and
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technology. we think these companies can do well in an environment of rising prices and economic improvements. at the same time, a lot of these companies can benefit from regulatory changes. in terms of defensive, we like health care. look has been valuations attractive there. long-term prospects are very strong and health care. and they have pricing power in this environment of rising price. the bigger implication for us is that we want to -- reposition our bond portfolios for re flation. use the pullback in 10-year yield to reduce our duration in portfolios. we want to gain exposure. because these bonds allow our bonds to reset on higher rates. we want exposure to high yields in emerging markets to get that extra, carry, extra yield to gi ve extra returns for 2017.
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rishaad: right. thank you. coming up, a warning from petrochina where profit is set to plunge. we will have that and more. ♪
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just mins away from the start of trading in hong kong and shanghai. looking at this trade, back on lifting all boats it things at the moment. even the hang seng index reacinting with a half a percent gain. all of that against this backdrop of a sizable profit warnings from two of china's largest state owned enterprises. petrochina out with a forecast of full year net income that may have seen a drive down as much
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as 80%. thesteve's here with a look at oil side. cheap energy is what they are blaming. steve: it should not be too much of a supply, given the state giants in ht the oil sector have suffered. the petrochina, the largest listed oil and gas producer in china, says that full year 2016 income fell between 70% and 80%. those numbers we are not expected to get until the end of march. on pace for a record low full year profit, attribute to what prechter china -- petrochina called a drastically lower international oil price. buckscrude averaged 45 in 2016. 54 in 2015. giving you the numbers, 2015 $ofit was 35.5 billion yuan,
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5.16 billion u.s. 2016 profit drops by 70% may have fallen as far as 7.1 billion yuan. billion1om 5.6 to $1. u.s. 2017 is looking better. most analysts are expecting oil prices to go up with. andaad: every day i come in look at what is going on with brent crude. about 1.50 or thereabouts. stephen: you can see petrochina shares as they correlate to crude they mirror each other. rishaad: people trade off that. tell me about --there we go, there is the fellow.s stephen: crude down. rishaad: moving to an entirely different industry group.
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stephen: no offense to china -- rishaad: or the tours of the world who are watching us. don't forget the actuaries. stsomebody once told me that actuaries are people who find accounting to exciting. life,hne: this is china warning 2016 profit may have fallen as much as 40% to 50%. theirthe oil giants, stock prices correlate to the oil prices, these insurers and china investing a lot in the stock market. these are h shares, but they look into the investment in the a share market. we can see the comparison. see over the last five years the gyrations of the stock market in shanghai. they're very similar to the china life shares. 2015.eally soared, about
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and have been flat since then because again, there was a 60% fall in reported nine month net income in the first nine months of last year. 33% in the fourth quarter. so, that really correlated with china's index. which fell and then was up 3.3%. rishaad: good stuff, steve. they know it's with the best of intentions. just a look at markets. we had actually shanghai. it's turned negative now. was pretty much flat. 5, getting a boost of what happened on wall street. we'l talk about thel yen weakening against its american counterpart.
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resuming its sydney beijing flights. will be joined by alan joyce. he'll tell me what is expected from that route. and we have the market open in hong kong and over in shanghai. ♪
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withad: you are back bloomberg markets as we take a look at the ope in hong kong and in shanghai. reeling frome're what happened on wall street. a big boost when it came to european trading as well. noon yesterday, we were going to have a good day given where futures were at that point. we also have against all this a bit of dollar strength, sorry, dollar weakness. sterling 1.2641. we also got the euro moving to 1.07. that's what we got at the
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moment. when it comes to the equity session, 1.2% for the nikkei powered by the strong tailwinds coming out of the street of dreams. let's get over to the hong kong let's see how it all looks here. stocks we do have asian broadly higher and trading at the highest september. i want to keep us with going on in the shanghai state. we do have materials and oil and gas players on the decline. we have an update from the pboc, saying it is controlling landings in the first quarter after january. inare seeing a movement property, cement, and steel players comes we will keep an eye on that for the course of
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the day through the shanghai, is .he only portion of the red i did push back of the greek freedom we did get the yuan straley stronger. .5%.share at the cost are expending their games -- extending their games there. it is not a heavy gain -- heavy day in asia. some of the movers we are watching today. that has not been set up quite right. taking a look at what is going up on those indices. we have chipmakers like samsung leading throughout, and we are -- coscoing cost go we leading. and we also had can voters -- motors reporting a loss in the fourth quarter, and it does anticipate that uncertainty will continue and slow growth. the markets are falling.
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-- kia motors -- we are seeing patches of green in southeast asia. let's find out morris what is going on there. but get over to singapore. they have the first world news headlines. sources tell bloomberg the pboc has ordered china's banks to strictly control lending in the first quarter. after new loans surged in january. told tohave not been increase the growth of outstanding mortgages relative to the fourth quarter. that they may punish noncompliant letters by making them pay more in insurance. china has extended investigation into detaining crown resources -- crown resort employees. arrested in were
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october. boeing climbed to a record as the 787 dreamliner emerged from a decade of losses. the plane making is -- maker is forecasting higher revenue on the back of their jets. that sets off addictions of declining sales. boeing says it has four years of dreamliner orders invested. it is one of the dow's top performers. officials in the philippines againstn going up communist rebels. blago sheet or's the talks, but claimed -- rebel negotiators claimed to the talks, but said the army was still carrying out attacks. fighting has killed about 40,000
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people over five decades. day,l news, 24 hours a powered by journalists and analysts in more than 120 countries. this is bloomberg. wheels keep brexit churning for the british prime minister. she is talking trade with donald trump. we have the latest on theresa may. the first foreign leader to meet president trump in the white house. the thing is, it has been quite a wrangle to get there. >> it is interesting. our news reporting she has worked very hard to earn this distinction. i don't know if trade deals or something you have to parcel out, but she wants to make sure she is at the head of the line. trump seems to be eager to sit down with her as well. if the uk's leading the european union, they will present silly
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that potentially lose some export business. they want new tree gales -- trade deals to replace with they are losing. teresa told parliament that she is going to put the u.k. first. let us see what she says. theresa may: we will be looking for u.s. trade deals to improve our two countries, bring prosperity and growth to this country so we can bring jobs to this country as well. i can assure everyone that in doing that, we will put u.k. values first. >> every wants to put themselves first. has signaled they too want a quick deal with the u.k.. we will see how that works out, but also theresa may has agreed, after the high court decision that not only she will deliver the report -- she told parliament that as well. they are ready to extend that new short note that they were required to send the parliament
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on on -- out on, they're going to send that to the department today. sydni -- asing up, quantum resumes sydney and beijing flight, what can you expect?
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rishaad: qantas has resumed its sydney/bathing -- beijing service, five years after it was scrapped. analysts are catching up with people trying to get away. let's get to beijing. he is with the chief executive alan joyce. tom? we spoke with alan joyce, who flew here yesterday on the first flight up. allen, interesting timing of course.
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we know that with a short-haul and long-haul, there is a lot of capacity in this region. china's economy is slowing in terms of growth, so why now? >> the market is so different than we were last year in 2009. last year, there was a 22% -- 1.2 $1.2 billion million chinese tourists. australia is the most attractive place in asia, done to all -- according to all surveys in china. >> this is generating huge amounts of business. -- it says that americans market has on a lot with australia. one of the biggest areas we have seen growing is actually [indiscernible] for china. tohave signed a deal transport 50,000 liters of fresh milk onto china on a daily
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basis. we know what makes good business work. allen, that is just it. it has all this opportunity, the education site that things as well -- side of things as well, but you are behind the curve. why the taking you so long to reinflate this flight? we have just gone through the biggest transformation in our history. we are over $2 billion of costs being taken out, and we had to are in a position where business is sustainable, and we have record results last year. we have been expanding with new in san francisco that we win through a few years ago, and new services into hong kong, singapore, and of course we are , as regrowingnger and international business. that is what potentially we have been doing. rishaad: this has to be exciting.
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we are also taking the dreamliner's at the end of the year, and we're going to have london service starting. there is a lot of growth internationally, the cost basis wise, it there is probability and is time to invest in the growth. rishaad: houston we are going to compete with -- how specifically are you going to compete with chinese airlines already flying to london and the. how are you going to take the market? in fact, we would not have if it the spot in beijing wasn't for these imperatives. secondly, we are a premium airline, one of the top in the world. we know that our business product in the investment we made and it is this one of the best in the world. going between sydney and
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beijing, china has a $50 lead in airfare. people can demand that premium because people are willing to pray more from immune services -- pay more for premium services. rishaad: and he agreement signed between australia and china in december, will that do to yield? >> this market can grow even further, and capacity does happen on yield. we cope with our first coming down dramatically 10 years ago. shares were 30%, 40% higher than they were today -- are today, and conscious as an going higher -- qantas has been going higher. trips three domestic covering the continent australia. we get that huge benefit that the chinese flights don't.
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there's a huge result to us. your deskow are concert are you about the weekend yuan -- weakening yuan? >> even the chinese president says that the hundred million tourists could go to 400 million over a next decade. if australia keeps his 1%, that is 4 million people. we have huge growth occurring, and of course there is a lot of pressure on the australian dollar. interest rate in the u.s. are coming out and we have seen a weaker dollar than we have for a while. the government will probably want to see a weaker dollar there, so we also have that building, which is making australia more attractive as a destination, compared to some of our peers. rishaad: you also fly to hong
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kong in greater china. do expected -- do you expect to increase capacity their? we double the amount of life we have from sydney to sing high -- shanghai, we have a joint partnership in the east. we are growing due to that partnership. flywe now have planes that to kuwait, singapore, and vietnam, and we are using them to tailor services in singapore. we have never been as big as we are in china, and we take that opportunity and think the growth will continue with the partnership. will follow domestic markets with these terms as well. rishaad: it has been amazing to qantas doingnd see better. the opportunity is china is huge, desperate china is huge, whiteboard or smallest aircraft
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-- but why are you spying -- flying the smallest aircraft on this route? aircrafts the perfect for it. they have a perfect size, business class, and we have seen a dramatic turnaround in singapore and hong kong by uses -- using these. with theking money right size and costs for economics. over time, we have [indiscernible] potentiallyhat these the age three 80's in the region could be a long-term opportunity. we have great flex ability and growing the markets when the demand is there. in some parts of the year in hong kong, we put the 83 80's on when the year demands it.
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opportunity in the market and the scope of the airline gives us a lot of opportunity to jump into that and use those crafts. rishaad: with some brevity, you 830'st taking the eight you had in your fleet. are you can -- ditching the 12th as well? >> we will leave her as role for those 12 aircraft. -- we into london this fly them to london and to los angeles. we do not see a need for the last names. longer-range, better economics, and can operate london, and melbourne to dallas. we think that is a better aircraft that stands -- stretches our international reach.
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and purchasens rights for another 45, so you will see a lot more of that in the downsizing the market in terms of where the growth opportunities are. rishaad: you're going to start the london route early next year. how much of that is going to take away traffic from your relationships with emirates and using them as a stopover point to europe? >> we think it is very complementary because the gorates new of our plan to from australia to europe and were supportive of it. want is flying -- qantas flying to london is not going to impact the big hole that we are going to have in regards to the rest of the 37 destinations. what we think is that this route will generate a lot of interest
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from europe wanting a faster way to get to australia. it is three hours faster getting from london to perth on this route. it is what our faster getting to -- one hourelbourne faster getting to sydney and melbourne this way. this will be a great experience for the customers as well the amazing inner experience -- in air experience. so many times in our history, this is a game changer for us. a new technology coming out of a350ext decade like the may allow us to go from sydney to london direct, and technologies becoming a big friend to qantas and allowing us fly to direct markets that we can only imagine about the past. rishaad: your restructuring plan in turnaround plan comes
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june of this year. are you looking at other opportunities? cafeere a turnaround for a that entices you at all? >> i'm in love with the brand. there is a lot more we need to i can't wait to see the start of the perth london services. there are a lot of exciting things happen over the next few years, so i'm not going anywhere over the next few years as long as the board and shareholders want me to be in charge. rishaad: and post opec and its , howion to cut capacity does that affect your strategy? >> it didn't. done --t we always have did what we always have done, and it worked very well for us in the past. what we are trying to do is give and that protections, gives the business time to be able to cope with it. there for the
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next eight months, and we believe that we coped very well with it and have will per dissipation -- full participation and high-level participation. they can give us this per dissipation in it does collapse, and we think that is the way we will continue to work. rishaad: alan joyce, ceo of contests -- qantas for the first relaunching the sydney-beijing route. up next, frightening fraud -- fighting fraud. how these documents and flipped more pain on the troubled bond markets.
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rishaad: let's have a check with the latest headlines come with
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more, ask pulling up they try to cut cost of putting pressures on vendors. is the largest shift of custody assets ever. -- almost $20ttle trillion in assets. cinema chain luminaire for millions -- pavilions planning a $1.5 billion deal in the u.s.. help compete with bigger rivals. --na will never take a walled forecasts predict china will overtake u.s. as the largest movement market by 2020. belower-share profit, way the amount that has been
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penciled in here, even barbie couldn't help. mattel's largest brand is teclining for the larges period in three quarters. there is a load of things this is facing at the moment. liquidity, higher funding costs as well. and it is the latest target of financial fraud. what is going on here exactly? fears, those of the seals.s -- forged those are the keywords for the fraud that rocked the bond market in december. brokerage house in china is
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saying that its former employees billiond as much as 2.4 dollars -- of bond trades. the ceo was saying it is not my problem, but the regulators had to step in, as always, and courtney it for discussion. tothe end, they decided honor the contract. rishaad: what did it say? haidi: the bank said that documents and seals in its name had been forged for healers -- years. rishaad: extraordinary. >> but the bank says it is not my problem, somebody use a forged letter to guarantee those bonds. this was discouraged. are they going to be seeing
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more of this sort of stuff? slowing,he economy is companies find it harder to get refinancing, but they can't use tricks to get more financing. authorities have also said that is inching -- presenting financial market risks will be one of the priority this year. be tighterts will this year, which points to a tougher time ahead. rishaad: it has enough skepticism, investor skepticism, does it? foreign investors, they need to know china's financial markets are extremely allah tile -- volatile. repeat of this event in the bond market. it is one more thing investors should be looking out for. last lot nice -- last but not
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least, the forged seals tactic. just ahead, breaking fourth-quarter growth numbers are out from the philippines. the revisions to the previous quarter.
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♪ a.m., 9:00most 10:00 on the eastern seaboard of the united states. coming toad salamat you live from bloomberg's headquarters in asia and hong kong. this is "bloomberg markets: asia." ♪ china clamping down on debt, telling banks to limit the mortgage money they land. donald trump says nations without border controls were not really nations. washington,ding to
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telling them that britain and america can lead the world again. the trading day about to get underway in indonesia. for theooking for gdp fourth quarter out of the philippines. suggesting growth on a year on year basis, 6.6%, this after the revision for growth of 7.1% for the third quarter. that's what we are looking at at the moment. the philippine market ahead of that, the stock index of .5%. it was down earlier. let's get to sophie kamaruddin. reversing the earlier drop ahead of the gdp number. ,ollowing the region higher stocks extending the global rally.
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asian stocks trading at the highest since september. some highlights, the shanghai composite .25%, rising for a fifth day, led by materials and health care. rising forng up 1%, a fourth straight day, consumer staples, i.t., and banks leading gains. up over 1.3%, and the kospi of .6% there. earnings coming out of korea helping to drive that momentum. take a look at some equity movers. according touncing sources that there will be lone curbs in the first quarter targeting mortgages. loan curbs in the first
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quarter targeting mortgages. anhui and another cement producer rising on the back of that news. iron and steelmakers on the rise as well in china. yesterday, to steelmakers said they expect a turnaround in 2017 net income. rishaad: thanks. breaking news out of manila, fullin line, the first quarter under the new president. we got 6.6%, year on year. for 2016, 6 .8%,
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in line with estimates. in china, the central bank ordering lenders to curb new loans in the first quarter. this is a bit out of left field, isn't it? housing market showing signs of cooling down. they are seeing a surge in new lending, and they are bouncing curbing excess credit off funding choking in the financial system ahead of the seasonal lunar new year coming up, so it is a delicate balance. you talk to people in china who or applying for a mortgage involved in property transactions, they know this is happening. that me tell you what we are learning from people familiar with this story, telling
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bloomberg news that after the $1.8 trillion in new loans in 2016, the pboc said they ordered banks in china to strictly control new loans in the first quarter. $1 trillionan see twiceember alone, nearly the consensus estimate from economists. , $2.5 trillionar -- 2.5 trillion renminbi. that is pretty much the case every year, frontloaded lending in the first quarter and january. this reported request from the pboc allegedly is targeting new so all new loans are under these new instructions. given ontargets are
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the mortgage, and i do know a specific case of people who were trying to sell their home and they have had that mortgage approved by the bank in december, then the pboc in january said, well, it has been approved, but we are not going to let the money go to they held up the transaction. they can have everything ready to go, but then they don't get the money because the pboc has up, and thatld it can cause a domino effect. rishaad: the thing is here well, have so many details out of our sources. >> how do you get the banks to comply? rishaad: what are the penalties if they don't? >> again, there is policy lending in china in place, but often times thanks don't follow
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it unless there are strict penalties, and we are hearing indicated it may punish banks that does not --ply, including posing imposing higher costs, insurance fees, or reducing the interest rate it pays for deposits. they require banks to store cany at the pboc so they reduce the interest rate for holding their money, the states money anyway, right? rishaad: right. steve ingles on the curbs for first quarter lending. let's get the first word news headlines and find out more, here is rosalind chin. rosalind: profit at chinese industrial company slowed as prices rose as weaker demand threatens growth. $123ts rose 6.3% to
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billion, down from the 14% increase in november. industrial companies are struggling with debt loads, downturns, and trade risks with the u.s.. petrochina warning that full-year net income in 2016 felt by 80%, putting it on track for a record low profit. china's biggest producer said the slump was due to lower prices for global oil and domestic natural gas. however, it expects oil prices to rise this year. 1.2% so far. profit warning from china life insurance, flacking 2016 profit, dropping 50% thanks to stock market declines. the largest insurer says it is due to lower returns. the estimate put fourth-quarter profit between $567 million and
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$1 billion. -- linen lin plunged plunged after quarterly profit and sales failed to meet estimates. was $14 million , well below the 47 million dollar average forecast by analysts surveyed by bloomberg. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: right, the thick of the earnings season, so let's look at the results. some good, others not so much. david, where are you going to start with when it comes to this curious egg? with the badstart news, the big carmakers. kia did better than
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hyundai in terms of profit, both missed. sales estimates also missed on the bottom line, and when you look at the outlook, the fact that during the fourth quarter, that was weakening, and now are strengthening, so not boding well for the numbers. , long storybout kia short, we had net income half the level people were expecting. .perating profits $460 million we were expecting $500 million. sales missed by $400 million. third, profit fell by a just under $900 million, income falling there for 12 straight quarters. for hyundai, three big markets, ,outh korea, where volumes fell
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those partial strikes we had during this turned into a full-blown strike, so that hit volumes. also, you no longer have tax incentives, also hitting demand. when you talk about the u.s., the stronger u.s. dollar was hitting the bottom line, incentives, warranties went up, so when you look ahead though, it is interesting how carmakers are positioning in the u.s. one last thing on numbers out of hyundai, sales picked up in china, which is their biggest market, although the company does expect demand to slow, owns kia, of which hyundai 30%, expects sales momentum to recover in china and they plan to launch new suvs on the chinese mainland. about --now, what
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these are pretty good numbers, one thing? david: stellar numbers. earnings about a year back, and if i remember correctly, analysts were saying watch this stock closely because of the new launches back then for apple products, up 90% over the past year, up 2.7% today. , an you look at numbers supplier of memory chips to , and asales were up 20% one analyst said, everything has been extremely good. so itchange rate as well, does most of its business in u.s. dollars as far as revenues are concerned.
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currency often helps to inflate the bottom line. , andook at the stock price price target is 10% higher from current levels. thank you so much, david ingles. lg display, we will get to that later. still to come, the chinese premier talks of testing times and a bloomberg column. find out what he is referring to later on in the show. the crackdown begins, donald trump laying the foundations to put his border wall plan into action. ♪
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pushing donald trump is ahead with his controversial pledge to build a wall on the mexican can border, direct and
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funding to the project and curtailing immigration from what he called terror-prone countries. ramy inocencio has the details. ramy: it is happening. donald trump took the first step by signing an executive order during his visit to the department of homeland security today. the details go as follows, along with starting construction on the wall, it includes staffing border protection and deportation oficials, 5000 in terms extra border agents, 10,000 in terms of immigration and customs enforcement officers. take a listen to what mr. trump had to say. >> a nation without borders is not a nation. beginning today, the united states of america gets back control of its borders, gets back its borders.
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mr. trump told abc news that if will start to happen months."e "next few he reiterated that mexico will pre-and burst -- reimburse the u.s. for the costs. the mexican president has said that mexico will not pay for that wall. did see some, we stock movements in terms of the materials and building sector, three stocks saw a pop, eagle materials at the top, martin marietta, they saw a record share prices, along with falcon hitting the highest since november, so some interesting pops in terms of share prices. we have another
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document, an executive order stopping refugees entering the u.s. and also some of these countries which are on a terror prone list as well, so what countries are we talking about. ramy: tera-prone is the phrasing. andncludes middle east north africa, iraq, iran, libya, somalia, syria. in terms of the details, donald trump campaigned on the idea of extreme vetting. it looks like he will go ahead and do that, also a 30 day halt to all entries from those countries for visitors to the knighted states, as well as a six-month freeze for all refugee admissions. get up andcess does running for refugees, then they will take down the annual number to 50,000, so more
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than half. day five of donald trump's and he's focusing on national security in a hard and controversial way. sincere remy in a there, right. let's tell you what we have on the way, breaking down the philippine gdp figures with a senior economist, asking how the trump effect may influence further growth. ♪
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rishaad: we were looking at what happened with the philippine g in line.dp bank in l thank you for coming along. you just said that it is always like that, doing very well, 6.7% bang in6.8% for 2016,
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line. it is a great story. >> this is partly due to the fact they had an election year. you usually have an increase in consumption and a release of an top investment. this is one of the reasons why growth accelerated in 2016 verses 2015, and we think this trend will continue into 2017. not only is it having an upturn edit cycle, plenty of demand -- rishaad: and the promise whether it is there or not, a huge amount of spending on infrastructure. >> he wants to raise infrastructure spending by 9 trillion pesos by 2022, the end of his term, $180 billion.
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it is not just public spending. on thes to focus public-private partnership involving the private sector into public expenditure and wants to have 17 projects to bid in 2017. that means not just strong consumption, but an increase of private-public investment, boosting imports, at the same time oil prices are rising. that means the account deficit will narrow significantly, inflation will rise, and that means it leaves little room for the central bank to ease interest rate further. rishaad: that's it. also, inflation is an issue to, isn't it? a 6.4 percent growth penciled in for this year? >> right. rishaad: is it going to translate into the, a better lot for the philippine population, population which has huge
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linguistic advantages because of its proficiency in english and educational standards which are arguably among the top five countries in asia. he won on.what it resulted in investment upgrades, but did not filtered down to ordinary filipinos because we did not have job growth, and manufacturing, etc., and infrastructure spending was less than the 2% median target. this is something that do terror the philippine president wants to change. he can allow the country to capture its demographic dividend and this is very important.
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the philippines has a great future, and in 10 years time, it will also have a great future. they have to make it work. i want to move to the affect of donald trump on the asean. it is something people are deeply worried about. we have u.s. growth increasing. >> labor markets in the u.s. have tightened, and demand from the u.s., if you look at it exports, it has increased. ,n an increase of u.s. growth generally speaking, historically speaking, it should be positive for asian exporters. a caveat in that asian exporters have become more dependent on china, which is supposed to slow down this year .nd next
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asean will continue to try their best to think on a more optimistic side to keep the currency competitive. it was not just about liberalizing trade. there was a lot of different projects. >> the big difference between tpp and other free agreements is the service component. this is not only the biggest trade block and reduction of tariffs, but liberalization of state owned enterprises, which supposedly brings about positive change in countries, such as vietnam. lastly, you have seen the measures, even though we all mourn the death of tpp, the vietnamese certainly, it initiated this positive process that is already happening.
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are a lot of privatization efforts happening, but the government has taken steps to liberalize the market, and this has already had a positive impact on the country already. although, slowly. rishaad: very quickly, where does this leave this part of the world if there is a trade war between the u.s. and china? people will be, very cautious moving forward. these are very important markets, and if it is becoming more protectionist, it will be difficult for smaller countries, but we are not so concerned. we think growth in asia will be decent with the some deceleration in china, but a pickup in indonesia. philippines will continue growth into the future. rishaad: pleasure having you on the program.
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right, coming up, testing times when chinese premier things his nation offers stability and times of global uncertainty. ♪
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>> it is 10:29 a.m. in hong kong and beijing. bloomberg that pboc has ordered chinese banks to strictly controlled lending in the first quarter after searched in january. lenders have been told not to increase new mortgage lending or the growth rate of outstanding mortgages relative to the fourth quarter. one source says the central bank may punish noncompliant lenders by making them pay for deposit insurance. the qantas ceo says the push into china will continue as australia enjoys a tourist boom. benefitshere are big between the two nations.
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qantas will expand to more cities this year after restructuring. growing thee international business and making sure we don't -- and that is what we have been doing. this year will be an exciting year. we have beijing starting. we are taking the dreamliner's at the end of the year, further expansion, the first link between australia and europe with the perth-london service starting. profitability that has arrived, and now it's time to invest in that growth. says china has extended its investigation into crown resorts. chinese authorities arrested 18 staff on suspicion of gambling related crimes. the foreign ministry is providing consular help to three all strains among the detainees. asing climbed to a record
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the 787 dreamliner emerged from a decade of losses. the plane maker is forecasting higher revenue. that offset predictions of declining sales as going produces pure wide-body triple sevens. news, makinge the the stock a top performer. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: this is "bloomberg markets: asia", a look at markets, certainly half-full today. here is sophie kamaruddin. full or more with asian shares at the highest in four months with materials and financials offering the biggest gains, up over 2% there. oil on the rise and gold slipping, that risk on
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sentiment. that glass half full picture going on. japanese shares leading, up almost 1.5%. risingnghai composite for a fifth day, even as china's industrial profits disappointed. materials and health-care stocks leading gains on this index. nonferrous,efiner, on the up as well. this stock has risen 110% over the past 12 months. the hang seng rising for a fourth day. stocks on the hsi in the red, cathay pacific and sands china. lower after the casino operator posted weaker earnings
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given poor results from the macau operations there. elsewhere in the region, we have the kospi up 1%. their ofing a drop 11%. that is a look at the region. some nice patches of green coming through. rishaad: thank you. the chinese premier li keqiang saying his company will champion economic openness, describing china has a "anchor of stability" during what is a testing time. john, why don't you take us through his message first of all. >> sure. the main message is china stands trade,nness, openness of
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openness of economics. he recognizes that problems arise, but he says we should sit down and talk and be open about this and reach a consensus on how to solve those problems. qe says china is behind that, and as the world becomes more uncertain, we should remember these principles and not shy away from them. let's talk about timing. now?s he saying this i guess we do have somebody in the white house and that has not escaped him. obviously president trump has since done away with tpp. he said lots of things that one would have to interpret as being anti-globalization, anti-open trade, and it is also worth mentioning that the chinese president xi jinping was in davos with a message that rings
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similar to what the premier wrote about this week. rishaad: thank you very much indeed. joining us there from beijing. the brexitok at wheels as they keep turning for the british prime minister, heading to washington for talks with donald trump about trade. ,athleen hays is with me now theresa may the first foreign leader to meet the president at the white house. he wants to put america first, and she wants to put britain it first. -- to put britain first. certainly in abe position if you are theresa may to make sure you are taking to expand u.k. trade with the rest of the world, particularly the united states, that biggest economy in the world. theresa may needs it too because
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she's getting ready to leave her country out of the european union. is 10% bigger eu than it would be otherwise. toyou said, when she talked parliament on wednesday, she said she wants to put the u.k. first. for tradebe looking deals that improve trade between our countries, bring prosperity, and sure we can bring jobs to this country, and i can ensure the right honorable gentleman that i will put u.k. interests and u.k. values first. >> the trump team wants to do a deal quickly. interest of both leaders to say we are not turning inward. it is though they are saying we are ready to make deals, but we
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will make deals we want for our citizens and our country. had the high court decision, well, her team is ready to send their bill to parliament to be sign to get those brexit wheels truly turning now. rishaad: tell me about the reflation trade. tell me about what is happening here. what is going on? >> all roads kind of lead to donald trump, exports, reflation, everything. donaldare figuring that trump will succeed in boosting the u.s. economy and inflation, and that is pushing bond yields up around the world. 15, the japan 57 40 year bond yield nearly 1%, look at that uptrend. the blue line is the german 30 year, along the bottom that
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purple line is the u.s. 30 year, the longest bond in the u.s., up to 3% now. what is so interesting to me is that inflation may not be leading up to that trade yet. is that trumpiew fever will and soon. -- hasalled, again called, again, for the yen go back to 100. rishaad: ok, we have cpi for december coming through. tell me, what will that tell us? >> japan cpi will probably say japan reflation? not yet. 678,her bloomberg chart 4 showing the key measure, but bottom line, you can see it is yet.oving just
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in fact, the forecast for december cpi, the headline number of the zero point 4%, but core cpi is supposed to be down 0.3%, so it's not moving in the right direction. bloomberg story today, stingy pay raises put a brake -- rishaad: they have cash and they are not giving it to their workers. have notpanese unions pushed hard. they have settled for no wage increases. the boj officials said you were not see wages go up. rishaad: you will be in tokyo, once you? >> right. that's just it, we also have a spring wage negotiation coming up as well. there was a lot of hope for that, but it was a damp squib.
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right, ringing in the lunar new year with mobile payments spiking for the year. ♪
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rishaad: a quick check of the business flash headlines. is she was recovery plan may changes at its nuclear operations, possibly withdrawing from construction while keeping design and delivery programs. report earnings oniba february 14. the operator of asia's oldest stock exchange was 51 times oversubscribed for its ipo. source and others among
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sellers. the rival national stock exchange of india dropped offerings for a listing. world's biggest casino operating missing estimates. las vegas sands seeing $.62 a profit,urth-quarter rising more than 7% over $3 billion, saying "lucky" gamblers kept winning. ,ualcomm on the way down falling on sales and profit. second-quarter revenue could be as low as 5.5 billion dollars, missing the average projection billion, coming as qualcomm defends its most profitable division from
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regulatory and legal challenges from around the world. the lunar new year has a tradition of handing out red envelopes of cash, but this is changing as we enter the 21st century. has migrated to the smartphone, millions expected to send gifts digitally over the next couple of days, highlighting the sophistication of mobile payment companies and their ambition. tom mackenzie now reports. tom: chinese new year is a boon for china mobile payment companies, thanks to the digitization of this centuries-old tradition. over one billion mobile transactions are expected as people fire off virtual red envelope cash gifts and fire their phone. valued at 32 main dollars in 2012, china's mobile payment market was worth $1.8 trillion last year. alipay are
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the two biggest rivals in this space. it is all about getting the edge. in recent years, we have seen many players emerging in the mobile payments market, including banks and third-party payment platforms. the competition is so fierce that it is almost brutal. and wechat dominate with 90% market share, and that has drawn the attention of regulators, expected to wrap up controls this year. companies to put deposits at state owned banks, and is developing its own crypto currency. follow all the guidelines
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of any institution regarding financial services. as that adapts and will continue to adapt, we adjust our model to reflect what regulations require. market research firms estimate lenders lost $22 billion in payment revenue to in 2015.d alipay that disruption is not stopping at the borders. financial is trying to capitalize on 150 million chinese that travel abroad each year. in india's invested paytm and is eyeing expansion elsewhere. u.s.,look closely at the europe, and the right strategy there as well, so we do have a global perspective and global ambitions and will roll that out as we determine the right partners. tom: succeeding abroad is likely
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to be their biggest challenge yet. rishaad: it is amazing the growth we are seeing here. what about the competition in this industry? we touched on it in the package. there is this bloodletting going on between wechat and alipay. 68% of the market, versus 82% in 2014. wechat has grown from 11% in year, but doest leave room for other competitors. we've seen apple pay enter the market, baidu wallet, have jd finance focusing on wealth management. that brand strength,
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particularly in top-tier cities. so far, it relies on nfc rather codes that are popular in china. with apple pay, all you can do is make purchases in stores and make purchases on the apple app store. allow you and wechat to do everything from managing your wealth, getting a loan, bookingflights abroad, cinema tickets, all within a single app, and that is what will be the biggest challenge for the likes of android, some sun, apple pay, and the chinese smartphone maker whilhuawei. rishaad: how did these companies plan to grow their businesses with 1.4f china, and billion people, do they need to bother?
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the second part of your question is a good point. wechat have 800 million users. not all of those people are yet using mobile payments, but they have huge ambitions. -- company being ,he most aggressive is alipay ant financial group, milliong the 150 tourists that travel abroad, but they want to expand beyond that. haserms of the u.s., alipay tried to increase their footprint there. , we have not seen as an
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aggressive push by wechat. there is also that deal with paytm. that was a big boost for e payment and e-wallet use in india, but for now, it is all about moving from this traditional red him below to the digital version come and again, getting people here engaged over chinese new year. expansioneyeing abroad as well. rishaad: thank you so much for that. that is tom mackenzie in beijing. spot, oneng the top of the people looking to take over as the leader of hong kong. this is bloomberg. ♪
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rishaad: i am rishaad salamat. this is "bloomberg markets: asia." making his case to become hong kong's chief executive, john tsang says he's more interested in consensus than confrontation. what else is he saying? rosalind: the keywords as he prepares to run our harmony, consensus, inclusiveness, and
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said people are tired of the discord and he wants to find the middle ground. he is trying to differentiate himself from the others vying for the job. it is a difficult line to walk. they need to stay on the right side of beijing, but take into kongnt of what their hong people want and the popular feeling on the ground, so there has been a growing awareness and participation in politics in hong kong, especially since 2014 , some people going as far as asking for independence. is aid independence non-issue. hong kong has always been part of china. so don't even go there. he did talk about political reform and universal suffrage, and this is what he had to say. >> obviously there are still a lot of views from the community, and that must be reflected
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accurately and precisely to beijing, and if i were able to seize an opportunity to bring about some form of consensus, sure, this is something i would certainly like to pursue. this is action the aspiration of the people of hong kong. rosalind: he has yet to release hismanifesto, but says party's will be education, housing, affordable housing, land, and economic development. rishaad: how does he compare with his the people he is up against for this job? there are three of the four who have put themselves forward. there could be others in the coming weeks, but those are the main ones. out of the three, he has enjoyed
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a fair amount of popularity. among officials running hong enjoyed highas approval ratings. he scored 60.2 out of a hundred, not down to how the public likes them, because the election is a closed process. there is a committee of people who will be the ones who vote in the chief executive, and that committed the will be dominated by beijing loyalists. vote by the hong kong people, so we will have to see how that goes. march 26. rishaad: right, putting the date in the calendar. thank you for that. bright, let's tell you what we have coming ahead on bloomberg markets. shery ahn updating us with the
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big stories of the day. move by the pboc to curb excessive leverage and financial markets. the pbocow telling us has ordered the nation's lenders to strictly control new loans in the first quarter. we will discuss what that means for asset bubbles and enough funding in the financial system. we will dive into korean earnings, a mixed picture, the won the strongest in seven weeks. we will discuss all of this, including the trump reflation raid with our guest. that is next on "bloomberg markets: asia". ♪
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♪ announcer: from our studios in new york city, this is "charlie rose". charlie: hugh hewitt is here. his nationally syndicated radio show is heard in more than 120 cities across the u.s. area he interviewed president donald trump 13 times during the 2016 campaign and participated as a panelist in four primary debates. his new book outlines how this president and a unified gop could work together to transform the country. he calls it "the fourth way: the conservative playbook for a lasting gop majority." i am pleased to have you at the table. welcome. hugh:


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