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tv   Bloomberg Markets Asia  Bloomberg  March 12, 2017 9:00pm-12:01am EDT

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9:00 a.m. in hong kong and singapore, 9:00 in the evening in york city. i am rishaad salamat. haidi: i am haidi lun in sydney. this is "bloomberg markets: asia" ♪ rishaad: summons of stability, china saying the economy has improved with little danger of a hard landing. haidi: a different story in japan, data showing weakening activity on the factory floor with machine orders not exceeding expectations. rishaad: mark tucker to leave
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aia to take the reins of hsbc. the fall,de after korea's ousted leader remains defiant, saying the truth will eventually come out. are keeping and i on developments in korea. in a moment.ve macro data out of china, but do we received -- see a return to volatility or not? rishaad: this risk on trade back on again. we have the decision out of britain when it comes to interest rates, that touch of election on wednesday, seen as a precursor to the french election ther this year, but perhaps most important is the fomc. let's get straight to market
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action. 29 minutes away from the start of the trading week in hong kong and shanghai. .ere is david ingles your point, do we see of further sell on the news? it is expected across the board 100%. if everyone expects it, how do you make money on the other side of that trade? equity markets come event risks this week, a mixed bag across equities, bottoms not quite there yet. but now basically has come back down come flat for the benchmark. a flat session across measures. south korea in focus,. , .5%. oil just below $48 briefly,
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above that for west texas. $51 for brent. yields on the way down across asia. buthave a few exceptions, u.s. 10 year yields 2.58% on your treasury. the singaporean dollar, why am i looking at the singaporean dollar? for an look at mliv great piece of commentary there. some are saying you look at this pair. it was capped at the 55 day moving average. the last time we were closer to that was late january. we saw downside late last week. now, how does this boil down? comings this one note out and putting all this into context. of theiday, the easing property measures, some think that is a way to sneak it and when you look at what they are trying to do before we get an eventual hike in the fed.
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is not inw singapore the ideal situation when it comes to the economy. we might see that improve because of the oil price and pick up in the trade. have a look at property stocks in singapore, big pop on friday. we are seeing it slightly to the upside now. boring there. dbs .2 1%. there is a great story on the terminal. it is also on the website. for all theseook elections in europe, and we have one this week, the dutch election. seen as abt is now safe haven. this is a simple chart. white line is the five year. the blue line is italy. it is cheaper to ensure against
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default for russia then italy. that, and this other one, the spread between russian and u.s. treasuries, the lowest level. funny how markets work. the oil price also in play here. looking at a, hsbc, share price action as they named mark tucker as new chairman replacing douglas flint from october 1. we are outside the hsbc building here in hong kong. bealind: mark tucker will the first person from outside hsbc to take the role of chairman. said they were looking for replacement for the current chairman, they had already said they were looking for an external higher and a nonexecutive role. the chairman has been with hsbc for 21 years. aia's new ceo is the current
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regional ceo. he joined around 2010, around the same time as mark tucker. aia said the value of new business grew from $667 million in2010 to 2.7 $5 billion november 2016. in 2016.billion what is mark tucker taking on? challenges, some deep-rooted changes, controversies, job cuts, restructuring that she is taking on quite a challenge there. rosalind: indeed. is one of those banks that has seen declining revenue for five years.
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the last results were not that great and did not give investors much to cheer about before shares dropped on the day. it announced a $3.4 billion pretax loss for the fourth quarter and blamed that on slowing core markets like china and the u.k. china's growth had been slowing their, and the u.k. faces uncertainty around brexit, but a key focus on cost cutting, increasing targets by $1 billion to $6 billion and warned it faces more than $3 billion of revenue headwinds. that is partly because of currency movement, record lows, and unknowns around policy coming out of the trump administration. been under pressure from shareholders and undergone a
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series of restructuring in the last few years. and 2011, tens of thousands of jobs have now gone. in the u.k., a law requiring investment banking, commercial banking to be separated, but issues.e conduct mark tucker has a lot on his plate as he takes on that role at hsbc. haidi: quite a task there. thank you for that. rosalind chin in front of hsbc headquarters in hong kong. let's could you up-to-date with first word news with haslinda amin in singapore. china says the economy showed improvement in the first two months of the year. the national bureau of statistics says it's all output grew more than 6% in january and february, the services sector expanded 8%. it also says little risk of a hard landing. set a growth target
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of 6.5%. steve schwarzman says president trump is likely to temper his criticism of china, including his claimed that beijing manipulates its currency. schwartzman chairs the president strategic and policy form and a goodina has become -- outlook on relations with the u.s.. steven mnuchin wants to take a review of markets to see if china is cheating. india's prime minister narendra modi has won a resounding victory in state elections, allowing him to push ahead with his reform agenda. the election commission says the bjp has taken 216 seeds. .- seats it puts prime minister modi and prime position to campaign in 2019 for a second term.
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the u.k. brexit secretary is trying to do for our rebellion inside the conservative party ahead of a vote on monday that could trigger the process of leaving the european union. from davis is facing calls lawmakers in parliament to have a say on what happens if brexit talks and without agreement. sheesa may has indicated may launch brexit on tuesday if she wins monday's vote. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. i am haslinda amin. rishaad: the ousted korean leader park geun-hye has struck a defiant tone, saying the truth will eventually come out. it was a daunting and familiar task of rooting out corruption and political and business figures. what did she have to say here exactly?
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shery:shery: she suggests she wt up a strong legal fight. the ruling allows for criminal proceedings against her. prosecutors have named her a criminal suspect. it is not clear when prosecutors will summon her again and try to interview her. that is the focus right now. protests have died down here in , the epicenter of protests in the past few months. still, we are seeing some sporadic gatherings as there are so many issues at hand, not only president or former president impeachment and ouster, but also geopolitical tensions, including deployment of the u.s. missile shield. people have gathered to protest
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that the claimant, and police have gathered around the area to guard the compounds as we see a tense situation in south korea. still not a big gathering like the ones over the weekend where more than 20,000 police officers had to be deployed, and anti-park protesters gathered here, tens of thousands of them, to celebrate her ouster. rishaad: rooting out corruption's will be key here, isn't it? what are the changes we are likely to see on this front? one, reducing the power of the presidency, two reducing the powers of large conglomerates. efforts are being put on fronts, 40 and dykeman's handed out since the scandal, including the
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trial of samsung vice chairman jay y. lee starting last week. thecing the powers of presidency as another focus, and for the first time, i committee is meeting on whether or not to amend the constitution. lawmakers are weighing everything from a british style parliamentary rule to the system in france, were you have the president handling foreign affairs, and you have the prime minister dealing with domestic issues, but will this work? we have seen such efforts in the past and no avail, and this is a decade-long issue. presidents since the assassination of park father in 1979 have faced corruption allegations, and the former president committed suicide after a bribery probe was launched. rishaad: we are disgusting
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ethiopia's prospects with the prime minister. haidi: up next, losing faith in the dollar. why our next guest says the currency strength cannot last. this is bloomberg. ♪
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sydney. am haidi lun in this is "bloomberg markets: asia" inhaad: i am rishaad salamat hong kong. big week for the banks, the fed almost certainly raising rates on wednesday. joining us now is the chief management,n asset 110 billion dollars in assets under management. thank you for joining us. you are from london. what is bringing you to this part of the world? region where i
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will try to understand how the situation here is on the ground. we are bullish and emerging-market asia. what gives you that positivity? people have been concerned about not just the politics on the rise of protectionism, but the business cycle. >> this is where we are very optimistic. we see a clear improvement in global growth. are reportingions growth, inflation picking up, corporate earnings strongly up, so this part of the world is exposed to this cycle. that is why we are bullish on the region. haidi: i want to bring your fixingon to the yuan which has just come through, mostgthening the yuan since february 23.
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it has been remarkably stable or boring this year. do you see much follow toady for the u.s. seems to be getting at self together in terms of some sort of policy when it comes to currency? >> i think we have been actually bearish on the dollar. we are probably the only one in town. and china, the economy has stabilized, so i think there is volatility there will continue. i think the dollar will be weaker. let's not forget the u.s. economy is not doing that have been europe, so it is mainly a story about the dollar. i think the dollar is overvalued and everybody is long, and i don't see the reason why the dollar should be that strong. haidi: he really don't have any conviction when it comes to this dollar rally. what would we need to hear from the fed this week, something remarkably hawkish, for that to move? the rate hike is
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priced in. it is important to see if there is any big change in the long-term rate for federal funds. what we have seen in the past few months, the rate expect haitians have gone up, but not in the long term. this potentially could be a problem for markets, but i would be very cautious. fed will be athe huge concern for the next 3-6 months. had varioushave members of the fomc who have come out and ask this rhetorical question, which they have subsequently said no to. are we behind the curve? i keep asking this question, and they keep answering in the negative, and it strikes me as perhaps protesting too much. >> central banks across the world are behind the curve. if you look at the u.s. for
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atmple, an economy growing potential, an unemployment rate of 4.7, still and well below the rate of inflation, so we know the fed is behind the curve, but this approach will be slow, so i don't think the fed in the next 3-6 months will be what drives markets higher or lower. rishaad: right, so what does this mean for your strategy? you are underweight in the u.s.? about looking at bond markets around the world? there is this multiyear bond rally grinding to a halt in the states. yields go where inflation goes. as long as inflation is higher, until we see a big discrepancy between the u.s. and europe. in europe, bond yields are extremely low, so we see some
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opportunities being short and european bonds. we are more bullish in the u.s., but a lot of the tightening is priced in. we like emerging-market local bonds. too narrow of a wishing government bonds. just before i go, what are your assessments when it comes to where the chinese economy goes this year? abouthas been optimism the stabilization, but when you look at import prices coming off as good ast, is this it gets when it comes to that reflation trade? >> you are right. in terms of momentum, inflation is probably peaking. i think what is important to stress in terms of inflation, employment growth is strong across the world.
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i think there is some real inflationary pressure everywhere , but again, we are talking about inflation going back to normal from extreme low levels, nothing more than that. haidi: thank you so much. we will have to leave it there. up next, hsbc appoints mark tucker as group chairman. we will watch the stocks in the premarket trading. this is bloomberg. ♪
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i am haidi lun in sydney. this is "bloomberg markets: asia" inhaad: i am rishaad salamat hong kong. counting down to the start of the trading day and hong kong and china. pre-market, at .3%, theg gains of
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futures contract showing more positivity. looking at several stocks that could be making waves. when you looking at? haidi: i'm looking at the big win, hsbc-aia, but i'm looking at wanda. this deal toy had buy dick clark productions, a producer of shows like the golden globes. eldridge industries that holds the company has now filed suit terminating that $1 billion deal to sell dick clark productions to delhi and wanda -- delhi and wanda. they said they did not make payments on time and missed a deadline, so they are asking for a second $25 million breakup fee.
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this is about the broader story of how much of struggle it has been for chinese companies to keep up pace of that deal spree we saw last year. down 75 percent because companies cannot get money out of the mainland. rishaad: hsbc of course, a new chairman there, and he will be -- marcher october 1 1. leaving aia and going to the head of hsbc. bek tucker's first job will to find a new chief executive to replace stuart gulliver. aia share price versus that of hsbc. a 1% gain so far for hsbc premarket.
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the are is's ousted facing potential criminal charges. this after being removed from office in this cronyism scandal that has been causing problems across south korea. ♪ ways wins.
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rishaad: 9:29 a.m. on a foggy morning here. frome coming to you bloomberg's asia headquarters. i am rishaad salamat. am haidi lun in sydney. we are seeing a mixed picture when it comes to markets. it is a big week for event risks. the fed might be the least of boe, b oh i, all meeting this week, as well as dutch elections and geopolitics taking a role as well. let's look at the shanghai and
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hong kong markets that have just opened. we get over to david ingles. least we know hopefully what the fed will do so that puts it on the back burner. when you look at volumes, they are low. there are lots of event risks. equities getting a decent bit, most stocks on the way up, the hang seng index .5%. falls are continuing to seven basis points in the philippines. bps lower here on your all strain to your bond. .e had a fixing from the pboc that was expected and place into the weaker dollar store this week. some moversat across hong kong markets, hsbc,
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big story there, a change of the top. hsbc, aia downside 2.7%. yingde gases with some changes point -- 1.61%. have a look at this chart. last week saw the biggest amount of inflows into the south korean market going back to july. it was the first time we have seen $1 billion of net portfolio inflows. here is the ticker at the bottom of your screen. looking, butds also affords looking because were seeing a pickup and momentum there. to this whole reflation story, ppi data out of japan this morning, that is your top handle, the first time in a
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bothtime that we have seen economies show inflation out of the factory gates, so that is well supportive of this reflation story. case of basey a effect? we will have to wait and see more data. at this point, 1% ppi in japan. story, this is the spread between your japanese 10 year treasuries and u.s. 10 year treasuries, capped at two basis points. thanks a lot for that. david ingles there. asian stocks mixed, the yen fluctuating can let's get to first word news headlines with haslinda amin. ousted south korean president park remaining defiant after being removed from office i the country's highest court.
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home sunday after leaving the presidential palace to be greeted by hundreds of supporters in her first public statement, she says she was confident the truth would come out. park is facing criminal charges for abusing presidential powers for personal gain. former senior j.p. morgan executives may be permanently excluded from the banking industry after being fined in a bribery investigation. they worked for the lender and a ship. the fed says they hired interns and employs to curry favor with officials and clients in china. j.p. morgan described the itsuct as unacceptable and hiring practices have been improved. turkey's war of boards with the netherlands continues to worsen with new accusations on both sides. president erdogan has called for sanctions against the dutch after one of its ministers -- ministers was denied entry to
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his consulate in rotterdam. accusing are to one is the netherlands of acting like an "banana republic." largest foreign bank said it may consider alling a stake to allow foreign partnership. the government is considering letting foreign investment of up to 35% of local companies. myanmar is one of the region's under-bank countries. under-banked countries. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: looking at park geun-hye. she has left the presidential palace and returned to her private residence in seoul after being removed from office. brian fowler is in tokyo. north koreans making a lot of noise, china objecting to the deployment of the thaad missile
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parks in the south, and departure is seen as a negative in terms of creating a lyrical vacuum, or perhaps there is upside in all this? >> i think it is some of both. is a political vacuum in that sense we have a caretaker government until elections in may, but park herself was on the back burner ever since parliament voted to in peach her. she was invisible as a leader, so if anything, friday's impeachment clears away doubt and allows the government to move forward. there was a lot of uncertainty and there is possibility that with the new government, liberals returning to power for the first time in nine years, you could see improvement in relations with north korea and china. many risks and challenges
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for the new leader to deal with, but economically, what are the main ones? >> on the economic side, you have policy options there as well as reform. starting with policy, we don't expect to see any monetary policy this year vis-à-vis stimulus. if anything with the fed hiking rates, the bank of korea will lift interest rates to keep pace to prevent large outflows of capital. however on the fiscal side south korea's debt to gdp ratio is the lowest in the oecd. it's fiscal deficit is set to shrink this year, so there is wiggle room and we could see $5 billion to $10 billion in extra budget as early as the third quarter this year, so we may see some of that top during the campaign season. country'siously the
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conglomerates paid a part in all of this. what does her removal mean for these conglomerates? >> we will have to see a little bit. removes her men from immunity, so she will be having to talk about what happened with sam son, and that , and that -- samsung could lead to a reform of the conglomerate system. there has been talk of reforming for a long time, but once they get into office, that talk simmers down with the reality own the top 10 come, it's about 27 percent of all business investments, so we won't know until we get the new administration in office about how serious the reforms will be. and reform policy, there is a lot to be gained from improving relations with china. china takes 25% of south korea's
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exports, and half of all visitors to south korea calm from china, so that is a big relationship that could improve with the new administration. ahn wasike shery saying, this could potentially be a reset and terms of the political relationships. that.you for brian fowler in tokyo. the path to that first to rate rise has become smoother thanks to the strong jobs report on friday, but brexit is looking more rocky. let's get over to our global economics and policy editor kathleen hays in new york. if there was any residual doubt ver whether the fed could go this week, those numbers got rid of them. >> the numbers were more than strong enough for the fed to justify the move on wednesday that it has been advertising pretty for surface of a the past couple of weeks. the pastciferously
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couple of weeks. 230 5000 jobs, unemployment , we, and a lot of this think of services driving the u.s. economy, but goods producing jobs. take a look at this chart, #6684, construction, mining, and manufacturing had their biggest one-month jump in 17 years. warm weather boosted construction jobs by 60,000, so that was a big part. the rate hike probability is 100%. the newlyon is revised summary of economic that projections, gdp, employment, inflation, and how many times the fed should hike rates this year. the narrow consensus was for
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three rate hikes. if the fed is on a rate hiking path and a sense of a stronger economy, will that moved to four? this is maybe why some of the #5687,y not so fast rid an estimate of wages and employment. the white line is the employment cost index, paychecks and benefits. hourlye line is average earnings come up 2.8% year over year. it seems to be plateauing and not moving higher rapidly. , waget the atlanta fed growth chakra, the yellow line. it seems to be coming down. if you don't see wage costs moving up, how worried are you going to be about inflation, so we shall see. that is probably the most interesting part of the debate come interesting piece of news for the markets on wednesday afternoon. rishaad: brexit of course is the
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thing that is consuming u.k. politics at the moment, theresa may trying to avert a revolt in her own party. what are the implications here? >> more slogging for theresa may and uncertainty over how this gets hammered out. u.k. supreme court told the u.k. cover meant that you can't trigger brexit -- government that you can trigger brexit on your own. the house of commons agreed to this bill for her to go ahead and trigger brexit them up at the upper house has looked at it and added amendments, and one amendment they want is to have a real say in how the negotiations turnout, particularly if they start to fail. again, theresa may has a self-imposed march 31 brexit deadline. said on the bbc, please don't tied theresa haze manns, just move this ahead. , justresa may's hands
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move this ahead. her biggest complication is getting the house of commons to vote with her on monday to reject the amendments the house of lords put into place and give her a free hand to move ahead. we shall see. you.ad: great talking to kathleen hays there in new york looking at the trials and tribulations of british prime minister theresa may and looking ahead to the fed. when it comes to the fed reserve come up for coverage of that decision and special programming from 1:00 p.m. wednesday new york times of a 1:00 a.m. if you're watching in hong kong, so early there. so keenly awaited. haidi: we look at asia's economic ties with ethiopia. this 5 -- prime ministers special adviser is next. this is bloomberg. ♪
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rishaad: i am rishaad salamat in hong kong.
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this is "bloomberg markets: asia" haidi: i am haidi lun in sydney. has sent a formal request to meet union leaders at the world's biggest copper mine e, the first attempt to discussionsince broke down. -- cut has hurt prices supplies and bolstered priced on the london metals exchange. aberdeen asset management ceo will focus on external affairs after his kind -- company merges with standard life. leave acquiring aberdeen for $4.6 billion creating britain's biggest active money manager. size as well, size matters in our business because the
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sovereign wealth funds want to give their money to the big global giants. indonesia's automakers group calling for tax cuts to help boost sales of sedans and southeast asia's biggest market. the group says that sales may rise to 20% of the overall market if the levees are reduced. the trump administration has stressed it won't talk to countries that use currency devaluation to gain an average in trade. michael furman says washington has long been strong when it comes to trade rules. oni think we are focused trade enforcement. obama administration brought more actions against other countries than any other country
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in the world, 20 six cases, 16 against the china. we won every case they got to conclusion, so we have taken trade enforcement seriously, and secretary ross does as well. they have talked about using unilateral tools rather than the wto, and the world is waiting to see what that means and whether the u.s. does so within its debbi teal obligations or , giving its obligations other countries an excuse to retaliate or imitate our behavior. >> could you have been more when it comes to enforcement? for was the bar you set as the u.s. trade representative? focused on enforcement and tooling up for it. we created the international trade enforcement center which broadened resources from all over the government, treasury, state come intelligence community, others helped us to make bigger, more complex systemic cases. we brought more cases than any other country in the world.
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there is always more to be done, and we filed several cases that are now in the laps of the trump administration to follow through on to make sure they aggressively pursue those on behalf of u.s. workers and u.s. firms. there is always more to be done, but the bar we set was to bring systemically important cases, cases that pointed out significant distortions in market practices. thatre successful in doing doing countries like china to remove a number of offending practices, and that's what we focused on. rishaad: one country looking to work with the new u.s. administration, ethiopia, africa's fastest-growing economy, quicker than any other country in sub-saharan africa and the past decade. let's discuss that with the special advisor to the ethiopian prime minister, arkebe oqubay. long way.as come a
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tell us the story of the journey. , a veryou indicated toficult situation, and leverage from peace and democracy. improvingforecast on the livelihood of the population. since 2000 come the economy has been growing quite fast. the last 13 years, gdp has been 11%, and currently we are looking at how to accelerate the growth from agricultural to andfacturing-led growth believe we have a big advantage in this respect. similar to china, it appears ethiopia is following this development path of going into deep reforms to deal with
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these issues of corruption and transparency which are a hindrance to longer economic growth. can you tell me what these reforms look like? it has been reported that's why the party congress has been pushed back to next year. and you confirm that? forecast on how to improve good governance and accelerate the economic growth. for the governance issue and the economic growth, they are inseparable. we have been looking to keep the momentum and come up with new packages on how to attract new investments, create manufacturing jobs, because we want to create millions of jobs for the youth, and we also want to increase our export performance. rishaad: stick with us, lots more to talk about. we will continue our chat in just a few minutes. ♪
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am rishaad salamat in hong kong. this is "bloomberg markets: asia" haidi: i am haidi lun in sydney. let's bring back our guest, the special advisor to the prime minister in ethiopia, arkebe oqubay. i want to talk about these foreign-exchange reserve shortages. $3.4 billion in reserve, just enough to cover two months of imports. what is the current number and why isn't this data made public? what measures are being taken to address the severe shortage? growthfast economic demands importation of machinery, particularly when fracturing. the current forecast is on
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export performance, which will revenues in terms of foreign exchange. for instance, we have currently developed one of the largest industrial parks expected to generate $1 billion, so that is why we are focused on export performance. believe this is a short-term problem. rishaad: let's talk about the asian infrastructure investment bank. this will be one of the main ways of getting funding in this part of the world. what about africa, ethiopia, what role have you asked to plate with aiib? membership requested , and it will be a member and the second draft.
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the country has invested heavily in infrastructure, spending up to 50% of our federal budget in .nfrastructure rishaad: what specific projects are you hoping to help with then? the main focus in terms of infrastructure is the main focuf infrastructure is synergy -- energy. last few weeks, we integrated three 2000 megawatts, one of the top three largest hydropower
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projects and africa currently. energy and transportation are in key we need to develop order to make ethiopia a manufacturing hub. to make ethiopia that held. what do you want to manufacture rishaad: what you want to manufacture? jobs,want to create more but also multiple sectors including pharmaceutical. because of the big population, we have a big market for the pharma industry. because of the widespread logistics network, we want to use it as a platform for exporting pharma goods. rishaad: minister, thank you so much for joining us today. arkebe oqubay from the ethiopian government. >> thank you.
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rishaad: the next hour of the show, shrugging off the scandal, where south korea's biggest companies stand amid reports of corruption at the very top. ♪
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>> oil change at the top. china says the economy has improved with little danger of a
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hard landing. >> a different story in japan. machine orders missing expectations. fall.ide after the south korea's leader sing the truth will come out. >> pay bit of a mixed bag when it comes to the asian session. participants get their head not just around the fed, but the bank of england, bank of japan, bank of england. let'sons in europe and take a look at how things are erring at the moment. jules has the latest. see, a veryou can next picture.
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of have seen a little bit fluctuation and then you have health care and financials in the red. as a look at the individual market, you are think that fluctuating really play. it is slightly higher at the start of the day. a little more upside coming through there. some weakness in china. once again, solid rally coming through in some of those shares. some weakness in australia to kickstart the week. they look at some of the individual stocks we have been watching. toshiba denying reports it is selling its tech stake. him earlier on burden -- bloomberg radio and he
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said gold is a place to hedge at the moment. 30%. trading at you have got lg electronics looking quite solid as well. roughly 20,000 marks on the first day. that was the most ever. to kickstart the week, very much in focus on bank watch for it it has been a muted start from asia. you have the bf jake coming through along with the fed. everyone at the moment in a way and see mode. tuchman as its new chairman. get over to the asian headquarters in hong kong. outside the agency headquarters here and hong kong.
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outsidel be the first to take on the role of chairman to replace douglas flint. for athey were looking replacement because it was coming to the end of his term. it would be a nonexecutive. aie seo for was the seven years. he has been in this region for decades. focus.hina is a key be to findjobs will a replacement for the ceo.
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possibly, 2014 -- 2018 and she will be looking for a replacement. shares fell -- sorry, rose and aia shares fell for it at last check more than 2%. here?t is mark tucker he has been going through deep-rooted changes. hsbc has been struggling with declining revenue. was ast result, it disappointment for investors. afourth quarter basically mess for hsbc and it warned there were challenges coming, about $3 billion or more in the form of things like currency
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movements and the donald trump administration. also, record low interest rate and the poor markets in china and the u.k. uncertainty in the last few months or so, especially with the brexit. itselfs been revamping because of shareholder pressure and it will be rish rupturing tens of thousands of stocks. if the -- there's also been compliant. most of it -- it has a lot on its place. aia didcompliant. group toices 2.7 5 billion -- $2.75 billion
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$2.75 billion. big ambitionsving for asia. back to you. >> thanks for that. in front of the hsbc hong kong headquarters. let's get you caught up. korean president is remaining defiant after being removed from office by the country's highest court. monday to behome greeted by hundreds of supporters. statement, she said she was confident the truth was come out. chargestaking criminal for abusing personal -- presidential powers for personal gain. the region.e across
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-- talks normally take place every six months. he says he plans to contact the north korean mission at the yuan this month or next to arrange a meeting. --it may be willing to sell a stake to a foreign lender. any sale would be subject to changes to the country's banking laws. the government is said to be considering letting foreign investors 35% of local companies. of the most under banks countries. -- allowing him to push ahead. the election commission says it has taken at least 216 seats in the state assembly and is leading in more than 90 others. primesult puts him in
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position to campaign for second term. global news, 24 hours a day powered by more than 2600 journalists and analysts from over 120 countries. this is bloomberg. >> thanks for that. still ahead, a big win for modi after his party won a clear majority. >> discussing market strategies. to mode i
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>> this is bloomberg markets: asia. -- this is bloomberg markets: asia. a first bondrs
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deal outside the market. the company joins coca-cola, apple, and other regions. takata is now being sued by nissan, ford, and bmw. they claimed they withheld information a cause airbags to rupture. >> reports from tokyo say toshiba's loss could reach ¥1 trillion. from -- the mary news.- yomiuri
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beijing saysals in the economy shows signs of improvement in the first two months of the year will. -- two months of the year. this new story has been driving for reassuring markets for a few months. the first two months of the year , the data is hoarsely unreliable. >> that is why we have to wait until early march to get a read on what is happening in the economy. this time, we got the numbers a little early. the head of him national bureau of statistics speaking on the sidelines said industries expanded more than 6% in january and february. that suggests a shade higher.
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getting images here taking place in beijing. what was the message out of this congress? it seems to be fairly upbeat, isn't it? always -- theis rest of the world in need for a second up for reform measures. i think that was very much the story again this year. suggesting some concerns and very much suggesting steady progress on incremental reform.
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you.ank we seem to see a pullback. and i promise says three dynamics. let's find out what they are. something. three things, what are they? the upgrade of china is in the of eking about the regional context. i think we are at a juncture having a good start. there are three key issues that are likely determining equity markets of the next few quarters. the first and most positive is inflation dynamic. the area we would highlight here is the improvement in nominal gpd growth. most of the think in terms of real gdp growth, but the increased inflation is through corporate earnings and market
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performance. to give you one number, china we have a 270 basis points in nominal gdp growth even though we are expecting a deceleration in real gdp growth. -- increased in inflation the increased in inflation -- the increas -- >> how useful is nominal gdp? japan's is on the order of 1% to 2%. basically, the change in nominal stress.th takes npl we have upgraded our view of china banks. that is basically the first factor. the second and in between
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now iny is peaking right the next couple of months. in idea that growth is good -- ofof momentum of go momentum. , more this thing together specific drivers and we think that is china. china has a best nominal gdp. we also have the idea of the policy put into the congress and also the china specific southbound flow coming into contact -- hong kong.
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investors at decade record underway of 300 basis points. if you put all this together, we think china specific arguments on a both the bases are pretty good. >> you mentioned, southbound why this huge discrepancy. moneyhink there is some coming in southbound. partly there is a correlation between the u.s. dollar exchange same point,o the but just better evaluations and opportunity. the come and of these three factors are driving the sector of growth into the stock market. heidi: you say you have upgraded
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chinese banks. officials andweek their some lenders that have put more assets on balance sheets. true.hink that is very we are very much favoring the larger banks because those are the one that have the better quality and overall growth. we would certainly -- certainly be more favorable of the larger banks and the greater asset qualities we issued. heidi: i want to pick up what you picked up before about this being the peak of the global recovery. why is nobody questioning or should we start questioning this trade? it seems moderate seas get picked off one by one. case in point, the massive selloff in oil last week. is it time to start rethinking?
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>> great question. i think this is a message we had in our peace. we are moving into a more much or phase. if you look at the internals, previous leaders during the fourth quarter when it was very trumphe trunk -- inflation trade. now we are seeing it, the commodity and energy side and we think banks -- continue ourng to chat in a couple of minutes from now.
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>> this is bloomberg markets: asia. --
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>> chief asia-pacific strategy that goldman sachs. we have seen a little bit of a the edgeshould slightly down. what are your views of this? strongall, we are a dollar and the laws strict -- logic is pretty clear. we have recently shifted our views to fed increasing. we are now going march to september instead of june to september. it has all been brought lord. that is likely to get the dollar back up because you can have widening interest rates as well as a number of currencies in asia. the key question is given these risks have come back, what does
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it mean for asian equity markets. basically history says it is not until you get the fourth increased at the bottom that it starts to impede asian equity performance. a little bit of wiggle room from this analysis. i think we need to get the intraday between a good fed hike and a bad fed hike were what reasons the dollar is going up. in a nutshell, a good fed hike is when there is more growth driven a bad one is more inflation and capacity. we think we are still in the category where it is driven by growth and given the fact we see other reasons for earnings growth to improve, we think we are in a cricket competition of
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growth and we can withstand some moderate increases in the fed as well as the dollar. heidi: it has been a very high risk. a lot of action has been the u.s. tenure picking up last week. this is promoting the market. is he right? think u.s. tenure yields go up. we very much have been in harmony with that. the long and are going to be rising. historically, this has been a challenge for equity markets in asia because higher interest rates and higher dollar has made evaluations -- valuations
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impressive. we think it will improve more than the market has an expecting. that is something which tends to help valuations for it right now, we think the intersection kind of two forces neutralize each other and the appropriate valuation for the 13.4 to 13.5 about times. don't bake in any multiple expansion, you could still get some decent return here. atwhat happens when you look what is going on with the chinese bond market? how does the fed play into that? of the regional equity markets, we think they can move higher. although, out of the strongest
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--t of inflation, momentum the overall growth is still positive. 10% total return which is still good enough in overall return. specifically has some specific drivers which help to perform better. quite -- what the fed is doing now -- >> what the fed is doing now? focus is ony stability right now. there's political venting taking place and we think the overriding objective is to maintain a stable environment and one we don't have too many surprises that we are looking at. >> always great to have you on the program. coming up, we will discuss australia's probably market.
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the economic happiness that people will be enjoying as well. scott morse and is next.
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♪ is 10:29 in hong kong, 1:29 p.m. in sydney. to step down as ceo and president of aia to become group chairman of hsbc. the insurance executive will take up his new role on october 1, replacing douglas flint. one of his first tasks will be to find a successor to stuart gulliver. china says the economy showed signs of improvement in the first two months of the year. bureau ofal statistics says industrial output in january and february group more than 6%, while services expanded 8%.
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the bureau said there is little risk of a hard landing. premier li keqiang set a growth target of 6.5%. rebellion that a could trigger leaving the european union, david davis facing calls to have a say on what happens if brexit talks end without agreement. priming us to theresa may says she may launch brexit on tuesday if she wins monday's vote. iceland is back, exiting capital controls eight years after its banking crash. the government says effective from tuesday, it will lift almost all remaining restrictions on citizens, corporations, and pension funds, giving access to global markets. iceland has spent eight years cleaning up the collapse which triggered the country's worst recession in six decades. global news 24 hours a day powered by more than 2600 journalists and analysts in more
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than 120 countries. this is bloomberg. i am paul allen. haidi: thank you for that. this is "bloomberg markets: asia" i am haidi lun in sydney. rishaad: i am rishaad salamat. we saw the close-out of the morning session in tokyo. checking the pulse of investor sentiment. yes, japan is better than the early session, the yen retreating a little, up like .2% on the topix index, a huge rally in japanese equities up 1.2%. juliette: they are still holding on to those highs of december 2015, some upside in the china morning session on the csi 300 index come up by .3 percent, and a solid rally in hong kong. australia is down to the
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downside, down .2 percent, mixed commodity picture hurting the aussie market. we have had that ppi data from japan. i want to show you one of the charts on the bloomberg. china have tond bring consecutive sessions of ppi coming through, so paving the way for stronger consumer inflation. we are watching that number. japan producer prices came in line with expectations year on year, a rise of 1%. this is the first time china and japan have rising ppi for to bring consecutive months, this coming ahead of the boj march meeting on thursday, reports we could see bond buying tapered by 18% in the coming year. australia on markets, the yield on the 10 year government note sliding.
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it was down three basis points, now two basis points, but 2.94%. on friday, getting towards that 3% level, but we have seen some surge,across the globe drop, since we have that u.s. jobs number come through. haidi: that's right. some steam coming off that 10 the treasury helping australian 10 year. isurge in household debt prompting australian securities regulators to look into mortgage standards after scott morrison met with regulators to talk about the stability risks posed by the country's red-hot property market. scott morrison is with us now. great to have you with us. reportsve been various of rifts between you and the prime minister, that you have been sidelined. can you address that? there is precedent. word for that and
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austria, but you can't repeat in on television. it is absolute nonsense. the promised her and i have and continue work closely together. i haveprime minister and and continue to work closely together. when it comes to all matters of the government, and it is my job to work closely with him as i do, and the two of us go back a long time. haidi: i want to get back to what we started with, these meetings with the rbn about the state of systemic risks in australia's economy as a result of the property market we have had. our protection measures in the offering? >> we do have a situation of risk as it currently sits. the latest rises and credit growth are still below the 10% mark, the cap put into place
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recently come in there was a good response to that, but we are seeing it rise again, and prudential regulators look at these things, and i sat down with him last week as well as the rba and treasury officials to look at these things. the current account deficit is now less than 1% of gdp, the narrowest current account position since 1980. we are consolidating our budget come up moving back towards balance, consolidating at .5% of gdp a year, so our financial situation is strong. the bond market say that as well about australia's position. we have been doing well in the issuance of government securities. you do have to keep an eye on this, and the regulators do detect tension. haidi: further measures or a straight recession that decision from the rba is on the table? >> you would not expect me to
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comment on that, but the regulators are always looking to ensure that there remains the appropriate tension. those meetings last week were important, and was an opportunity to be briefed by them about how they are seeing the situation. ony are taking a close watch it, but the macro conventional -- credential measures put into place have had a positive effect on managing this issue, but overall, the household that position is around mortgage debt, 80%. in australia, prices may be high, but they are real. housinge of affordability and housing prices is the mismatch between supply and demand, not the function of a credit bubble. prices, real values, and what we are working to do is to put downward pressure on those rising prices by addressing supply challenges and working with state governments
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to achieve that. rishaad: what exactly are you doing to address that mismatch between demand and supply and creating the conditions were more supply comes on? >> that will be outlined in our budget that comes out in may. what we will be outlining and that budget are measures that deal right across the housing affordability spectrum, from the social housing and homeless first right through to home buyers trying to crack into that market. have governments, whether new south wales or victoria, where issues are most significant. we are starting to free up supply levers and state economies. just recently, we had the victorian government move to open up land to develop, and also introduced a new measure which would be pricing effectively a tax on stock.
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holds a property which they are not leasing, so basically not available in the market, then they would pay a higher tax burden on that property, because we need all the stock out there on the market, and that is what relieves the pressure, particularly the rental market. that is a good initiative, but we are looking to encourage all these initiatives. from cities to the countryside, looking here at the agricultural economy, going great guns, massive surge when it comes to grow there. how are you planning to put that back into communities there? and also tackling this lopsided growth story that characterizes the economy in australia? economy isralian diverse, whether the agricultural sector, which has had a good last half year, 8% growth in the december quarter, 23.7% through the year.
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it contributed to 0.2% to our growth in the december quarter and the september quarter, which you might recall was negative. two strong quarters of growth. you combine that with the service sector, and that is contributing 0.6% to growth. our economy is diverse, but what's happening in the agricultural second -- sector. i was in the new england area, the north western part of new walesell's -- new south moving towards the coast. area benefiting from the improved prices and finds they are getting in our export trades. we have been working hard on export deals to ensure that our farmers and producers are able to get the best prices and best access to markets, and we are seeing that cash flow through to those regional economies.
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the best thing they can do with that money is spent in australia in those regional towns. they are building hundreds of .ouses haidi: i put this question to the prime minister when he was on a few weeks ago, and he did agree with me. the national fixation with the aaa rating and retaining that rating, is it getting in the way of making better decisions when it comes to infrastructure and our ring when the going -- and borrowing when the going is good. is the preoccupation with getting the budget balanced preventing these decisions being made on political levels? >> all of these things are achievable and must be achieved. we want to retain the standing we have obviously, and at the end of the day, the bond markets will decide our relative risks, and i think they are assessing that in positive terms. what we have seen from the
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ratings agencies was a reflection of that. the issues raised in the past had to do with the current account deficit read that is at one of its narrowest levels since 1980. it does mean we need to continue the growth story. australia is in its 26th year of consecutive annual economic growth. that will make it the longest run of any annual economic growth and recorded economic history. that does not happen by accident. it means you get all these things in balance come fiscal consolidation, investing in infrastructure, ensuring a strong growth story around services, exports, and trade. all of it is critical, and we are doing all of it. rishaad: ok, you talk a good book about the economy. what worries you most about the austrian economy right now? >> the biggest challenge we have
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is to ensure that what australians are earning is increasing. we have had flat wage price indexes for some time now. increasing what all strains earned, wages, small businesses, that is the big challenge now. that will obviously flow-through into government revenues and improve household consumption, and this is the real challenge for us. post mining investment boom, we had a 30% fall in terms of trade , a significant drop in terms of investment in the mining sector, which was driving incomes. late last quarter in december, we saw an improvement in some prices, which supported those sectors in the but wage prices, the wage earnings of our strains has been flat. it has been a while since they have had a good pay rise. you are not going to earn more are notusinesses
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earning a profit, so the profitability of small medium and large businesses is critical to australians earning more, and that is why we are focused on that and investment to drive that profit growth. haidi: the upcoming g 20 meeting, the u.s. in particular has been vocal about currency manipulation, perhaps a vocal since the election campaign, but are you anticipating any change when it comes to the communiqué as it touches on foreign exchange? have there been any proposals floated? >> there is a strong consensus among g-20 economies that trade is what it is all about. trade and open markets and foreign investment come that is what has made this country does success it has been. for an open trading a economy like australia, it is critical that globally we continue to keep markets open, and i know that is the view of economies that have been in difficult
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straits, like the argentinian economy. they need open trading markets. bill english come the new zealand prime minister, said you selling stuffey to yourself. keeping markets open and keeping the world trading is the path to global prosperity and lifting incomes in the weather and developing economy or a successful economy like ours. haidi: i appreciate your time and coming on. that was got more's and therefore us. plenty to look forward to on bloomberg television throughout the day. julie bishop will be on bloomberg markets: middle east after midday and hong kong. singapore.s in later, an exclusive interview 7:10 a.m.w spence at in new york. coming up, looking the other way, how south korea's
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biggest conglomerates are shrugging off a scandal. on that, plus a full market check when we are seeing rising equity markets. this is bloomberg. ♪
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haidi: i am haidi lun in sydney. this is "bloomberg markets: asia" rishaad: i am rishaad salamat in hong kong. haidi: ousted korean leader park geun-hye struck a defiant tone as she moved out of the official residence in seoul. joins us now from seoul. what did she have to say? shery: a lawmaker from her party spoke on her behalf, saying she was sorry that she could not finish her presidential duties,
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but at the same time said that in due time that the truth would be revealed. that suggests she could put up a strong legal fight. prosecutors have named her as a criminal suspect, and so the question now is when will they summon an interview her now that she has lost her immunity? the protests have died and it has been a peaceful morning. this was the epicenter of all the protests in the past few months, a different scene from what we saw saturday evening when tens of thousands of people came out to celebrate the ouster of president park. her supporters gathered near her private home to receive her as she left the presidential palace and went to her own house. we have to say we are seeing some gather in large numbers, sporadic protester out the morning. dozen collegewo
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students demanding their voices be heard when the new presidential candidate comes out. not surprising given the unemployment rate for people under 30 years of age is double the rate of the whole nation. rooting out corruption, cronyism, a key task for any new government there. what changes are we likely to see or have seen already on this front? park's downfall has put the focus on two issues come reducing the powers of the president, reducing the powers of large conglomerates. on both fronts, efforts are andg put. we saw roughly 40 died months from parks scandal, including the vice-chairman of his trialay y. lee, being launched this week. we are seeing a dozen proposals pending at the national assembly . it could be seen moderating the
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behavior of large conglomerates and shareholders, including giving independence to board members and internal auditors. at the same time, reducing the powers of the presidency, we are seeing everything being talked about, including british-style parliamentary rules, france's system where you have the president dealing with foreign affairs, while the prime minister deals with domestic issues. president is expected to announce a date for the election this week. deed forthank you in that. the removal of the korean presidential adding light on those in the core doors of power. ridors of power. our bloomberg to gadfly columnist. what do they have to fear from
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parks fall? >> it is a good question. shery ahn talked about that just now. the concern really is with park , and the close relationship between the conglomerates and the presidency falling apart, then maybe they won't have that same perception of protection they have previously had. the conglomerates are very powerful in south korea. ,he top four, led by samsung 22%, 23% of the kospi. conglomeratesop are 51%, so that dominate the market. if there is a breakdown in that relationship, then there is a concerned their advantage no one
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great exist, and the could be a threat to the conglomerates. say, the dominance of these family-owned conglomerates, some of the biggest companies in the world, there are somei, upside's the way they are structured. on a limb will go out and say there is some upside to it, knowing i will get criticism for saying so, but let me explain why there can be upside. there seems to be some upside in the development of the korean economy. , ifit this way, samsung they have a central authority, they can allocate capital to various parts and decide where the growth area should be and where they should dial back. that is one strength of a conglomerate, a central authority that can allocate according to where they think the future will be rather than worrying about quarter by quarter profit. that is one advantage to a conglomerate. haidi: all right, thanks for
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that. coming up, the indian prime minister takes a big win in the country's most populous state. does that make a second term for new render modi a certainty now? this is bloomberg. ♪
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salamat inam rishaad
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hong kong. you are back with "bloomberg markets: asia". haidi: i am haidi lun in sydney. indian prime minister narendra modi has won a resounding victory that allows him to push ahead with his reform agenda. theelection commission says bjp has taken at least 216 seats and is leading in more than 90 others. the result puts prime minister modi and prime position to campaign for a second term in 2019. rishaad: bitcoin roaring back, gaining back the 18% it lost on friday after a reject bid to list exchange traded funds. currently trading around $1230. says it is toe add 2000 jobs in the u.k.. it says positions will be filled
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across the midlands and north of england, scotland, and wales. $2.4 billionorts of investment in britain, a number of positions and south africa and egypt will be reduced. one feature on the bloomberg we like to bring is tv .on to you can watch us live and have a look at previous interviews and dive into any securities or functions we talk to you about. you can become part of the conversation by messaging us as well. that is tv . it is for bloomberg subscribers. ♪
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>> it is homeless 11:00 in hong kong. i am david ingles in the middle of the trading day in asia. welcome to "bloomberg markets: asia". ♪ david: all change at the top, aia names a new ceo, mark tucker. economies, china says no hard landing, but factory activity remains weak in japan. after the fall, korea's ousted leader remains defiant has
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corporate korea shrugs its shoulders. , a lot things happening of risk events in the markets, not to mention the fed. some data points today, markets shrugging it off. more risk on as far as markets are concerned. come along come of is something that came out early. japan cpi data points is one of them. it is not getting as much attention as it should. it is the first time we are seeing producer prices in japan and china showing some inflation here. japan is top, china on the bottom tpi. 8% roughly inflation going back to 2011, 2010. japan managing to get itself out of deflation at the factory gates. deflation going back to the summer of 2015.
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when people talk about this reflation trade, it is good you have these two economies in asia right now. especially when you look within the markets themselves. that is pricing power when it comes to these big, old school industrial's in both countries, old school is a relatively loose meaning and you talk about corporate japan. right, we have the fed, the boj this week. have a look at the new normal inn it comes to the spread the 10 year death of each country. let's take you back to 2012 come the spread between the japanese 10 year and the u.s. ten-year. for the most of 2014, the spread was capped at 2%. hyder dollar, 2.5%. we bumped her head on that ceiling. ?here do we go from here what is the catalyst that will
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break us out of that? people are pointing to the dot plot, but when you look at how it bond markets are pricing, doesn't seem everyone is convinced we will get three hikes this year. isthe moment, the spread 2.49% between the japanese and 10 year yield. in the meantime, let's get it over to paul allen for first word news. paul: ousted south korean president park geun-hye remains defiant after being removed from office. she returned home on sunday after leaving the presidential palace to be greeted by hundreds of supporters. in her first public statement since the ruling, she said she was confident the truth would come out. parking is facing criminal charges for abusing presidential power for personal gain. a group of former u.s. officials plans to seek informal talks with north korea as tensions rise across the region. intelligence specialist who helped to broker a 2005 deal
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on pyongyang's nuclear program says such unofficial talks normally take place every six months. he says he plans to contact the north korean mission of the united nations to arrange a meeting. indian prime minister narendra modi has won a resounding victory and elections, allowing him to push ahead with his reform agenda. the election commission says the 216 seatsken at least and leading and 90 others. the results but prime minister modi in position to campaign for a second term in 2019. ice land is back, exiting capital controls after its banking crash. the government said from tuesday that it will lift us all the remaining restrictions, allowing citizens, corporations, and pension funds access to global markets. iceland spent eight years trying to clean up the 2008 collapse, which triggered the country's
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worst recession in more than six decades. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. david: good one. tucker as itsrk new chairman, succeeding douglas flint. rosalind chin is outside hsbc and hong kong. take us through the top lines. a fresh face at the top for hsbc. mark tucker will be the first person who has never come from inside the bank to become chairman. his role will start on october 1. one of his first jobs will be to find a replacement for the current ceo stuart gulliver. stuart gulliver is expected to step down in the coming year.
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one hsbc official said it was starting the search for its chairman. it said it would look outside the bank. this really is a smoother transition this time around than last time in 2010, where we saw a scramble. then chairman stephen green quit, and that led to the ceo also being replaced at the time. been ceo of aia for 10 years and has more than two decades of experience in asia. the current regional ceo of aia will take over as chairman. absolutely. let's talk more about this story. out, hsbc up, aia
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down. the markets are sending us a message that it is hsbc's gain and aia's loss. who exactly is mark tucker? >> mark tucker is a former pro soccer player from england, but was, but can't get away from the fact this is a man with an excellent track record running insurance companies, especially in asia, more than two decades of experience working in asia. previously started and ran prudential's asia operations and he went-2003, on to become prudential's ceo, a operation ing asia. anyone who knows the insurance operation and asia realizes this is a diverse market. anything between, depending on
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the scale of operations come up to 14 different markets, each with a different subset of parameters, demands, client requirements, so it take someone with a keen eye for detail to these marketst involved and how to expand the operations in these markets, so this is what hsbc would be looking at mark tucker to bring to the table as a tibbetts -- as a tibbetts towards asia. at hsbc'sn you look footprint across asia and emerging-market, these are different markets with differences in culture and how it operates. when we try to extrapolate what his role means for hsbc, what are the expectations here? >> it is a nonexecutive chairman, so he will report directly to the board as opposed
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to running things per se. one of his first tasks is he will have to find a replacement for stuart gulliver. that will probably be a year-long process at the very least. this is also a bank where profitability is still languishing, five straight years of declining revenues as a result of all the issues over the years, misconduct, fines, declining growth. the most recent numbers hsbc reported missed expectations on the revenue side. ofwas under 1% at the end 2016. if you consider a global average digits, high single there is a long way to go. they are looking to mark tucker to bring expense to recessive take its fortunes. david: one of the most of those
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are used phrases we use is that it is a new era. , and whot from hsbc really is mark tucker, the incoming chairman of hsbc. let's talk about the markets. juliette saly is standing by with a look. having a look at what is moving the region today. we are seeing strong gains from now that we have the political turmoil out of the way. we saw another strong gain coming through in the morning session, up over 1%, the biggest gain on the kospi since january 11, tracking at highs we have not seen since may 2015. to the downside, some weakness bathai stocks and the thai ht. it is expectation that a fed
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rate hike will play into corn investment. you have seen foreign investors extending sales of thai bonds and equities. the aussie dollar looking strong , and bonds and favor as well. we have been talking about the bps, atyield rising 2-3 the 30 year, some significant fall. bond risings, yields falling there. some stocks we have been watching in the region away from the likes of hsbc. toshiba and focus in the japanese session, up 3.6%. reports that is considering a sale of its toshiba tech slight. -- slate. new crest mining, a 4.8%.
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seoul, lg electronics up over 2%. a little bit more of a brighter session coming through from asian equities than what we saw in the morning session come a bit of upside in hong kong and china as well on the call from goldman, but a lot of weight and see it as we have the boj and the fed. a lot happening this week. juliette saly looking at the markets. one new feature we would like to bring to your attention is our interactive tv function. you can find that at tv on your bloomberg. you are not only be able to previous but interviews and dive into securities are functions, charts, have a look at what those functions are and read the commentary behind them and become part of the conversation by sending us instant messages
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during our show. this is for bloomberg subscribers only. check it out at tv . still ahead, a big win for the indian prime minister and the country's most populous state. let's try that again, getting rid of big currency. all of that later. ofore that, the threat american protectionism under trump and implications here in the region. that is next. this is bloomberg. ♪
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david: welcome back. this is "bloomberg markets: asia" i am david ingles. akata has been sued by nissan, ford, and bmw, withholding information on default the inflator's. they allege they knew about those devices. ta has pled guilty as part
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of a $1 billion settlement with u.s. regulators. reports from tokyo saying that toshiba's loss could top ¥1 ,rillion, about $8.7 billion that if the nuclear unit files for bankruptcy. to sheep itself estimates the westinghouseto sheep itself este westinghouse write-down -- tour your does labor union says the company is offering a pay rise of ¥1300 a month, a $11. that falls well short of ¥3000 requested. surveyed by bloomberg say that when you look at japan's annual spring wage talks , shinzo abe ones greater consumer spending to boost the economy.
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we have to wait for wage inflation come through in japan. the past friday marked 50 days of the trump government, plenty of headlines. as we noted, 50 days, as you noted, like 50 years. you traveled across the region. what seems to be the number one consistent trump concern among business leaders and government people you talk to? >> it is less of a concern. there is actually optimism, but optimism guarded with uncertainty of what is to come. thatis an administration made it clear it is about change, and changes in the air. whenems like 52 weeks, but you think about what the president is trying to do, he made clear and his first address
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to a joint session of congress that he has president for all of america, not the world. we talk about concerns and opportunities, can that pivot to america be good for asia and the rest of the world. be, optimistic that it can but we need to turn that rhetoric into specific policies. david: which we don't have a lot of details on or legislation yet. what is the number one discarded thing about trump? own can only speak for my view and what i hear in the region. i think people are uncertain. when a pleasant and gets elected, will he shift? someone says that when they run for office they say one thing, but when they are in office, managed it a different way. so how are we going to turn all of that rhetoric about changing america and making america
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strong again, how will we turn that into something that makes america strong, but also to the benefit of the larger world? thatpresident made clear his first focus is on the united states. david: the question is how? aswe will see personnel policy. we are seeing with the secretary of defense, having been to the thisn, the first thing president is doing is reaffirming some long-standing alliances and relationships. i am hopeful that what began as pivot to obama's asia will be built on and we see region.ss event to the that will be good for the united states and asia, a strong, confident america will be to the benefit of the region. david: at the onset, the way public perception distinguish between which countries were potentially on the losing end or receiving end of a tweet, or
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was when you favor look at trade accounts, those with a surplus to the u.s. may be on the losing end. those with the deficit might rest easy. you step back and talk to countries like japan, south korea, but when you look across asia and given that perception has changed, which country is most at risk? >> sure. i think which countries will benefit first. clearly stronger u.s.-japan relations on the horizon. we saw that before the president took office. his first meeting was with prime minister abe. we think about what has been built on so far has been a u.s.-india relationship. from president george w. bush, president obama, and now under
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president trump come the u.s.-india relationship will become stronger. trade is being driven by exports from here to there. those exports be shifted to manufacturing in the u.s.? i think time will tell. this administration is still finding its footing. i am an optimist. i think things can be better for the nine states, asia, and better for asia-u.s. relations. it is only 52, 53 days, but indeed, what a change. i think this president has made clear that the era of leading from behind is over. david: fortis does that mean, leading from behind? what does that mean, leading from behind? >> there was a concern encapsulated by that phrase leading from behind. the united states would just let things play out, just one more
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country in the world. than anyt is more other country in terms of its positive impact it can have on the region and the world. mentioned japan. that is the obvious candidate. south korea, india, vietnam is singled out as well, why? thehe president has said time of these grand multilateral trade deals is over. when i look back to what he said in that first joint session of congress, the only asian mentioned was this reference to tpp. he made clear that the era of job killing tpp is over and will be replaced by bilateral trade deals. including one that was of vietnam, and i think there will be an opportunity for stronger u.s.-vietnam engagement. around.tick we will be fleshing out other
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themes, where does china fit in, are they an ally, and north korea. chatning us for a group later on, but before that, we are talking about and massive week for central banks, markets expecting the fed to all must certainly raise rates, but what about other central bank decisions? more on that shortly. this is bloomberg. ♪
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david: welcome back. this is "bloomberg markets: asia" i am peter elstrom --david ingles. week for central banks. i guess told his that growth is the factor that unites. >> growth is moving up and inflation is moving up, not only the u.s.. japaneurope, and in a way
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, so the world is changing. it's not only the fed is that we will have four hikes. there is positive action on the growth side. might not be so positive on inflation if the fed has to move, and it has to move four times this year. , iid: taking a step back guess said market should be managing expectations when it comes to future growth and says it is time for trump to deliver on his growth policies. >> the market has been pricing all the policies that trump will implement in the states over the next 12 months. now is delivery time. the contrarian call says may be the type of economic growth you will see will not be phenomenal, and people may lose patience. onid: traders are betting
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gains in the u.s. dollar despite friday's month -- slump. a strong dollar in the is perfectly logical when it comes to a progrowth u.s. government. think in the short-term a lot of the dollar positive news is certainly price 10. we know the fed is likely to raise rates this week. they will probably also adjust their dots slightly higher, hopefully not too high, but likely to do that. we also have a much better picture out of europe then some other economies which for a reversal or a basically of the big movement we saw after the u.s. election. david: and there are plenty of other big names to look for to on bloomberg tv today. bishop joins bloomberg
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markets: middle east after midday and hong kong, 3:10 in sydney. later tonight, and inclusive interview with andrew spence just after 7:00 p.m. hong kong time. ♪ live-stream your favorite sport
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at the airport. binge dvr'd shows while painting your toes. on demand laughs during long bubble baths. tv everywhere is awesome. the all-new xfinity stream app.
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xfinity. the future of awesome. >> it is 1:29 in sydney. i am paul allen with the latest first word news. the australian treasurer says his biggest worry about the economy as low wage growth. scott morrison spoke exclusively to bloomberg short time ago. challenge we have is to ensure that what australians are earning every week is increasing. wage price flat indexes for some time now. increasing what australians earn is what i think is the big challenge now. tucker to step down
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as ceo and president of aia to become the group chairman of hsbc. the insurance executive will take up his new role on october 1, replacing douglas flint. his first tasks will be to find a successor to current -- gulliver.bler china says the economy showed improvement in the first two months of the year. bureau ofal statistics says industrial output in january and february grew more than 6%, while services expanded 8%. said there iso little risk of a hard landing. premier li keqiang set a growth target of 6.5% of the annual policy meeting. myanmar's largest the privately owned bank says they may be willing to sell a state to a foreign lender. an executive lender says any sale will be subject to potential changes in the country's banking laws to allow foreign partnerships. the government is considering letting foreign investors buying
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up to 35% of local companies. asia's underone of bank countries. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. hong kong come up 30 minutes left. let's check what's happening across markets in asia. of course we have japan coming back from its lunch break. a mixed picture coming through in the morning session, waiting for that graph to come up, but some movement , now up .25%. solid move onat friday's session, 1.2% gain, at the highest level since december 2015. have a look at the kospi, up over 1%.
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bullish callthat from goldman on chinese equities. the csi 300 up by .6%. australia underwater, as thai stocks today. i want to show you a little bit more in terms of what we have seen on the kospi. we have seen this big rally come through when we saw the constitutional court uphold the impeachment of president park on friday, the kospi rising two levels we have not seen since may 2015. today is the best gain on the korean equity markets since january 11, so a lot of movement coming through. the fundamentals show in terms of the valuation of korean stocks, there is a divergence between that and chinese stocks, but one market to continue watching. we did have a weaker effects of
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from the pboc for the yuan. reuters saying the pboc said there is no floor on the rate and fx reserves remain strong. is starting to speculate when we could see some levels, but we have seen that weaker fixed today. -- fix today. some diversions coming through, as we have been seeing from the offshore yuan. david: those two dance partners rarely jive in motion. the ousted korean leader park geun-hye has struck a defiant tone. she has moved out of her official residence, and her fall has left the country with a daunting and familiar task of rooting out corruption among business figures. have a look at this bloomberg chart. it speaks to what julia was pointing out. week, we had a lot of
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headlines and solve the biggest weekly inflow into korean stocks going back to july last year. forward, we are now at $148 million, the bar you ae their, the first three and half hours of trade, those of the inflows. 150 million net portfolio inflows into the south korean market. .hery ahn joins us from seoul take us through the defiant tone. what did she have to say? to seei'm not surprised that chart you just mentioned given that one uncertainty has been taken out of south korean politics, but yes, the defiance is there from president park. she said she would accept the ruling and the consequences of that, but at the same time, she pointed out the fact that it would take time, but the truth would come out.
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that suggests she will put up a strong legal fight. what that means for the economy is another matter, but prosecutors have already named her a criminal suspect, and so now with her immunity as a private citizen gone, it could mean more uncertainty when it comes to what happens to park geun-hye. the protests, a quiet morning and central seoul. this hasm right now, been the epicenter of these protests that have taken place in the fast -- past few months. now a very different site from what we saw on the weekend when protesters, tens of thousands of celebrate the to ouster of president park. now we are only seeing sporadic protests throughout the morning was so we still see police and lingering around and coming out in large numbers when we see
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these intermittent protesters coming out. we just saw college students the mending that the new presidential candidate hear their voices. not surprising given the unemployment rate of those under 30 years old and south korea is double the rate for they'll nation. there,on your point corruption has surfaced because of all this we have seen. what changes are we seeing on this front? parks of downfall has put two issues in focus. one, reducing the power of the presidency. the power of these large conglomerates. efforts are being taken on both fronts. roughly 40 people have been indicted close to that park scandal, and that continues to go on, including the vice-chairman of samsung, his
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trial starting last week. also, efforts on the national assembly side, about a dozen proposals to rein in the power of these large conglomerate shareholders, including giving more independence to board members and internal audits. when it comes to reducing the power of the president, there is a bipartisan committee discussing that very issue and trying to amend the constitution for the very first time. lawmakers are weighing several options, including british-style parliamentary rules, even france's system, where you have the president only dealing with foreign affairs while the prime minister deals with domestic issues. will they be able to do it? we have seen these sorts of efforts in the past with no success. we have seen nearly every president since the fathernation of park's
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in 1979 facing corruption allegations. so all will depend with the political force year, and elections have to be held before nine -- may 9. the acting president will announce a date this week. david: solid reporting there. live for us in seoul. minister narendra modi has won an outstanding victory in the state election there. him push ahead with his reform agenda and puts them positioncondition -- to run for a second term in 2019. a looks like modi is in strong position now to campaign for a second term. haslinda: modi tightened his grip on power that overwhelming victory. it is the most important state election. modi has been key and his
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party's campaign key to election strategy and has won over people on the promise to bring back growth coming get rid of construction -- corruption. this chart shows how modi and his coalition partners have one in the most populous state, overshadowing its arrival. they have rolled out measures like de-monetization, banning large notes here it for a state like this that is a very poor, the promise of growth and jobs really resonates. his latest victory is an endorsement for what he has done as prime minister. i guess despite the wind that it will not be easy. it is a challenging road ahead. i guess that is an understatement. haslinda: it will be challenging. it is the upper house he has to look out for, federal land,
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labor reforms, difficult to push through. some say forget about it. they will be impossible to push through. what he would do is push through structural economic changes, nonperforming loans revised, so all of that would hopefully boost foreign investment. #6701.look at this chart it shows how foreign investment has been rising since modi took power. the stage is set for modi's reforms over the next two years. david: live for us in singapore. and live in india. market,come of the cash the rupee, have a look at the trading. emphatic wing that by prime minister modi. it indicates the prime minister is not blamed for the chaos
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following his ban on high denomination bills. david, all things equal, this is good for the rupee? >> certainly in the short-term. the one-month non-deliverable fords are open and gaining versus the dollar. markets are happy with the result, a quite convincing result, so going forward, the markets are expecting reforms to be pushed through. they were not happen overnight, but looking forward to expecting more, and if that spurns growth come that is good for the rupee short-term. the fed is the other side in terms of the dollar-rupee. it will be a tug-of-war between the two. david: just to really have a look under the hood, when you
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look at these currency pairs in asia, it is the fed or expectations they will move this week underpinning these moves up in terms of the crosses. how big is a factor the fed? >> it is a factor. stabilityhas had some of the last couple of years. during the taper tantrum it went from 54 to 68 at couple of months. because current accounts have stabilize, it is not as expose, and definitely positive. but like every other currency, as dollar edges of hire, that weighs on any currency. absolutely, i'm looking at the 10 year in india, six point 9%, 2.5% for the u.s. dollar.
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with the prospect of rising u.s. yields and rate differentials that we have to consider fair value, how will it perform against peers? come a question, short-term, it is one of the stronger ones. this month alone, you're seeing u.s. yields move up considerably come two-year or 10 year, and yet the rupee is one of the strongest performing against the dollar this month, so it does bode well moving forward. one of the reasons you have areded to, 10 year yields high relative to their peers. if the currency is stable, it is an attractive investment. david: right, live out of singapore. up, the trump government said to be softening his rhetoric over china as a currency masseuse. why the change of heart? we will talk about that next. this is bloomberg. ♪
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david: this is "bloomberg markets: asia" . am david ingles the return ofck, the 18% loss on friday when an application for an etf was rejected. atcoin is currently trading $1230. he madeng comments about white men in board rooms being "an endangered species" has prompted critics to call on the tesco chairman. he said the remarks were meant to be funny. add more than 2000 jobs in the u.k..
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the company says the positions will be filled over the next two years in scotland and wales. it will support $2.4 billion in investment in britain. right, welcome back. we have to talk about china. all this fits into the new trump government. how would you characterize the relationship? is china an ally? >> china is not now live. buildingompetitor, but the relationship is the benefits of both countries. what a contrast. in the last two weeks, the first address by president chump to a joint session of congress, the big arrest in china to a different congress. a tale of two congresses, china
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about stability, 6.5% growth. united states is not about stability, about change is coming. with one country focused on change and the other focus on stability, let's hope there is a way forward. >> both full of very rich delegates. >> that is the way of the world. >> are the representatives on the chinese side richer than the ones in congress. what is fascinating is not just these two countries. theatter how wealthy leaders are, it is now the era of the people, up hapless -- a populist revolution around the world. >> you probably can't get a populist government the way that dutch politics work. he will be a coalition at the
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end of the day, but the french one is the one to look at. >> when i look at all the projections, it seems like everyone has been wrong. we have an important election here. we will see how that plays out. will beijing dictate what happens here? --chemchina be more powered outward and step into this vacuum. pressurings to be him to that, to step up to the late -- plate. thate world is hopeful people's rhetoric turns into reality, but for me what a contrast it was in terms of what davos and said in the reality around the world today. itsnless china backs up rhetoric with reality on the ground, it will be more blog bla, bla.
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>> the reality on the ground is the rhetoric from the u.s.. when you look at china, the currencies are depreciating. it is no longer the world's manufacture of goods. there is a difference between which are hearing from the government and the reality. look at the numbers. china is still the key player in manufacturing. there are troubles throughout southeast asia. in southeast asia, they are benefiting by rising wages, myanmar, vietnam. the dynamic is changing around the region between the united states and asia. once somebody called me relentlessly optimistic. that's i feel about the u.s., asia, and southeast asia.
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there is so much talk about china and india. given what happened today in india, the world needs to pay attention to southeast asia. you think about business opportunities and the southeast asia pacific. a wildcard is north korea for china now? the u.s. and japan and south korea, how do you see that playing out? have the right word, wildcard. who could have predicted what happened in that kuala lumpur airport. north korea will try to get attention. you saw it again earlier this week with more missiles flying out. luckily we are seeing a measured response from all the players. my gut is that china can't control north korea, but can bring pressure on north korea. we are starting to see some of that in terms of exports and
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what they're trying to do with her economic relationship with north korea. >> thank you for joining us. up, recordng household debt and a runaway property market. -- 20 on the plate. we will hear from him next. this is bloomberg. ♪
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david: this is "bloomberg markets: asia" i am david ingles. speaking exclusively to bloomberg, scott morrison said he has spoken to regulators about the level of austria's household debt. regulators are always looking to ensure that there remains the appropriate attention. those meetings we had were important and an opportunity to be agreed to buy them about how they are seeing the situation.
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they are taking a close watch on it, but the macro measures put had ace, they have positive effect on managing this issue, that the household that position over all is predominantly around mortgage debt, 80%, and our prices may be high, but they are real. the issue of having a affordable housing prices in australia is the mismatch between supply and demand, not the function of an investor credit bubble. they are real prices, real values, and what we are working to do is to put downward pressure on rising prices by addressing supply challenges and working with governments to achieve that. rishaad: what worries you most about the austrian government -- economy right now? >> the biggest challenge we have is to ensure that what all strains are earning each week is increasing. wageve had flat price
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indexes for some time now, increasing what australians earned is the big challenge now. that will obviously flow-through into government revenue, improved household consumption, and this is the real challenge for us. posted the mining investment boom, we had a 30% fall in terms of our trade and a significant drop in investment in the mining sector, which was driving incomes. the last quarter and december, we saw an improvement in prices that supported those sectors, but the wager earnings of australians have been flat. it has been a while since they have had a good pay rise. that's what we need to work towards achieving, that they earn more, but you would not earn more if the business is not earning a profit, so the profitability of businesses is critical to australians earning
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more, and that is why we are focused on that and investment to drive that profit growth. david: that was the austrian treasurer scott morrison. coming up, bloomberg markets: middle east. tracy alloway standing by in dubai. what do we have in store for everyone today? upcy, the big thing coming has to be the dutch elections, right? now we have a war of words erupting with turkey. big that sway hollands moment. we will discuss that. we will discuss emerging-market debt. we have the fed rate rise coming up, oil prices starting to slip. is that bad news for emerging markets investors? -- ill speak to david: looking forward to that. but before that, a quick check of the markets across the
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region. a very decent session, 200 points up. have a look across the japan and south korea. more next.
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>> it is a big week for central banks with policy decisions from the fed, boj, and bank of england. we will ask if markets are ready. >> sliding towards $50 as it affects production cuts. >> meanwhile, turkey turns up the rhetoric in its war of words with the netherlands. erdogan says the dutch are behaving like a banana republic. >> it is all change at the very top. the

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