tv Bloomberg Markets Asia Bloomberg April 17, 2017 9:00pm-10:01pm EDT
haidi: at 9 a.m. in hong kong, 11 p.m. -- 11 a.m. in sydney. rishaad: i'm rishaad salamat from bloomberg asia headquarters in hong kong. this is "bloomberg markets: asia." ♪ haidi: trade talks and tensions. mike pence goes to japan on part two of his trip to asia. rishaad: regional stocks extending gains. new york has the biggest gains in six weeks. haidi: fidelity and guarantee
approach.it was seen as unlikely to win regulatory approval. rishaad: the u.s. could default in the markets and not paying attention. the u.s. vice president is heading to japan. meeting with the deputy prime minister later on the agenda. north korea and nuclear ambitions. geopolitical tensions are roiling markets of late. we have a lot of pressure on beijing from washington at the moment. some of it is apparently working. the u.s. is getting encouraging signs that china is going to act to pressure kim jong-un's regime to dismantle their nuclear weapons program, and that we have mike pence also warning pyongyang that they should not
really dispute the resolve of his boss. politics is the alpha today in equity trading. data as well. haidi: that's right. i find it a little be will during we are seeing this section in the u.s. overnight, blend clearly geopolitics is still the great big unknown. data, continuing to paint a picture of what the chinese recovery looks like. prices coming out in just a little while. it is expected to show further robustness when it comes to the properties.hinese curbsalyst says that the put in place have removed
uncertainty from the markets. 30 minutes away from the open in china and hong kong. getting back from the long weekend, singapore, taiwan, and malaysia coming on. a bit of a fractious market so far.let's go over to sophie. reporter: a mixed picture as we see geopolitical tension eased somewhat, although there are still concerns around north korea. taking a look at what's going on in the equity states, we have singapore, taiwan, and malaysia joining the fray on the upside. takea look at what's going on in sydney stocks. slumping about 8/10 of a percent. also there's but health care in the plunge. -- all sectors but health care in the plunge. asx 200 near a two-year high. shares until guilt up about 6/10 in tokyo up -- about 6/10 of a percent.
korean won leading gains in asia technical indicate the. may already be in place. this is the coffee. we have samsung and -- leading, stockste -- lotte sliding. we are seeing cooling-off when it comes to australian notes. editors anticipate this dread -- spread between u.s. and ozzie will dissipate later this year. the slump in iron or is likely to see a derived -- drive and demand in aussie bonds. mentioned, we are keeping
an eye out on chinese property prices at the bottom of the hour. despite tougher measures to cool the real estate market, these are hot properties for investors. gains of more than 70% against the msci target. they are vastly outperforming the gauge. is robust outlook for sales added to the stocks. analysts are fighting caution for the sector, predicting revenue growth will grow in the second quarter. rishaad: it is all about in treat cronyism, corruption, bribery, you name it. let's find out what's going on in korea. former korean president has been formally
charged with bribery and abuse of power. she is also accused of coercion and leaking state secrets in the widening corruption investigation into links between the presidency and big business. lotte group chairman has been charged with funneling more than $6 million to park and her friend. to succeed park is promising extremis eight to kickstart the korean economy. dax -- the number is in line with expectations. it also follows bank of korean governor, to assess fiscal spending is not accommodative enough. ersogan hasident attacked europe saying sunday's referendum was beyond compare. the osce has said the referendum took face on an unfair playing
field. his political supporters say turkey will return to normal. >> now that stability has improved, the debate of the government system has been settled, we are back to more monday and agenda, and that would include structural reforms. netflix gained after hours despite first quarter user growth of under 5 million, falling short of estimates. while those numbers were hurt by the lack of a big draw in show, profits more than quadrupled. they want a range of new shows in the second quarter may reverse that, the ceo reed hastings says the sleep is a thaner private -- rival and the amazon. i rosalind chin. this is bloomberg. rishaad: looking at fidelity,
they terminated a $1.6 billion agreement to be bought out by china angbang insurance group. why did this all fall apart? >> this is the end of a two-year process. bang sought approval in 2012. fromfailed to get approval u.s. states that specifically required disclosures as to anbang's ownership and the source of its money. they weren't able to provide that. rishaad: there's always been that of opacity. had previous deals falling apart. reporter: this is not the first time it has happened. they spectacularly walked out of
a transaction to buy starwood hotels. rishaad: that was the biggest one by far. anbang it was the big one. they bought -- reporter: it was the big one. they have acquired other hotels. but when it came to acquisitions of property transactions, they have fallen short. haidi: as you say, anbang has become known as this exuberantly acquisitive country -- company from the mainland. where did they go from here? i think it makes any potential seller very wary of them. their history now is littered with these failures. any seller is going to ask for really strict safeguards if they want to do more deals. that will mean really high break fees, it will mean showing they actually have the money already and people are going to
be quite strict with them from now on. haidi: and in terms of what options fidelity has, the company already says there is other interest. reporter: yeah. they areeported before exploring options with this company. the deal has been on the rocks for quite a long time now. they had their chance to get prepared for that. this is their moment. haidi: we will be watching this story. thank you so much for that. cooling measures have any effect on china's home prices. also, the lion city is set to get its third derivatives exchange. what is driving singapore's move. ♪
rishaad: i'm rishaad salamat in hong kong. haidi: i'm haidi lun in sydney. a quick check of the latest business headlines. united airlines ceo oscar munoz is assuring wall street that stormill rebound from the that followed the forcible rejection of a passenger -- ejection of a passenger. a says the issue will be watershed moment for united and they are determined to put customers first. their first quarter financial performance beat expectations. rishaad: staying with airlines, the prospects of aviation in india. --y are starting an airline they say starting an airline would be a misadventure.
singapore airlines and asia have bought stakes in the carrier. haidi: former consultants to airbus are suing the playmaker after some were dropped after what it called misstatements and omissions in applications for export credit financing. in the and you will report, they say the review of business relationships and legal matters may have a material impact on the future financial statement. and says it is too early to determine the extent of any liability. singapore may be set to get a third derivatives exchange, this time backed by china. let's get more on china's push to become a global financial market. william berkshire is a former president of the hong kong mercantile exchange. thank you for coming in. why would china be interested in doing this? does singapore really need a third derivatives exchange? link those two together.
chinarmer chief of the national futures exchange behind this. >> i think what they are trying provide another platform which would link the onshore and offshore flows ,roviding china related product with a commodities focus, in particular giving the involvement of chaos. rishaad: and of course, the commodities china sucks in all the time. >> absolutely. this is a china related benchmarks, and it's about china gaining more pricing power over the markets, which is important. rishaad: of course. not easy, is it, to set these exchanges up.
people have tried and failed. this fromknow personal experience. and 99% of futures contracts never wash out. many failures. the most successful exchange globally has even struggled to roll out its model lived any substantial success. will be for the new exchange to ensure the products are very different. that thertantly, mainland authorities are behind it. rishaad: liquidities are not going to be there, i'm assuming. >> that is absolutely vital. even though it is offshore in would not the chinese be participating unless mainland authorities are happy with the products. haidi: what is your assessment
on the pace of china's opening up and liberalization of the financial markets? we know it is sometimes one step forward and a couple steps back, or sideways. there are a number of reasons that msci rejected them three times. do you think they are making progress, or it is slow going? >> it is pretty much a couple steps back after the 2015 market correction. in particular, we saw fairly dramatic reduction in activity on the china financial futures exchange, where the view was from the authorities at that time that they were very much playing a key role in driving market volatility. however, i'm optimistic that we have more currency stability in markets.
if i may draw attention to one of them. two weeks ago, we saw the launch whichmodity options, markets have been waiting for for a decade. is a test ground for the big one in derivatives space. i'm pretty positive. haidi: it's a bit like whack-a-mole when it comes to stopping the asset bubbles in china, because the money just flows from the stock market to commodities. we saw this really spectacular run ups when it comes to commodities trading. it is still -- is it still largely driven by retail, or is the influence starting to come up? the institutional influence is increasing, but the trading activity at the moment is concentrated in the hands of the retail investors. one of the problems with china is the lack of products. in the exchange stays, i see a
significant expansion of product offerings. given the capital restrictions, i see more global related products being lifted within china. that is a major innovation. i think after 2015 market correction,, people are becoming more a well -- aware of the projection. it's a long road, but it is happening. onhaad: i want you to put your hat as the former head of strategy at the london stock exchange. it looks like the deutsche bus deal is in the water. where does that leave them? >> it was seen by many as a scaling up exercise. business is still
strong, particularly index business, and they are looking more toward china. looking at more than an alliance? >> generally the exchanges are looking at going things alone. they will have some alliances. that is probably their strategy. obviously, anything would need it will be inbut strategically. from a broader trade perspective, a link between china and the u.k. would be extremely good news. rishaad: series. thank you for coming. william barkshire. coming up, and loss from last year -- a net loss for last year. we take a look at that on the way. this is bloomberg ♪.
rishaad: you are back with "bloomberg markets: asia." 9:22 in hong kong. haidi: 11:22 here in sydney. let's get back to live our top stories. geopolitics, of course. regional tensions with north korea and improving trade relationships on the top of the agenda when mike present -- mike pence arrives. our asian reporter is on this. what are we looking to get? what are we expecting? certainly north korea will be the top subject one mike pence meets shinzo abe for lunch later today. i don't know what the results are going to be, but i think it will be talking about being on the same page on north korea. we have had news there is an
aircraft carrier coming into the region and that japan will be conducting exercises with the aircraft carrier. , let's workmuch together. there is growing tension about north korea and japan at the moment. lawmakers suggested depend -- japan obtain its own strike capability. it is gaining slightly more public support this time around. rishaad: one person being left out is -- he has been described as hibernation -- punishes by some circles. i'm talking wilbur ross. reporter: unexpectedly he's turning up on the same day. mike pence will be holding bilateral economic talks with his counterpart, the deputy prime minister. wilbur ross has been speaking
about problems that american g inucts are facin overseas markets, saying he will do more to agricole -- for agriculture and industries to export. he will do his part. that is where the class could come that japan has tried to avoid so far. rishaad: thank you very much for that. looking at the start of the trading day in shanghai, and the start of the week in hong kong after a public holiday, moving slightly up. , little moreures conviction. not very much. but we do have at the moment, the way down in the auction period.
sport-utility vehicle under the link brand in china. the biggest loser is china mengdu. there we go. indo gases is expected to resume trading in the tuesday session. this is china's biggest maker of industrial gases. it has been and broiled in a boardroom battle over management control that started earlier this year. last month, it looked for more time to complete the audit of its 2016 earnings. it also warned of impairments and other adjustments that could affect the cap. following to a net loss from a profit of 535 million yuan the year before.
rishaad: that is the scene after 9:29 a.m. counting down to the start of the trading day in hong kong. fromrishaad salamat coming bloomberg's asia headquarters. haidi: and i'm haidi lun in sydney. we are looking at property to take a look at whether the picture of stabilization sticks with the resilience we have seen in real estate. quite interestingly, one analyst we will talk to later saying property has become an
alternative currency when it comes to the chinese markets. andlso have the yuan 6.8849. a little weaker compared to the previous setting. we will take a look at that when the markets get underway. also, we are awaiting the rba. rishaad: just to tell you about these shanghai existing prices. rising 27% in beijing. shenzhen as well. a drop there for new home prices . year on year, up a whopping 20%. shanghai new home prices falling 1%. this is month on month. on year on year numbers, there is a nearly 20% gain for shanghai. nine -- 9.2%ing year on year.
prices up -- new home prices up 26% on year. we are seeing some files, but the overall look, new home prices rising 62 versus 56 in february. what we do have is a slight moved to the upside in terms of the housing boom in place, after some signs of stability or realism. that's what we've got at the moment. i believe you have breaking news. haidi: we do have these april minutes from the rba. debt and property market making an appearance. paul: very much so. it wasn't a month of surprises. we have the release of the minutes and forcing what the
statement said. ,e see housing market drops careful monitoring, the rba saying property market and household debt risks have been rising as well. expecting a few lines on unemployment. so far just a careful monitoring of jobs growth. it was interesting that the reserve bank of australia released the financial stability review. just a third of borrowers had either no buffer on their mortgages or less than one month buffer. this reverses the position of the previous governor, who saw the risks of eating -- abating. some banks potentially suffering mortgage losses as well. this is what we are seeing with the concern of household debt and the underemployment weighing
on the mind of the rba. haidi: we've been talking about comes torgence when it wage growth being at lows and household that at record highs. you expect that to end in a pretty ugly way. this line coming through that the labor market has been weaker than expected, despite the blowout edition of -- addition of full-time jobs. paul: there's always issues with unemployment figures. we had someone earlier today saying that you have to look at the broad trend with unemployment numbers. the full-time jobs figures last month are quite encouraging, but one of the trends we have been seeing is the trend towards part-time employment. there are concerns about underemployment and weak wages growth as well. that is weighing on the concern about how so that's. -- household debts. haidi: let's take a look at how
the markets reacted, and a look at hong kong and shanghai coming online. bit of a-- a writ -- a reaction for the aussie dollar. reporter: we did see an uptick in the aussie coming off of the session, low of 25.65. as the rba news lines dropped, we are seeing it tracks closer to the session low once more just fluctuating somewhat,. still not gaining any momentum to take it clearly to the 76 level. not much reaction, given the latest update from the rba and china. the aussie climbed more than 5% this year and has been one of the best g10 performing currencies. taking a look at the equities space, aussie stocks sliding almost 1%, definitely the biggest drop since march.
still near a two-year high. take a look at what is going on on the honda thing -- hang seng. tingde gases -- yingde gases closing at six hong kong dollars. resuming trade this tuesday. we have stocks in shanghai falling for a third day, while shares in shenzhen are down. shanghai,,ok at the the wind out of the sails when it comes to property and construction. we did see a rally being fueled economicfor a new zone, but lots of details could see the rally unravel. take a look at what's going on here. shanghai, had the
no seeing enough to lower in investors. suffering the biggest two-day the todayng it below average. tensions on the korean peninsula are weighing on chinese stocks. rishaad: let's get to the first word news headlines. rosalind: fidelity and guaranty life terminated a $1.6 billion deal to be purchased by china anbang insurance. they have struggled to win regulatory approval, and valuations rose during that time. fdl says they will weigh other deals. wells fargo ceo and chairman more than $5 million in the bank's stock to reinvest
confidence. the ceo bought about $2 million worth on monday, and the chairman about $3 million. this is after the fake accounts scandal. payingjudge has ordered fines after latin america's biggest construction company admitted bribing officials around the world to win business. almost $2.4 billion will be paid to brazil, and $93 million to the u.s.. although they had accepted a $4.5 billion penalty, it couldn't afford that much. carson block has told bloomberg is a chance the u.s. will debts, andthat's -- no one is paying attention. said he doesn't expect the
worst, but the markets should make plans just in case. >> if we got down to the wire, if there were defaults, what is worrying me is that there's no real mental preparation in the market for this. it might come as a complete surprise. that is one year chance for some sort of dislocation that results is greatest, if we are not expecting this, if we are not considering this is a real possibility. rosalind: global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm rosalind chin. this is bloomberg. former: south korea's president is being charged with bribery and abuse, setting the stage for a trial that could finish in a long as an term. -- prison term. country's biggest conglomerate has also been cited in the corruption probe. editor. to our
it just keeps coming. reporter: this is the first time we've seen park indicted. she was kicked out of office. prosecutors arrested her. of we got the formal charges bribery. she's facing 18 counts. the trial is expected to start next month. it has been a pretty swift process up until now getting her to this stage. and we've got the beginning of the presidential election campaigning this week as well. is there a sense that korea really needs to move past this to get closer and start afresh -- closure and start afresh? reporter: this is definitely playing out in the campaigns, although north korea has obviously become the number one issue in recent days. but reform of these big family-run conglomerates is a really big deal in the election. there are a couple proposals in
parliament right now. stringent than others, but nearly all parties agree something needs to be done to stop these relationships between politicians and big business. haidi: how much wider can the net get, in terms of sneering these high profile business leaders, and how painful is that reform going to be for the south korean economy that relies on these families and their businesses? reporter: we have seen a pretty extensive investigation already. so far, indictment is on the tail end of others because she had immunity while she was president. it is unclear we will get much wider going forward. the question of how it affects the economy depends on which laws they implement wants the new president takes place. this cronyism, bribery, i think we are
trying to get a sense of this.the point is , is there any precedent for this? reporter: it happens quite a bit. it goes in cycles. there have been allegations of this pay for play before in korea. the question is, can they stop the vicious cycle that keeps occurring? beingrted with leaders thrown into this before, they are released, and the party goes on. the question is, can they put an end to this finally? we are seeing mixed signals. there are a lot of people who don't want to take hard measures because they fear foreign hedge fund managers might come in. what we've seen is overall that it deteriorates shareholder value, and that korean discount on shares that's one of the biggest is. -- that's one of the biggest
rishaad: this is "bloomberg markets: asia." i'm rishaad salamat in hong kong. haidi: i'm haidi lun in sydney. a quick check of the latest business headlines. hollywood's creative arts agency is launching a joint venture in china. u.s.s the agent to many industry big names. caa china will be a partnership .ith cmc capital partners the terms of the deal have not been disclosed. behaad: toshiba is said to planning a written response to western digital objections to
the sale of its chip business. western digital says any sale could violate their joint venture. they say the board should negotiate first. toshiba wanted to sell its chip business to help because of losses from the westinghouse nuclear business. haidi: tokyo is redrawing the skyline as a surge of new buildings from the early years of abenomics need completion. the city is expecting as many as 45 new skyscrapers by the 2020 olympics. says 75% of firm new construction in tokyo over the next couple years will be in central districts. they say auto rates are fueling the business activity. rishaad: getting back to one of the top stories, china march new home prices rose in the month on month basis. level, it isn year
68 versus 67. let's get first active -- perspective. what was your take on these numbers? it seems as if we are coming back again to gain stability. >> it is something we expected. it has been under a supply situation for more than 24 months. that means china has been they soldss land than properties. with that undersupply and the prices --the economy, a lot of these companies have a lot of land in their banks. it shouldn't really make such a difference. quitet is misunderstanding. a lot of the land that seems to big big amount of land are
tracks that take 10 or 12 years to develop. within a given year, they don't produce a lot. the market or the government will have to keep selling. because they haven't done a lot of that, that is what is fueling price increases in the property market. rishaad: of course, it is about er cities as well. it makes it difficult to control prices. people don't get too constrained by the markets. there is an increase in the number of people with wealth. but if you look at the tier two and tier three cities, most of the markets are quite affordable . i want to bring up the
chart. you say there's further room to run when it comes to developers stocks. chinese properties stocks, china real estate owners and developers valuations. we are coming off distressed levels close to record lows. how much further do you see that running. we have seen a lot of stocks up 30% or 40%, especially the big ones, because they are still at the second half 2015 levels, isch means 2016 growth is why we see a lot of upside in the big property names. there are two things that fascinated me. you say the curbs put in place removed uncertainty from the in effect it is encouraging investors to give them confidence to move in.
on the other hand, you have residential properties as a type of currency. can you explain that a little bit? >> if you look at the china properties, it is very different from three or four years ago, and that the price growth divergence is a lot sharper between the top 50 cities and the rest. that means that people are actually buying properties in the right places, which means places that have actually invested a lot in the infrastructure. if you look at different areas, no naturalhave lines, but by 2016 to have five. that expanded the economic capacity of the cities. when they also have this land undersupply in the past two years, people think about it.
the supply of properties will not catch up as quickly. storing actually wealth. that's why we think it is becoming an alternative currency for china. compare,how does this how does the residential property market compare with the commercial one? is ae residential market lot more attractive compared to the commercial ones, because the commercial ones, you've got to much supply currently, especially on the office side. a lot of offices bundled into residential and other use land to be sold a few years ago.
the china high and retail sales have been picking up quite sharply. we think that is a combining fact of weaker renminbi and tight end customs controlled by china which reduces leakage of the middle income families spending, which means going forward -- rishaad: the retail are commercial, which is more attractive? >> residential. number two is retail. do you expect further curbs to be put in place when it comes to the biggest cities? .> they have to be you can't really increase supply so quickly. the only thing government could do actually is to contain them. expect further curbs. this will only delay price
rishaad: you are back with "bloomberg markets: asia." i'm rishaad salamat in hong kong. sydney.'m haidi lun in netflix reported slower user growth than forecast in the first quarter, blaming it on a lack of blockbuster new shows to generate sign-ups. there is a flip side. profit was up. the situation could reverse over
the next few months. caroline: the first quarter for netflix brought up next bag. on the one side it was the most often double quarter ever. international side of the business actually bringing in money.on the other side , can subscribe or growth did not -- subscriber growth did not grow to analysts had been hoping. looking to the second quarter, there is room for optimism. subscriber growth is likely to pick up steam once again, because of a heavy workload when we look at the new programming coming. a new series of "house of cards, " and "orange is the new black." we are looking at a thesis that is the same for netflix. if you are investing because you that's ok.owth,
if you're are wondering about the splashing of the cash, $1 billion will be spent on marketing in 2017. add that to $6 billion netflix on in termss cash of producing content itself. there is still some opportunity for shares to gain. 26 buys fore netflix and just three cells -- sells. caroline hyde, san francisco, bloomberg. rishaad: let's get to trading at the moment. hong kong's first trading day of the week after the easter holiday. hang seng, after what was a fairly muted start, looking like up slightly. down a 10th of 1% now. joined by the shanghai composite also. u.s. stocks providing impetus ever -- after having gained the
♪ announcer: from our studios in new york city, this is "charlie rose." charlie: siddhartha mukherjee is here. he is an assistant professor of medicine at columbia and a cancer physician and researcher. he is also a very good writer, a pulitzer prize-winning author. his latest book comes out in paperback this month. he writes about the future of automated medicine in a new piece for "new yorker" magazine. it is called "the algorithm will see you now." i'm pleased to have him back at this table. welcome. siddhartha: thank you. charlie: with some sense of paternity, tell me how this piece came about. siddhartha: