tv Bloomberg Daybreak Asia Bloomberg September 13, 2017 7:00pm-9:00pm EDT
♪ betty: i know go, president chinese-backeda semiconductor, saying opposed a security risk. >> social media a red-hot focus of mueller's investigation. , i had ofixed start key data out of china. oil making gains on increased demands. global disruptor, bloomberg gets unprecedented access to the leaders of the alibaba empire.
fascinating conversation and content out of those interviews. can't wait to see them all. i amme to "daybreak asia," haidi lun here in sydney. betty: i am betty lou at the global headquarters in new york. before we get to the great therviews, a recap of markets. we sell the dollar gain, oil markets higher, oil touching above the $50 a barrel level. that led to stocks rising. let's pull up the board to show where markets closed. the dow added on 40 points. s&p gaining. the nasdaq higher, as well. we continued to digest lots of news in the u.s. we will be watching economic numbers that are key for the market. haidi: we spent so many days talking about the weather, north korea, geopolitical risks. we are now focusing back on monetary policies and the macro
environment. check out how we are setting up ahead of the data. new zealand, trading sideways, up 1/10 of 1%. the kiwi dollar at .7252. the dollar rising for a third day, expectations that may be a fed rate hike in december, pushing to almost 40%. we are taking a look at the opened in sydney and tokyo. sydney, a flat open. but watch for the energy sector, the job numbers added fewer jobs in august, 20,000. almost 28,000 we saw in july. watch for the pace of wage growth as well as participation. that momentum seems to be weakening. japanese futures trading in chicago, up 1/10 of 1%. 0.5%.kkei 225 gaining 110dollar-yen at the
level. investment expected to be softer. industrial output and retail sales consumption numbers out of china expected to continue building the picture of resilient growth. let's get back to us top story in china. president trump has blocked the china-backed chipmaker. this is a company based in portland, oregon with stocks over national security concerns. is not a company that came on 12 radar until there was a precedent-setting decision. >> the trump administration was building on years of u.s. opposition to sales of u.s. chipmakers to prevent china from trying to buy its way into giving -- into u.s. technology.
it is also a signal but administration will continue its hard-line stance in terms of standing up to china on economic issues, even as it seeks help for north korea from the chinese government. is one ofith lattice several before the committee of foreign investment in the u.s., which reviews such deals. it is different. what they make our logic chips that have communication, industrial and military applications. gets more thane 70% of its revenue out of asia, the u.s. said it was a national and maintaining the integrity of the u.s. semiconductor supply chain. ,t is fairly unusual, lattice typically companies will walk away from a deal when the
committee that reviews them will recommend rejection. timesey went back three before taking the usual step of appealing directly to trump. is a very said this specific set of circumstances in terms of what is been determined as to give rise to a national security risk. e of about the long queu other deals, like moneygram? it is one of: several before them, a takeover by a financial company, controlled by jack ma. there is also the deal that would have hna buying a major stake in skybridge capital, a management company founded by anthony scaramucci, who was at one point the white house can indication's director. there was thought at the time that deal might come under scrutiny and might be difficult for scaramucci.
but that is now moot. whether or not those deals will raise the same concerns i think remains to be seen. this entire process is opaque. they meet in secret, recommendations are not public, and it goes directly to the president. a lot of that is to protect the financial interests involved. betty: i am zynga headline about bridge,and canyon reporting the cancellation of their merger after not getting that approval from the trump administration. out this press release, saying they are terminating their pact. chief financial officer from ant financial where we will get their take on the potential for any deals passing the u.s.. let me switch gear's talk about
this other story here on robert mueller and his investigation, which is now red-hot. those are the words, red-hot, on social media. how does that relate to the trump administration and trump ties to russia? joe: this has been somewhat of a side channel in the investigation both for mueller and congressional committees looking into this. it came to the forefront after facebook earlier this month reported they discovered something like $100,000 worth of ads bought through a russian interest. up, theyhis is shaping are both looking at it from a long-term view -- how do we prevent this in future elections? congressional committees and probably mueller's team are looking to see if there is indication someone from trump's social media team or campaign management organization in some
way might have directed these russian interests to target voters in specific areas or specific groups of voters. several of the states that put trump over the top were won by very narrow margins. any change could have an effect on the election. betty: it is fascinating, it has huge reverberations on the hill. i know the midterms are far away. how will that affect campaigns and elections going forward and disclosure information from here on out? the u.s. intelligence agency said one of the aims of the russian operation was to disrupt u.s. politics and cast doubt on the u.s. election process. it is going to be very difficult going forward, as voters and candidates try to sort out
stories, information, and try to break through the noise. it is unclear how they will be able to do that. i think one of the things that will be part of the congressional investigation, looking at ways the company such as facebook and twitter, either monitor or close off of their feeds to prevent fake news stories from getting attention. betty: a really fascinating story. joe sobczyk, senior editor in washington. let's get back on the markets. we are taking a closer look at record closes for the dow and s&p. energy shares helping lead the way higher. those higher oil prices helping that sector. su keenan has more. into the close. the s&p 500, and dow had a record close. it has now had its biggest decade gain, between 2009 and now. eclipsed others.
let's going to the movers. the drillers, including chesapeake and pioneer natural jumped post-storm as oil and gas prices improve. that refinery pipeline is back in action. as arrival has a vacuum. trans union had the man call centers because of concern. x continues-- equifa to be in the center of the storm. they had a data breach and a couple dozen senators looking for an investigation into whether they sold their stock. x. had a chart of equifa let's going to the bloomberg, g #btv 6989.
the trump trades are almost over. what you saw here after the election was international companies rallying all the way down here. companies, a tax lot of investors have abandoned the trade. if we look at what is going on ofh oil, we have convolution factors, the opec possible extension of the cut, the iea with a strong demand forecast for it u.s. and europe. we have refineries back online, drawing on u.s. demand for oil. of theo into some elements that are affecting the market, let's going to the bloomberg, g #btv 301. there has been a lackluster hedge fund, because oil continues to be in a tighter
range even though it is bouncing up. haidi: let's see if those gains can hold. let's get you up to date with first word news. up, a u.s. judge has revoked the bail of former pharmaceutical executive martin shkreli, ordering him jailed immediately over a bizarre facebook host. he said he poses a danger to the community, after his post offering a bounty for a strand of hillary clinton's hair. on threenvicted charges, including three counts of securities fraud. bloomberg has been told china is considering tougher punishment for companies that violate rules governing the approval of mergers and acquisitions. penalties increase up to 10% of a company's annual sales in the fiscal year. it is among revisions considered for the nation's anti-monopoly law, but is still subject to change.
toshiba signed a memorandum of understanding with bain capital on the sale of its chip the business. the nonbinding agreement signals a deal by the end of september. it does not prevent toshiba negotiating with other bidders, including foxconn. ashiba needs the sale to plug $1 million hole in their balance sheet, caused by lawsuit at their u.s. nuclear unit, westinghouse. oil hit five-week highs after the iea said global demand would climb this year by the most since 2015 on stronger consumption in both europe and the u.s. increase to the estimate for demand growth by 100,000 barrels a day to 1.6 million. it suggests producers are having success in reducing bloated inventories. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. betty: courtney, thank you so
much. we're live at the milken summit in singapore. the next hour of "daybreak asia ," michael milken joining the conversation at 9:10 sydney time, just after this commercial break. this is bloomberg. ♪ -- cioi: we will speak with a at 11:10. 9:10 if you are catching it from hong kong. this is bloomberg. ♪
a flat open in sydney. let's get the singapore where the milken institute summit kicks off today. hows taking a look at changes over the past 20 years could shake the region's path to 2037. amin get to work haslinda -- to haslinda amin. there is uncertainty in the next 20 years. what that means for jobs, where will the jobs being? they will talk to us about the next 20 years. there is a growing divide between technology and banking. in my conversation yesterday, they talked about how they disrupted the banking world and 30% of the jobs will be [indiscernible] do you share that view? mike: when we think of banking
and financial institutions, you're talking to the consumer, the individual. one billion people on the planet will go to one of facebook's websites every day. amazon has hundreds of millions of customers. alibaba, tencent, and so on. these individuals feel closer to these companies than they do to their financial institutions. way to is well on its being may be the largest financial institution in the world. that relationship will be a technology one. your mobile, smartphone will be your bank. there is a dramatic change in that relationship. haslinda: you said alibaba could be the biggest financial institution in the world one day. ofs that mean the likes jpmorgan will not be nimble enough to adapt? mike: they serve different needs. companies, making
financial markets, advising people, that is one element. who is depositing your paycheck? where are you paying your bills from? tradition theto banking as we know it has always been these new, digital companies and the seven most valuable digital companies in the world are digital. and this revolution that started dramaticallyp has changed all industries and will continue. the revolution of biological genomesion and data will change other industries just as much. haslinda: when you look at regulations now in anticipation of the future, what needs to change? we need to go back and see what were the central causes of
our problems in the past. you go back to the asian , a few20 years ago financial institutions held a country's access to capital. in thailand, you had five banks. if they get into trouble, they are all in trouble. the individuals that are dependent on those few financial institutions for access to capital. , this united states occurred in 1974, where financial institutions got into trouble. and we switch to public markets, public and private markets. in the 80's in the united states your banking system shrunk .ubstantially bank of america shrunk by 50%. it did not affect the economy because the economy was being
financed in public and private markets. the evolution that you are not dependent on anyone financial to should, but thousands of institutional investors, can finance the country, that was the lesson of the asian crisis in 1997. haslinda: you talk about the markets and credit. do you think credit has been priced appropriately? i would saynow, when you talk about it being appropriately priced, there are many parts of credit. today, the yields are extremely low. therefore, you're not getting paid much of a premium to invest. even more important is the covenant. there are very few maintenance covenants. that is why it rated equity is so attractive. there are thousands of private equity companies.
this is our golden age. you can borrow and leverage without covenants. very unusual rates of return. they are playing an extremely important role in the market and will continue in the private equity firms. today they control more businesses and companies that are listed. haslinda: we have to leave it there. we will continue to broadcast live from the milken institute conference here in singapore. betty: a great gathering their of leaders and prominent voices. thank you so much, haslinda amin with michael milken. alibaba taking on traditional brick-and-mortar supermarkets, but with a twist. with anss world exclusive interview with a daniel zhang. this is bloomberg. ♪
betty: alibaba has a rollout of its new retail supermarket that marries the online and off-line shopping world. steve engle spoke to ceo daniel betty:zhang. >> we do not view this as a separate world. retail this as a total world. online, off-line, we cannot separate. years, wet 10 or 15 are an online retail platform. but today, it accounts for 15% of total retail. believe 85% of the they needetail today, to do a digital transformation. young consumers hate to see a shopping mall everywhere.
they're the same type of shopping mall with the same brands, same display, same products, no difference. people want a unique experience. steve: what do you envision? how many brick-and-mortar presence shops do you see in china in five years? all the retail formats will be operating or even redefined. [indiscernible] is not to develop brick-and-mortar chains. we want to incubate successful models. and use technology and the retail format, and operating know-how to empower our off-line partners. everybody has a big chance to go digital. but people need to change. the most important thing to do is embrace the change. steve: how efficient is the
logistics system in china? parcelit is the largest system delivery in the world. the you do not control 100% your logistics and supply chain. daniel: for just six is very logistics is very important for customer experience. we look at how to extend, how to operate the existing system. the chains have been there many, many years. today, with this digital transformation, they want to build up a new world, for e-commerce. this is logistics for all business. we have to upgrade the whole system and make it an open platform. today, if you look at the volume of our package platform, it is
so we need tablets installed... with the menu app ready to roll. in 12 weeks. yeah. ♪ ♪ the world of fast food is being changed by faster networks. ♪ ♪ data, applications, customer experience. ♪ ♪ which is why comcast business delivers consistent network performance and speed across all your locations. fast connections everywhere. that's how you outmaneuver.
in sydney, 30 minutes away from the first major market open. take a look at the beautiful shot in sunny sydney. we are looking at a flat open when it comes to the asx. lots for investors to digest. the aussie numbers for august, and a flurry of japanese micro indicators. betty: it is 7:30 p.m. wednesday in new york, getting darker earlier. markets closed higher. we continued our record run in stocks. i am betty lou in new york. haidi: i am haidi lun in sydney. you are watching "daybreak asia
." let's get you up to date with first word news with courtney collins. >> u.s. officials say russian efforts to influence voters through social media is a red-hot focus of special counsel robert mueller's investigation into the election and possible links to president trump's associates. one source said mueller's team is zeroing in how russia spreads they can damaging information, and is seeking additional evidence from companies, including facebook and twitter. canyon bridge capital and lattice semiconductor handled their merger pact after president trump block to the deal, citing national security risks. the private equity firm, backed by a chinese-backed manager. it may harm other chinese deals, including ant financial's moneygram takeover. the year in -- european commission --
john called juncker -- jean-claude juncker's comments are to china's state-owned giants. it he said the e.u. must single out infrastructure in defense technology. saudierg has been told arabia is preparing contingency plans for a possible delay for the aramco ipo. the timetable for an offering in the second half of next year is increasingly tight. it could see the biggest share sale in history delayed by a few months into 2019. when sharesent on will lift overseas is not expected until next month. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. it is all about inflation
for central banks as the fed revs up for its meeting next week. the bank of england meets just hours from now. hays here with more. you cannot find a central banks on such a different sides. kathleen: the bank of england is in a different position. with inflation rising, they are saying things are not that weak in the economy and we should do something now. mark carney will be speaking after the conference. definitely explaining what they did. bank of england hawks are looking at u.k. inflation rising far above target, showing labor markets getting tighter. they say, let's hike of the rate now. asking, this is caused by the british pound falling. , putat g #btv 8056 together by stephen ingles, one
of our big chart-meisters. look at the pound, how it fell after the brexit vote. now it has gradually come up. as you see inflation rising, you see the impact of that drop feeding and a higher import prices and higher inflation. u.k. inflatione rate, and the target is around 2%. however you look at it, it shows the reason people argue for the rate hike. doves are saying, maybe we should not be moving so fast. the other things doves are looking at, even if you have inflation rising from you have wages pretty flat. i am looking at g #btv 87. up to 2.9%,adline, the white line. the wage growth, three-month moving average, does not look
like it has come down, and it is flat. this will hurt the consumer because prices are rising faster than your paycheck. the risk is that when the vote comes out thursday morning in the u.k., we will see a split, not just 7-2, but three hawks against. that could be a signal that maybe by november the pound will sell out, and the bank of england will be ready to move. i still think with some much uncertainty over brexit, even november might be too soon. betty: why is that surging u.k. inflation causing traders to jump on reflation trade? kathleen: they say may be global reflation trade is back. ppia inflation, cpi and surprisingly well to the upside this week. they are saying, maybe the fed will see inflation rising here, too.
the odds for december up to 39%. they had been down to 22%. i want to look at another chart, g #btv 8071. it tells the whole story. here is the turquoise line. here, under 5%. now it is up to 6.3%. son -- some economists are saying the pce moved together. could that mean we see the end of the drop in the pce core, the fed's main gauge? maybe it will be closer to 2%. meanwhile, the 10 year note yield, so far the market has not paid a lot of attention to this. bond,we saw a selloff in third day in a row where demand weak.ek. w --eak. --
big rally in bonds. at the dust settle and see what happens next. haidi: it is putting more focus on the u.s. inflation rate. cpi on thursday. will any of it change the game as we justify this reflation trade that? kathleen: not in a big way. today.them ppi -- the ppi today. ppi up toe headline 2.4%, year-over-year. a lot of that was a jump in fuel ices. the core ppi year-over-year up to 2%. they do not watch that as closely as the consumer price index. here is what we are expecting when we get the numbers thursday in the u.s.
the cpi year-over-year is supposed to rise to 1.8%. the core is supposed to drop to 1.6%. 80% of economists we surveyed a bloomberg say, no, we know the cpi will be accelerating. the weaker dollar is a big factor. the hurricanes are going to mess with all these inflation numbers for a while, but could push them higher than they would be otherwise. are saying, if you get a turn in cpi, a could change the tone of what people are expecting. maybe not so much in fed moves on rates, but how the policy statement will sound. one more chart i want to show you to put this in perspective is g #btv 711. mainan see the fed's index, down to 1.4%. now you can see the core cpi, about 1.7%,llen to
supposed to fall to 1.6%. broadly speaking, these indexes have moved together. even if the core falls a little bit. if you see the headlines changing on the cpi, we will see both these number starting to turn. this is why people are watching the consumer price index so closely tomorrow. when the fed does me, no fed rate hike expected. we think we will get the timing. for everybody, inflation is in focus around the world. isn't it, haidi? haidi: it is, kathleen hays for us in new york. across currency reserves asia have never been stronger, withholdings in many countries at record levels. enda curran has been looking at this phenomenon. why our asian supporting their effects reserve? enda: it is a very deliberate strategy.
some are buying foreign currencies such as dollars. they are building defenses ahead of the fed meeting next week. the worry is, once the fed it shrinks its balance sheet, it may trigger volatility in emerging markets in asia. results in capital fleeing asia. when a central bank of international currency spends to defend its local currency, that is a key piece against alibaba volatility. the central banks, in the event there is market jitters. where used to this when it comes to china. where are we seeing the biggest gains? you look at india, they are on track for a record 400 billion, enough to cover one year of imports.
significant, when you consider how hard india was it by the taper tantrum in 2013. we also see records and taiwan, thailand, south korea, indonesia. china has the biggest fx reserves. they lost $1 trillion, but are rebuilding that now. there comfortably above the $3 trillion mark. the asia reserve story looks strong. betty: how worried are the policymakers about the fed? center. is front and this is what all the policymakers have been waiting for. indications are they are taking it in their stride. broadly speaking, asia and emerging markets have done well. central banks in asia have not had the -- it is an unusual coupling. we are going down a new route, a balance sheet tightening.
conditions appear quite calm. but there is always risk of surprise and some countries might be vulnerable to some sort of volatility triggered by janet yellen's announcement next week. there is caution, and that is why they are buying foreign currencies at a record pace. in indiae reserve bank was among the hardest hit by this taper tantrum. are they prepared better for fed tightening? enda: most certainly. back in 2013, investors dumped indian currency in droves. we have seen strong inflows into the rupee. the reserves are headed toward her record level, a nafta cover a year of imports. much better than they were in 2013. haidi: enda, thank you, part chief correspondent talking about asian central banks, bat tening the hatches.
elsewhere in the region, a feeling maybe asian equities are hitting their limit yesterday. we saw those markets flagging. outside tokyo, we see the gains continue to be driven by that weaker yen. i am haidi lun here in sydney. you are watching "daybreak asia ." betty: i am betty lou in new york. julius baer's hiring spree paying off. they have been growing personal wealth in the region. haslinda amin joining us where she is with the banks ceo, boris kohler d. -- collardi. only justmin: it is the beginning, asia is looking very promising in the coming years. is it starting to pay off in a huge way? boris: a very big way. haslinda: quantify that. boris: it is an indication of
new wealth, record for the first half year. that was strong on the hiring last year. haslinda: how intensive is the cost ratio? where are you in asia compared to europe? boris: the cost-income ratio is higher in asia. high 70's. revenue momentum is the most important thing. asia has a record for the first half of the year. profit contributions to the bottom line or in the double digits. haslinda: when you see it falling? boris: the next couple years. we are investing in the new technology platform in asia. i think the base investments will be done on the revenue will transfer directly into additional. optimisticou seem
about asia. what are your hiring and expansion plans, and how much will asia contribute to the overall business in the coming years? already 20% of our overall business. just looking at demographics, markets, we can safely assume asia will become 1/3 of our business in the next five years. north asia, the china region has upside potential. the philippines and other emerging markets like thailand, and indonesia, also have a lot of upside. haslinda: where do you see the risks? boris: there are a number of risks, geopolitical risks. we don't necessarily think they will materialize.
on the macro economic side, indicators are moving in the right direction. the eurozone is doing better than expected. asia is doing great. haslinda: what are you advising your clients to do? we see the markets really rallying at record highs. is the momentum sustainable going forward? what is really behind this rally? boris: i just think as an thecator of the cash, institutional players or clients are holding, it is bright compared to 2007. andook at our client base that is representative of clients everywhere, of every type, in terms of side. they are still holding 23% of cash. fund survey, at a they are building close to 5% in cash.
these are almost historic. there is still a lot of cash on the side. what we have seen in the past few months, if you are not invested in the market, markets continue to grow up. you have an opportunity. macro corporate earnings, we are in the cash, for another few months of markets reaching new heights. haslinda: what are you advising clients to do with the money? boris: private market equities, that is quite clear. public markets are doing fantastic. i think they will continue to do that for a while. haslinda: the s&p will make a decision today. there are murmurs of the swiss franc could be overvalued. is it? boris: according to the models, the swiss franc has already been overvalued quite a while. world, it is about the economic relationship between the eurozone in the swiss franc.
we have had a rally of the euro in the last few months. to much better levels. i do not think they will do anything for the time being. haslinda: i want to go to the business in asia. for baerstrategic move in this part of the world? boris: what we're for doing this week with our supervisory board is looking at the strategy for the next few years here in asia. the next move for us will be to enter in some of the onshore markets. haslinda: what will you be doing? how will you be approaching the chinese markets? ares: historically, we looking at different ways to approach the chinese markets. certainly, understanding the environment of wealth management could operate under is key, a
key focus we have. typically in a country that has accumulated so much wealth so fast, their consideration of diversification is ripe. i'm talking about assets, that is a concern. also, succession planning. haslinda: could you be at a disadvantage compared to bigger banking,th investment which can offer more complex, sophisticated products? do feel that way about it? those rivals are happy to sell their products on our open platforms. we have access to all fronts. sometimes even better than rivals that rely solely on their own products. haslinda: a lot of conversation about the technology and banking world. business? management boris: we're looking at technology on different aspects.
automation, helping with scalability and volume. is to help bankers be more productive, more information at their fingertips. what other industries called the robo advisors we call robo assistance to our bankers. we think they will be complementary and offering services. and channels to how we interact with clients, had we leverage data we have to favor better information and better recommendations for investment? haslinda: there you have it, boris collardi, coo of a julius baer. much, thank you so haslinda amin at the milken conference in singapore, where we will be getting more interviews throughout the course of the day. get a roundup of stories to get your day going in today's edition of "daybreak asia."
♪ haidi: a quick check of the latest business flash airlines. airbus lost the deal, when cathay pacific switched to the smaller variant. the hong kong carrier delayed delivery of more planes by a year. a similar move by united airlines. they are pulling out of favor as carriers around the world are trying to ease pressure on fares. betty: boeing is raising production of its 787
dreamliner. both moves signal boeing's confidence the composite jetliner will continue to generate strong sales, despite a tough market for long-haul aircraft. they will it jump to 14 planes a month from their current 12. facingchina's hna funding problems over a hong kong development. providedof eight banks money for a project have now decided not to renew the credit. the banks do not it -- intend to extend a fresh loans. hn has been under scrutinya. coming up, we take a look at the growth of private equity investment in asia. that is right, with one of the managing partners of the saysst fund, melissa ma
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haidi: we will pick up the tile wins -- tailwinds on a strong session. stammering feeling when it comes to asian markets yesterday. it does look a little bit next, a lot of this determined by the strength of the china data. betty: we will wait a few more hours for that data to be released. it could set the tone for asia. there was not whole -- a whole lot to carry over into the asia trade other than the fact that oil prices are resuming their runoff. that helped the commodities shares and like we will offer a lift in asia. haidi: watching the energy section for sure.
>> a u.s. [inaudible] shkrelired martin jailed immediately. the u.s. district judge said he posed a danger to the community after the post-offering a bounty for a strand of hillary clinton's here. he was convicted last month on three charges including two counts of securities fraud. secretary of state rex tillerson is consulting u.s. allies in europe about toughening restrictions on your rant nuclear program. they asked officials whether they would fight and expansion of the enrichment program set to expire. this comes a month before president trump have to decide whether to walk away from what he has called the worst deliver. -- deal ever. china is considering punishment for companies that violate rules
-- mergers and acquisitions. the proposal is among revisions being considered for the and time in utley law that is subject to change. toshiba has signed a memorandum of understanding with in capital on the sale of its chip business. the nonbinding agreement is set to signal a deal by the end of september although it does not prevent them from negotiating with other bidders including foxconn. they need the sales to plug a hole in its balance sheet caused by losses at its u.s. nuclear unit westinghouse. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. ryland chin. this is -- i am rosalind chin, this is bloomberg. more gains onhave wall street overnight, not a whole lot of catalyst, we're not
seeing that fogging feeling when it comes to the equity rally ahead of aussie jobs numbers and key domestic activity indicators out of china. >> it does seem we might see the recent rally from the msci pacific asia index stall. you can see from the markets that have opened up it is pretty flat on the nikkei. and on the asx 200 which has opened up but have a look at the south korean kospi. samsung has come out of the box and gained close to 1%. we have that news crossing in the last half-hour that samsung will tie up with we chat for the -- ahead of the note 8 release. markets are range bound due to what you are seeing in the u.s. dollar, starting to pare back some of those losses that it had
seen so far in the month of september and up for a third consecutive session or it was in the u.s. session on wednesday. that is a we -- as we start to see some optimism there could be some tax reform coming through. it has caught the dollar bears off and we saw the euro fall to ande-way -- one-week low the dollar up for a third concession -- consecutive session in a row. we are waiting a number of key pieces of data coming out of the asian session. you are expecting aussie jobs report today always a very volatile series but watch that aussie dollar. forecast for 20,000 jobs created overall in on up limit to remain at 5.6%. it is always a very interesting series to watch. the august data dump out of china as well. expecting 10.5% yield. later in the afternoon after the bell we have second quarter
ppi and industrial production coming through from hong kong. looking at this stage it is going to be a pretty flat session for asian equities today. juliette saly coming us to from singapore -- coming to us from singapore. a chinese private equity firm has been blocked from buying out [inaudible] thatis the fourth time an american president has stopped the takeover of an american company. a pretty small company that we had not paid attention to until now. what is unusual about this case? >> this is the fourth time this has ever happened, that things got this far. what usually happens is companies give up.
is going against them and there is no further point in pursuing this. they have push this as far as they can and they made it clear that under the trump administration there is no appetite for allowing china to buy chip assets in the u.s.. this is a small company, and it is also a pretty rare decision. does it set a precedent, does it have broader implications? the world'ss largest market for semiconductors but it does not have one of the top 10 in terms of suppliers. they will spend as much hundred billion dollars to domesticate supply. part of the strategy has been to go out there and by foreign expertise. what this does is say to the
chinese that is not going to happen. you will have to do it yourselves. your: is anything in interview that would mark it as a concern for security reasons and what does that mean for the ambitions for china, china's chip ambitions? they are not a mainstream piece of technology. we are not talking about intel's microprocessors. the prototyping of other chips. they are useful if you want to get into the chief -- chip industry and useful into medications but this is not something that is going to change the world and power supercomputers or give anyone an advantage. nothing in particular. ifk to your broader point,
china believes it needs foreign expertise, if china believes it cannot do it itself with its internal resources this is definitely a setback. it, in kingciate joining us in san francisco. thumbs down for the buyer proposal. we will talk more about the implications of this decision and what it means for other chinese deals. later in bloomberg markets we will be joined by the chief strategy officer to talk about the proposed takeover of money gram, whether the likelihood of that being approved has taken a negative turn. asia alternatives management has closed at $1.8 billion funding round, they focus on private equity and has more than $11 billion of assets under management. joining me now is the managing partner and cofounder. great to have you on daybreak asia. we have been talking about the the ugly head of
protectionism may be rising its head when it comes to these cross-border deals. asthat something you look at a risk when it comes to making investment decisions that are cross-border? guests: cross order opportunities are currently a short-term risk but longer-term inbig equity -- opportunity the equity sector. this is what we see driving the growth of the china buyout market. by trump, the internal situations that are going on right now, we see has short-term policy effects. the longer-term trend here is that chinese companies that are the largest today are becoming and have ambitions to be global companies and international companies need to access the market. momentum wise, this is not just a one to two-year trend we're looking at. this is a decade or a decade-long trend and private
equities role will be substantial. haidi: how do you gauge and manage that risk run? you have two sites, the trump administration that comes at with policies that are perhaps unexpected but also we know on the chinese side, china -- policies can change from day-to-day and they seem like fairly knee-jerk reactions and unpredictable. as an investor, how do you manage that? guest: we are investing in fund managers that have anywhere from 10 to 20 deals. there are few managers that are 100% hanging their hat on cross-border m&a. there is a wide variety in terms of the type that deals, size, sectors, headline, not headline deals and today to have a large sensitive sector headline deal, most managers today are taking of -- a bit of a wait-and-see approach. betty: is getting the no-go on
these deals, whether that has a chilling effect and how closely you are watching that it comes to your own business investment. guest: we are closely watching that as you rightly said. it is rare that a president has trumped a deal, so to speak. this transaction was surprising both in terms of the size of the company and the sector. we certainly hope that this was an isolated incident. we need to make sure that we understand there is the fundamental globalization of these industries particularly in the technology space. while we find it disappointing we think the long-term momentum cannot be stopped. betty: what was the fundraising environment like when you were racing these funds for fund five, a lot of these investors
are existing investors but tell me the climate. guest: we were fortunate, this efficientur most fundraiser, 85% of our money did come from existing investors and by far, this was quite a contrast from the last fundraiser. our strategy and our track record has been pretty consistent. what you are seeing today, the fundraising environment for asia is the have's and have-nots. those who have back and those you have been local and on the ground, those who have not are also struggling at the overall increase in appetite by all investors across the world, institutional investors is a function of two things, asia has come back on the radar screen asset classt have or geography and private equity. we are seeing that private equity is becoming the new look equity and some of the best
opportunities, particularly the higher growth areas where people are searching for alpha are in the private arena. about thats talk must have class of asian assets. when do you think that changed and why do you think it changed? is -- has beenit growing as an asset class. we started our company of years ago and the fundraisers used it as a gauge to where investor appetite is. the economies have become a mainstay of the global economy and as the opportunities for private equity and the availability of private capital, the scale has drawn everywhere from the largest sovereign wealth funds and institutional investors to the sophisticated endowments and family offices. is ittractiveness of it is relative. in the last 18 months people have been nervous and they are continuing to shy away from u.s.
private equity market where we are seeing record valuations, record amounts of growth. people are concerned about the long-term 10-year effect and trying to seek more out in their private equity portfolios. haidi: beijing's focus when it comes to clamping down on m&a's, do you see this playing out and the privatization theme, the de-listings, reverse listings that could bring money back home, do you expect that to continue? guest: absolutely. you might even be a factor as we see protectionism as you say. we are seeing privatization in a number of different ways, asian companies that are listed in asia becoming private. you are seeing the same thing in the u.s., people who want to not be subject to quarter on quarter short-term thinking or be forced
by analysts to worry about short-term quarterly earnings but thinking about shareholder it valuable finding to be private companies. in asia specifically as you talked about, we are seeing this phenomenon of we call it china go home. there has been 20 if not more companies that have delisted from new york, and have gone private. many have stayed private but for many of them it is a way station .o list in china they see the listing environment and public markets becoming more liquid and opening up to a broader source of investors. appreciate you coming on for us. melissa ma. providing a glimmer of hope for lng supplies on over supplies -- oversupply concerns. making a push into southeast asia. our exclusive interview with the
betty: this is daybreak asia. top techom the headlines to tell you about this hour. people should not fear artificial intelligence will take their job. the technology will change the way we work but will only take jobs away from a very small number of people. ibm's product watson which is making giant strides to tackle cancer. >> by the end of this year watson will have entrained on what causes 80% of the world's cancers. betty: verizon will decide when to deliver a tv service.
fascinates to take advantage of the advertising capabilities of its aol and yahoo! applications. >> whether we use that as a platform to deliver content or we operate as a separate stand-alone product, we have not made that decision yet so it will be a combination of something that we do or a partnership with someone else. we will from that up over the next six months or so. alibaba plans to push more heavily into southeast asia where it has taken a controlling stake in [inaudible] alibaba vice the chairman and the cofounder on the company's 18th anniversary. he told us the key to southeast asia is to offer platforms for e-commerce and e-payments. servee want to be able to
2 billion consumers over the next 20 years. we should be going outside of and havehave access touches with these consumers and with a mobile wallet and -- for us to grow that internationally. >> it is another marrying of the online and off-line world trade i was reading up on this true money financial product that is sold at 10,000 711's. is that a model that can be replicated if you -- throughout southeast asia if there is this kind of kiosks, how do you envision it? country will be different depending on the local circumstances. if you can buy a mutual fund at
a convenience store, that is one possible use case. >> banks and brokerages are not going to like this. to >> whether they like it or not, new innovation is coming so they will have to think about their own business. maybe disrupt themselves. >> to you see themselves -- yourself, either targets on the radar to buying brick and mortar retailers in southeast asia? >> you never say never. right now we do not have any specific plans. we know about the different stakes you have taken in like brought red mark. how do you see your new retail concept in china translate in to southeast asia through these purchases. >> we have to take these step-by-step. southeast asia over the next a game 10 years will be with e-commerce
taking more share of overall retail. today, i think as a whole market, southeast asia is less than 2% e-commerce penetration. to indonesia to my this year they will have less than 15 ball -- 15 dollars of gmb for the country. there is a lot of growth opportunities and we want to take this slowly step-by-step. >> you have to be fast, don't you question mark tencent and others are also investing whether it is into ridesharing, rideshare, you are interested in grab in singapore. is there a land grab right now for these kinds of assets? >> they are following us, they are saying that we have already positioned ourselves very well and they are playing a catch-up game. what we want to do since we
tweet. addressl have to power. capability and cathay pacific switched to [inaudible] to a smaller 900 variant. it differed delivery of more planes. the larger jetliner is falling out of favor as carriers around the world rein in capacity expansion to ease pressure. betty: boeing is raising production of its 787 dreamliner while bolstering an accounting measure. both signal confidence that they will generate strong sales despite a tough market for long-haul aircraft. dreamliner production will jump
president trump's associates. they are varying -- [inaudible] and seeking additional evidence from companies including facebook and twitter. havece semiconductor terminated their pact. canyon bridge capital partners is a private equity firm backed why a chinese state-owned asset manager. it may harm other chinese deals seeking u.s. security clearance including the financial money gram takeover. the european commission president said foreign firms should face tougher scrutiny if they seek to snap up companies are technologies deemed key to the eu to the security. the comments are seen as a message to china's state-owned
giant. the eu must always defend its strategic interests singling out defense technology. and contingency plans. the timetable for an offering in the second half of next year is increasingly tight. it could be what is likely to be the biggest share sales in history delayed by months. announcements on where shares will list overseas is not expected 10 till next month. global demand will climb by the most since 2250 -- 2015 on stronger than usual consumption. increasing the estimates were demand growth by 100,000 barrels a day to 1.6 million. it suggests producers are having success in reducing inventories. >> the fact that demand growth as you said at the beginning is being revised upwards. it is not the first time we have
revised it upwards. that indicates that economic position is proven and the u.s. is quite strong. we could see more upside to demand. rosalind: global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. haidi: let's get the state of play when it comes to markets. taking a look at a losing steam situation where looking at. ofiette: with the exception south korea. we are watching the japanese yen little bit more strength after it felt by one third of what percent against the dollar. 110 point 48. the has been a report of an earthquake near tokyo so you could see a spot coming and in the end. having a look at the nikkei fairly range bound area
mysterious market is being weighed down by what we are seeing in the base metals mining space. we did see a lot of selloff in the players on the london metals exchange. in terms of index points it is the biggest lacquer in the region. you have rio tinto off by 1.3%. some of the banks are coming under pressure as well. having a look at what is driving the market, we are seeing korea outperformed the rest of the region. jump.eflects the 1% samsung is going to be releasing its new note eight phone in china on september 29. it is going to be pairing up with the we chat. quite a bit of a spike coming through. also watching some of the other players in that space. it has released a line of of games, 40 new games that has released including super mario oddity.
want to watch. we are keeping a close eye on the aussie dollar which is going in an hours time. we get that employment data coming through from australia, always a volatile series. watch for the aussie dollar, we thousand loss. we have retail sales of china, industrial production all of that weighing into the aussie. betty: on the markets, the hiring spree is paying off. they are stepping up recruiting in asia. based on growing personal wealth in the region. boris colored he says he expects a third of the banks business to come from asia. is 2225% of our overall
business. just looking at demographics at the macro, looking at the market penetration that we have today, we can safely assume that it will become one third of our business in the next five years. north asia, the greater china region, a lot of upside potential. other markets in emerging asia, thailand and southeast asia. also a lot of upside. risks?e do you see the >> there are a number of risks, political risks that we are following. these are -- we do not necessarily think they will materialize. on the macroeconomic side indicators are in the right direction. the eurozone is doing better than expected. asia is doing great. haslinda: what are you advising , is thatnts to do
momentum sustainable going forward and what is behind this run? thatthink as an indicator institutional players or private clients are holding. they seem quite high compared to 2007. is representative of clients everywhere in terms of size. they are holding 23% of cash. i was looking at a fund to survey, a most 5% cash. these are historical highs. there is a lot of cash in the ife and what we have seen is you are not in the market, you're not invested. you have an opportunity. numbers, theing at macro corporate earnings looking at the cash inside of the markets, we are in for another
certainly few months of markets testing new highs area and -- highs. the robust growth story looks set to continue with the next lot of industrial numbers. retail sales are due thursday. they are expected to be quite good. investment looking slow. malcolm scott is joining us. talk us through these expectations. we are expecting this kind of stability growth story to continue into the 19th congress. that slightlyw weaker than expected july, we are expecting momentum to come back for august. on industrial production, the 6.6er we are looking at is percent growth from a year earlier up from 6.4%. on retail we are looking for a
10.5% growth from a year earlier and slightly up from 10.4 percent we saw a month earlier. investment we are seeing slowing . bit further to a .2% that is a stimulative figure for the first eight months of the year from a pace of a .3% in the first seven months. we may get credit data. that could come sometime this week, it might come this afternoon. we're looking for new loans of 1.2 8 trillion yuan. the [inaudible] in one month. betty: how is that data going to impact policy in china? malcolm: we have the party congress coming up a month or so from now. it is unlikely to see any big policy u-turns. they do seem to have kicked the boxes and got the economy on track. that is pretty much in the back now.
on the monetary policy front, no economists are picking any change to the benchmark interest rates one way or the other. we are seeing some slight tightening of operations in the money markets. lengthening the tenor of the liquidity, adding to the economy and that has been at a higher cost to squeeze out some of the leverage that had been taking place. some of the speculation had been taking place at the short end of the money markets. betty: we will leave it there. comingthat chinese data up. lng supplier dollarss have not suppliers have not given a reprieve. we will discuss where that is coming from. this is bloomberg. ♪
haidi: this is daybreak asia. been: lng suppliers have given a reprieve over worries an oversupply thanks to a surge in demand over the last six months. according to your report the liquefied natural gas trade is going to grow the fastest this year since 2011. what is going on with this demand, where is it coming from? good morning. after the fukushima incident in march 2011, basically, japan needed to import a lot of lng because its nuclear reactors were off-line area -- off-line. support to lending lng demand growth in asia. the big story is china. the economic growth is coming back there and essentially, they are importing a lot more natural andto have cleaner skies
reduce air pollution. last not least, there are a number of emerging economies, countries like you stand, jordan, or academies in latin america that are able to relatively cheaper lng given an abundance of the fuel right now. betty: you mentioned japan, the world's largest lng importer and korea come second. is that going to change anytime soon? is obviously trying to revive its nuclear capacity and building a fair bit of renewable energy. coal is relatively cheap at the moment as well. contribute toors the japanese demand going down over this time. in korea, the president's new policies are giving a lift to lng demand in that country. region the share of the of korea and japan, it is going
to decline over time. chinese going to surge ahead and according to our forecast become the second-largest importer of lng by 2019 ahead of korea. will become the biggest importer of lng in the world ahead of japan. significant growth is in india and southeast asia. asia has remained the center of gravity for lng demand globally but the center of gravity will shift within asia itself. betty: the trump administration is targeting exports from the u.s.. how successful are they going to be? exports and coal exports are an essential piece of the current president's policy initiatives on energy. --y have tried to reduce it the regulatory burden and make the process faster for
exporters. new projects are coming online in the u.s. today. the challenge is not regulatory but economic. before they decide to build these projects and the bankers decide to fund these, they have to find buyers who are willing to buy the fuel for a long-term. it is getting difficult to find these long-term commitments from buyers because non-u.s. suppliers are selling lng on oil and x and oil is cheap. it is difficult for the u.s. suppliers to compete in the market with new supplies right now. low price thate is the key reason for demand growth? guest: the price is one of the key reasons for demand growth but there are a couple of other things happening in this market. the first is technology is him proving -- is improving. countries that pakistan can set up floating storage and these
terminals do not need to be built offshore. they are cheaper to build and faster to deploy. that is helping new emerging countries import this field. the other is more commercial given the flood of supply coming online in the next two or three years. suppliers are willing to give more flexible negotiation terms to their buyers and buyers are able to find long-term contracts but able to really asked to resell lng on these long-term contracts to someone else if they do not have demand in their domestic markets. that flexibility has been boosting demand. haidi: if you are taking a company level view, what are the key players you are watching for in this sector? guest: with beijing's become aon, shell has key player in this market.
other international oil companies like ap, chevron, or exxon are big players. they have used their investments in lng and natural gas as a diversification from oil as demand for oil looks a bit uncertain, given the impact of new technologies like electric [inaudible] asia is critical and japanese and korea as well as chinese importers like synaptic are key players and there are a few other important ones emerging in this part of the world including [inaudible] thailand.nd haidi: in terms of the long-term lng contracts, is that going to have any set of dan 20 comes to confidence? guest: lng contracts are being
negotiated because of a collect in the supply side of the industry. also impacting existing export projects. there is also starting to impact givenrth of new projects, that lenders will surely want to see long-term contract commitments from buyers to find any project decisions. joining us in singapore with a look at the lng market. one than one third of u.s. senators want the investigation into whether managers of equifax violated laws by selling stock within days of finding out they had been hacked. the share sales rewards almost $1.8 million and it is thought
143 million americans had their personal data still in -- stolen. betty: samsung releasing the galaxy note 8. it has a display that curves at the edges. it also partners with tencent wechat. xefore apple's iphone becomes available. haidi: at&t is firing the first shot in a new skirmish offering a free iphone with the purchase of another for customers who sign up to its direct tv satellite service. the promotion begins on friday and applies to the iphone 8 and 8 plus. they have not said if it will be extended to the iphone x. betty: all jacobs is confident that the [inaudible] will go at the ice the company
is -- ice the company is offering. he is not worried about regulatory concerns. >> we're going ahead with the transaction the way that we intended. we will see how this plays out. regulatoryout the issues as well. nothing great in the world gets done as a slamdunk. there is always pieces to the puzzle that you have to work around. this is another piece of the puzzle but we feel like it is fair priced. cut 2.4mw aims to billion dollars rinse annual to single by squeezing costs for components to help finance the shift to electric cars. it is planning to roll out electric models by 2025. think comic is battery-powered vehicles could make up a quarter of sales. daimler says they may be half as profitable as conventional cars. you can get a roundup of
betty: markets and play around the region, you can say right now in tokyo we are pretty much unchanged at this moment. not carrying a lot of the weight or momentum from the rally that we had here in the u.s. let's look over to sydney where they have been trading as well. you can see pretty much unchanged awaiting the jobs data and at the same time from the other data coming out from china having an impact on the major markets. a beautiful day in sydney. up andl, the kospi running, again of it one of 1%. a lot of focus on samsung. look over in singapore, that starts trading in over 50 minutes time. futures pointing to a lower open
in singapore down by .3 of 1%. we have a lot of great interviews coming out in singapore from that conference. haidi: absolutely. feeling the markets are waiting for the next catalyst with politics fading from the headlines. not a lot when it comes to central bank policy. we are waiting on that china data dump to give the markets a bit of direction. this alibaba story is such a big part of this china retail consumer, rising middle-class story. we have a fantastic access on the 18th anniversary of the company's establishment. thepoke to jack ma and cofounder. and want to take a quick look. he talked about the gains we are seeing when we come to the u.s. tech giants, that has been the big driver when it comes to the stock rally. china's tech champions have been s rivalsthe u.s. a
appear. take a look at the gains when it tencent alibaba and versus the likes of apple in the white. tencent up 70%. the apple supplier in turquoise doing better than apple itself. betty: if you want to drill down into the two horse race between -- alibaba and amazon. this shows you how much alibaba has closed the gap with amazon. this is now connect now between jeff bezos and jack ma. quite a bit of drama in the tech world. not really not connect when it comes to the actual market share. amazon has a catch up to do in china. betty: very much so. you can catch more of our unprecedented exclusive access
to alibaba including an .nterview with jack ma group the global on 6:30 p.m. friday in hong kong. haidi: bloomberg markets coming up, what are you watching for us? about alibabaed and tencent, it is the bigger e-commerce margaret and we will get more -- market and we will get more details. in bloombergt markets asia next. ♪
>> what was the human genome project? harder to discover the human genome or be appointed by two different presidents? how much longer can people increase their longevity? what is the single greatest health challenge the united states faces today? >> which you fix your time please? people would not recognize me of my tie was fix. just leave it this way. all right.