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tv   Bloomberg Daybreak Australia  Bloomberg  November 22, 2018 6:00pm-7:00pm EST

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>> a very good morning and happy friday from sydney. the us trillion have just opened for trade. >> in hong kong, welcome to daybreak asia. ♪ our top stories this friday. three semester rock it brexit fundamentally shifting the
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balance of power. >> u.s. markets are up for the thanksgiving holiday. the u.s., we are set from a mixed start in asia. stocks, their hedging -- hedging higher. dollarave the aussie trading steady at 72, 51 u.s. 10. japan closed for the holiday. on the sun and tokyo, we did see the shares edged higher in germany as we have these remaining in tact. they seek to improve the bargaining position.
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>> thank you. sterling roasts struck a brexit deal in brussels. critics at home and on the continent are unhappy. -- keeps the u.k. in the eu with no influence. >> i will refer to brussels in the meeting where we will this to aw to bring conclusion in the interests in all of our people. the british people want to be settled. that deals within our this grap. >> italy passes current financial conditions are far too
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tight for a country with weak growth and slow inflation. italian bonds have risen 3.5%. far higher than 3.5 a year. >> president trump froze this for central migrants. >> without evidence, he is prepared to shut down the whole border. shutting down the whole goods. >> strong wind whip up flames. working to contain a blaze on three fronts. north of sydney. firefighters warned that strong winds are likely to continue all day. frustrating containment at --
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efforts. global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> think you can movie to ease concerns after the japanese foraker unanimously voted for the board they weresterday, apparent -- apparently unanimous. we are expecting a close vote of seven directors who are going to be there, minus greg kelly, on these allegations.
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knew it was a simple majority, a 4-3 vote would be enough to carry the motion to have him removed as chairman of nissan. it went 7-0 come unanimous. that is why perhaps for meeting went quite long. and they had to explain the investigation that nissan conducted over several months that came to these conclusions of why the board should oust him in the tokyo prosecutors should take up the case and try carlos whichese various crimes, the tokyo prosecutors office by the way yesterday held a press conference and said if the allegations are true and they decide to indict and convict, that is a 10 year prison sentence. also it doesn't bode well for -- he is reaffirmed
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as chairman and ceo. nissan,board members of there was speculation they would .ack carlos >> a voice for the japanese. quite it would seem this would give more bargaining power for those who have more recently publicly stated his pleasure with the relationship holding structure.
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i said it over and over again. you have a 40 percent stake with nissan and voting rights, with no voting rights and knees on contributes the greatest of revenue. globally. he likes the alliance as a way of being a global leader in the auto industry especially in this time. the relationship on the share structure is not equitable. we are hearing for media reports here. nissan will go that path perhaps.
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>> facing 10 years if config -- convicted. >> the prosecutor's office is quite direct in their comments yesterday. crimeare quite heavy and if proven guilty. they take the case, they take them to court. more serious than insider trading. a five-year prison sentence in japan.
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could be upwards of 10 years a prison sentence. convicted of those legal crimes. >> we learn more ahead. thanks so much, steve. asian stocks set for a crisis potentially on friday, a third week of losses. global equities fund manager. more speculation the fed could perhaps turn more dovish in 2019. look at the outlook for asian equities be? >> potentially 2020, it is basic -- basis of
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the current pullback we have an markets. the debt, will certainly be believed to a certain extent. asiarowth prospect for will come as an opportunity for investors. >> the dollar strength has a lot to do with this scenario. do you expect it to lose steam given the dovish case for the fed? >> that is part of the equation. remember, when you have for a long time, we have a first rate ofe of the cycle in december 2016, bearing the december of 2015 one, the rate rise over the ofrter, pressure on the rise
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capital. , october, for the next 24 months. it is pricing in weaker earnings. it is out. >> increasingly more voices is going to have a green light for emerging markets. we still need to see an improvement for the trade war to
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happen. >> yes, of course. it has probably been the second-most important there. having full rate hikes, 2019, 2020, perhaps two going into next year. doing some homework on the fact that emerging markets trading is around 30% discounts to markets and growing twice as fast. the rise of caps on markets discounting to slow down and that will be quite interesting i think. maybe a couple more dovish hikes out.
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we're seeing on the supply chain, the capex made in this kind part of the world. to what extent does that ring some parts of the center, semiconductors were asia. >> it is taken out by the variation. is how now understand important it is for the u.s. administration to pause as soon as 2019. it is up 25%. this uncertainties keeping engaging inom emerging markets.
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i think that at the end of the day will be the key vote of whether or not there is a priority for the u.s. administration. >> it still remains a question or two. , what isnticipating the packet. as a result, exports become more competitive. the result could force another round of evaluation for currencies. understanding if it is as much of a priority picture today for example for vice president pence. >> stantec in particular is still a sector you got bullish
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on. >> yes. simplyt is a multiyear because it is helping the financials. to improve customs by cutting improve yourn return on equity going forward. that remains intact going forward. >> have coming up, carlos is gone. so what does that mean for the shake your lines? that question will be put to jeffrey japan. just ahead, goldman sachs and
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j.p. morgan chase are sticking with the forecast for the federal reserve. bloomberg. ♪
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>> this is daybreak asia and hong kong. , assetl with us management global equities fund manager, out of the u.k. and out of rustles. it is one hurdle to go through. you still have a lot of voices saying the u.k. assets and the pound is virtually unattainable. you will be a little more bullish at this stage?
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>> yes. get more bullish because we are coming toward a solution in the markets, the , worstarkets racing in case scenario, the currency suddenly as well. it will be taken quite well with the market. ride, if you take a look it, the negative growth story we are not looking enough that at this point going into next year, take acai the brexit we still have that
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growth other than places like germany looking lackluster going into 2019. the point with the ecb is it is in some kind of mode. have quite a number of good news for the ecb. they can start to normalize interest rates in europe by the end of 2019. the problem for europe is it is growth welll, the below trend. i'm countries tell you going through political turmoil. it makes it difficult as an investment as such.
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it is quite significantly more attractive than in the u.s. you would clearly buy into a market discounting quite a lot of bad news. >> uncertainty when it comes to europe in light of italy and brexit and asia where we are focused on the upcoming trump meeting, the rest of the world as well. radar, -- the >> the largest piece of is the intentions of the u.s. federal reserve, you have to have a better idea of whether the policy is set on a country with data not global data dependent. be, theelieve could
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effects of rising global , lessl, not just the u.s. hawkish when it comes to that. the risk is that they don't. betweent we're seeing china and the u.s. gets worse. areentral banks in asia navigating. i want to show this chart. that is looking less so in recent months because of this speculation about the dovish fed. are you seeing more of a , itnger case being created
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may not be as influenced by what is going on with the fed. >> the tariffs, will benefit from low -- lower oil prices. the point of view from a more benign environment. hasil for example responded, mexico has specific issues as well or even turkey for example. it makes investors nervous. the rising cost of capital brings volatility for future earnings.
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if we don't get a more benign 2019.ic, you can check out the chart. featured on bloomberg tv. this is bloomberg. ♪
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>> i'm in hong kong. a quick check it quick check of the headlines. -- the luster journal says officials have reached foreign counterparts and executives in from a nations where it is operating, including japan and germany and italy.
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>> thousands of the products are pulled from the retail website. a nationwide boycott that went viral. a video campaign and instagram,'s were seen as racist. , chinese consumers spend more than $100 billion on luxury last year, about one third of the total. >> may be able to take some encouragement from science the pendulum is finally slain their way, if it passes biggest stock club -- stock closed above average for the first time since june, 210%. it was boosted by third-quarter update better than expected. investors will watch closely one hong kong opens later. let's just ahead, theresa may says the brexit go is in her
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grasp. there is grumbling in u.k. and in europe. the outlook for european banks next, that is coming up. this is bloomberg. ♪
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plus a free pillow - and free shipping too. just go to today. you need this bed. >> we see it is flat treading water this friday morning. i'm in a sunny and beautiful sydney. >> we are seeing the sun breakthrough here in victoria harbour in hong kong at 7:30 a.m. you are watching daybreak asia. let's get a check on how the markets are turning our into trade. little changed as he pointed out
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. the aussie dollar is holding steady as well trading at 7251 u.s. cents. when it comes to what is moving the dial or not when it comes to the benchmark, communication and material stocks weighing the most while real estate players are leading gains. seeing a gaining ground. results it is in line with its plan. automotive holdings falling as --h this after forecasting offered profit guidance taking a hit at the rise it -- highest level in two years on thursday. tech is dragging in sydney. let's get you to first word news in beijing. >> thank you.
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reiterating their support despite five -- a firing. strong backing for what they called a winning cooperation. by a ceo.ater backed he voted unanimously to dismiss in marked contrast, who appointed an interim leader and asked the partner to do the same. china has rejected u.s. accusations that it has done nothing to hold technology and intellectual property. the claim was dismissed as unwarranted and said the trump administration is wrecking relations. this comes weeks before president xi and trump were expected to meet. administrationgoldman sachs thed chairman lloyd blankfein met privately in 2012 with the alleged toinance are be at the center of the scandal. federal prosecutors are now
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meeting as part of the investigation. without knowing he will be diverted. the leaning tower of pisa is not leaning quite so much. the tower has been strained further and is in better structural health than expected. 10 years, it will collapse. the counselee to pull the building up. global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am tom mackenzie. this is bloomberg. >> let's take a look at the moving markets.
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voices talking about the salvation of the emerging markets of the emerging markets at this point particularly at the process of the doing a couple of dovish highs doing no more. there are considerable risks. specifically looking at what is going on in 2019. three hikes detected for quite some time. markets were projecting and then they started to project one. they were taking one of the table. quite, projecting two was a recent one as they tried to catch up with the fed. all of that is in flux. at least for the next little while, we have got an aura of,
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things are not going so great in the market. people are rightly or wrongly starting to price in the power the housing market helps. >> yes. it is almost as though emerging markets for now want cbs to pay 500. that puts the pressure on how much not to raise and that has reading space for the emerging market. that is the oil price. it is very happy. to catch a break with this as well with the dollar. >> it is also hoping that there are signs that perhaps part of the cocktail of easing measures
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that have been brought in having the effect. you have actually got a situation with the markets dropping about 2.5% in the market. has been a long time since we saw that the virgins. >> action for the british pound trading here this morning. for sterling, with the brexit deal, so much uncertainty to be had. >> there is a world of uncertainty, the biggest is whether theresa may can get the u.k. parliament to sign off on this. that will keep the uncertainty.
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strongly,g, that she if you really did have the markets have been higher, we talk to the less than 1%. there is a lot of caution remaining and a lot of volatility to get on either side of this before we get to any sort of a clear brexit solution. >> can follow more on this story. and analysis from the bloomberg editor's, you can find out what is affecting your investments right now.
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the u.k. and the european union have agreed to the print -- in principle to the brexit deal. may, wenister theresa have the details from brussels. >> prime minister theresa may finally has her brexit. the two sides would see an area that has deep corporation. they are containing to be strong and in the future. there are some concessions you could argue could help her get those for the u.k. parliament, they have to do with the separation between northern and the irishnd, scene. they agreed they are determined to never have to use it. and find a way out of it.
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there is also migration which theresa may could argue is about taking back control of our borders and if people will indeed, as part of brexit, the big question is the eu 27 leaders are expected to sign off on it. that will be over to the u.k. parliament to decide whether finally sealeal or it if it is approved. we see the brexit take place. the big question is whether theresa may has the numbers to do this is a doesn't get through. it is a nightmare for the u.k. prime minister with the entire brexit process and the timeline to it. it could be called into question. mulberry news, brussels. >> an exclusive interview with the general chairman, lorenzo gave us his views of where the banking industry goes now with the brexit. >> have to start moving and you cannot wait. hopefully, there would be an
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agreement and parliaments in the u.k., and hopefully we have a one-year transition. cost to increase for any banks. lead banksnevitably to can's -- to consider the operations in london. >> what about the city of london? it will be one of the best still. >> if the course is between, looking at negotiations, the financial issues have had so much of an importance. the british governments and -- simply said in the end --
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>> why was it not a priority? >> that is the key issue. in the u.k., they do not want financial systems. in order to protect the u.k. economy, inevitably, which is totally understandable but it means increasing the costs. the u.s. banks bring back in the u.s. and continental european banks, we will see of course. we haven't seen the details. >> how many people are moving back to paris? >> we have the flexibility. more than 2000 people in london.
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we have the flexibility so we will see. we have to take strategic decisions at some point. also, banking in europe in ,eneral, needs restructuring sure weagain, to make , something that all banks are having to do, more effective. >> thisrexit happened, is going to help guide the
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relationship. the day after, there will be some diversions is inevitably. run -- whether one is or not pretty u.k. versus european. the market, with the them -- [inaudible] even further. gone next, going is emerging as a successor and what it means for the alliance. this is bloomberg. ♪
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>> is is daybreak asia. i'm in hong kong.
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alliance remains unchanged and will work to minimize day-to-day business. jeffries, japan, head of research, joins us now from tokyo. andboard unanimously voted that was perhaps a little bit of a surprise from those of us expecting more dissent. what do you make of this? is it going to change the balance of power when it comes to the alliance? >> i think we need to start by taking a step back and evaluating nissan's governance over the last couple of years. doinging they have been at jefferies, is rating and ranking board structures of the top 500 companies. nissan really stood out.
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had most of the bad government structures, it probably surprised a lot of people. they were only 11 companies last year that didn't have the minimum independent directors required by the corporate governance code. nissan was the only large global ,ompany, the others were small domestic, japanese companies. it stood out in that way that they only had one independent director. when he was at the background of that independent director, even was a next employee and just because they had been retired for a few years, they counted them as independent.
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there were things in nissan's governance -- governing structure that stood out and really required a massive overhaul. example -- >> continue. >> 75% of japanese companies have committees on the board to control nominations of directors and senior management, the compensation of senior executives, nissan had none of that. it really stood out for its bed governance structures. >> it is interesting that it stands out in a corporate culture that traditionally has not exactly been unfamiliar with the corporate governance issues. i thought was interesting and perhaps unfortunate timing we sayingrom the lawyer things have gotten worse. now we are looking at this. has progress actually been made
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when it comes to improving transparency and operations? >> i think it has. not allto remember japanese companies are the same. -- 20%earch shows 20 for of japanese companies are quite proactive in trying to improve governance and adopt best practices. medical to percent are open-minded and willing to follow the rules. you have about 30% of companies where the culture is so bad and need muchat you stronger measures. companies like toshiba have been in that group, nissan is clearly falling into that group. it appears olympus is also in that group. culture.changing the
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all of the board members owning shares. members did not call shares. we have a measure of alignment. that is an important metric in japan. >> the company is studying a committee on governance and director pay. it could become -- become a potential candidate. >> yes. absolutely. goodu look at the
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companies in japan, they have given control of those committees through the outside independent directors. they will decide who gets promoted and how much they get metricsobjective because they are not company insiders. selectd companies properly qualified independent directors. this was another thing that stood out at nissan. when they finally added two independent directors this summer, one of them was a next race car driver and the other was a retired bureaucrat. we found all of the scandals tended to have people on their boards. doing this is good as a first step. they have to have the right structures as well not just for the ceo like carlos but for all
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board members. another shopping thing i nissan. it is extremely low. >> what have they made for nissan? >> these are the three biggest red flags. becomes, you can officially change things. something thats only time will tell if it really happens. >> another interesting point is this is the only whistleblower rules in japan. do you anticipate it is opening floodgates to a lot more of similar disclosures that could lead to these scandals? >> i think so. if you look at almost all of the
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scandals that came out, they have been going on for years if not decades. this is the change in culture happening in japan. there is a clearer understanding of good governance. new rules like the whistleblower and ithat make it easier is starting to develop a culture of saying ok, we need to protect whistleblowers. also starting to have an understanding and the whistleblower is doing something good for its long-term future. there is long to be -- long been a future of brushing it under the carpet for japan and leaving it for later. there is a recognition they need to do with problems now and bring them out into the open. a good thing. this year, japan also implemented a regulation for disclosure where they have to disclosure -- disclose information for all investors.
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there are a lot of different that the government is taking to improve governance. there is a stewardship in japan which requires investors to vote , fund managers and other institutional investors to vote, in the interests of the beneficiaries of the funds and not in relationship to the corporation they are holding shares in, a lot of metrics are being measured and taken to improve governance. the process will take several years. there is a tremendous amount of institutional push behind this. jeffries head of research. look at some stories trending across the bloomberg universe this friday. tick talk on twitter looks at compensation compared with top executives., how the
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fashion business needs to adapt after a come -- they completely missed the mark in china. the brexit deal is finally in sight, the home price slide is shredding. , this is bloomberg. ♪
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>> welcome back to u.s. markets close to the thanksgiving break, india and japan close for the holidays. little change when it comes to the session in sydney. marginally up. changeseeing little potentially when it opens just shortly now. declines round out a third week. next hour,p on the
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the market open is upon us. chief economist -- will be joining us on the show. his global outlook and us of a look at where the fed goes next. this is bloomberg. ♪
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haidi: good morning. the asian markets have just opened for trade. sophie: welcome to "daybreak: asia." haidi: these are our top stories. a third week of losses. india both closing. it brexit deal with russells. celebrating their


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