tv Bloomberg Markets Asia Bloomberg August 13, 2019 10:00pm-11:00pm EDT
david: the latest activity numbers out of china. we are looking at that, as well but they are out. tom: let's start with july industrial output, rising 4.8%. that is year on year. the estimate was for percent -- for 6%. in terms of fixed asset investment, 5.7% year on year. the estimate had been for 5.8%. retail sales, also weaker than expected. july retail sales rising 7.6% year on year in estimate -- with an estimate of 8.6%. weaker than estimated across the board in terms of industrial output, fixed asset investment,
and retail sales. the industrial output question, the tariffs, trade war tensions are at play. in fixed asset investment, there was a view that might stabilize as a result of the bond issuance and pick up infrastructure spending. david: i can tell you now that industrial output number is one ugly number. 4.8%. the estimate was for 6% and i confirm with you guys, that should be the worst phase of growth for industrial output going back to when michael jackson's "dangerous" was top of the charging 1992. . miss we have alliancebernstein's chief economist for china.
bad numbers. 4.8%. >> that is very low. it really for flex how the slowdown in -- reflects how the slowdown in china is happening. currently china not only has the cycle but the uncertainty from the trade tensions. a double down pressure on the economy and it is happening. it is obvious they might need to do more because the economy seems to be slowing down a little more than what they expect. do you think 6% growth for the full year, is that something we should start growth below that? is it something we should entertain moving into the second half of the year? we think 6% is still something the government wants to achieve. that means we need to see acceleration in terms of policy easing. what they can do, is your next question. they have to do infrastructure
investment. they can bring forward the plan to 2019. i'm glad you brought that up because a lot of people were focused on retail sales and factory output but not so much fixed asset investment. fixed were looking at asset investment because you have local bond issuances and proof of where money is being spent. support,ite beijing's allowing local governments to make more money and spend on infrastructure, why is it this fixed asset investment is showing up in the official numbers? among fixed asset investments, there are also a lot of categories. property investment, capital investment, and infrastructure investment. of all of this, the biggest stabilizer for the current economic slowdown in china would be number one, infrastructure
investment, number two, property investment. this is why you see for is antructure -- there upside to it but most importantly for the investment is stabilizing. they can stabilize around the current growth level. tom: we are getting the survey jobless rate, 5.3% for the month of july, picking up from 5.1% in june. this is a relatively new metric. of you seeing any evidence increased pressures when it comes to employment as a result of these trade tensions and the domestic slowdown? not a is a pressure but big pressure currently. mostly the current rise is
coming from the export sector. you see also there is upgrade in china's sectors. restructuring, reallocation of the labor forces among all other sectors. given all of the easing maker -- china's, big jump in unemployment rate. you take into account the weaker credit data we got this weekend this dataset which estimates, does that add to the case for a benchmark rate cut from the pboc? ji: china can really follow the trend globally, we think. the global easing cycle will accelerate. canthing is for china, they cut the benchmark lending rate but also they can cut the prime lending rate.
their medium-term lending or say, they could do even more in terms of the open market operations. whatever, they can provide much more financing to the system. that is already enough for the system. tom: stay with us. we will have more with ji mo, from allianz bernstein. bloombergso turn to for this discussion. geto tliv to commentary and analysis from bloomberg's expert editors. david: let's look at where markets are post this fairly set of numbers out of china. you can read about it. asia's point 9% doing well, .6% pix isast asia, the tomo same as.
the aussie dollar, down 11 pips. look at the chinese markets given what is happening with the economy and we will see what happens on that. decent session bounce backs, short squeeze, we are up-to-date -- up today and to round up the market check, look across assets 1.68 on youries, 10 year. oil, pulling back about 1%. we are above 106 on the dollar-yen. let's get the first word news with su keenan in new york. the hong kong airport has resumed normal operations after another night of chaos saw clashes with police and departing life -- flights suspended. airport authorities have warned
an interim injunction that bans protesters from unlawful obstruction. u.s. intelligence claims china is massing voices on the border. president trump says beijing is in a tough spot, adding he hopes moment gets hurt. u.s. aviation regulators are banning some macbook pro laptops from airplanes. this after apple said some of the laptops had batteries that pose a fire risk. faa says it is aware of the situation and has alerted airlines. someaptops in question are so betweenbook pros 2015 and 2017. the european safety agency issued warnings about the models earlier this month. the u.s. economy, a key measure of consumer prices unexpectedly accelerated in july, signaling inflation may be firming as the
fed debates whether to lower interest rates again. consumer price and best which excludes food and energy rose .3% from june and 2.2% from the year earlier. both gains exceeded the median estimate of economists surveyed by bloomberg. in julynflation slowed for the first time in six months , offering a reason for the r.b.i. to remain dovish for growth. rosemer prices in india 3.15% from a year earlier, faster than the median estimate in a bloomberg survey but still well below the bank's 4% goal. the r.b.i. has lowered rates four times this year and the governor has said future moves will be data dependent. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. tom: still ahead, hong kong
david: you are watching bloomberg markets. if you are among the many people you arefor updates, going to be able to fly out of hong kong today. hong kong express has canceled 14 flights in and out of hong kong today. we will get you more information as we have it. let's turn back to the china data. i have to issue a correction for myself.
4.8% the industrial output growth for china. i said that it was the biggest drop since 1992. i am mistaken. it is the biggest drop since 2002. still quite weak. us, still with alliancebernstein chief economist for greater china ji mo. we are seeing strength in the yuan. there are pressures. there is the relief on trade but the data is weaker. how do you see the currency playing out in terms of strength or weakness in the next few months as we lead to additional tariffs in september and december? we think china's economy is a global economic stabilizer and chinese currency has to be a global currency stabilizer. currency is a relative term.
currency that does not depreciate as much as euro and other emerging currencies. china is a responsible nation. we do not think china will participate in any of the current currency war. without any escalation of the current u.s.-china tensions, we -- level.o believe i wanted to ask quickly about corporate sentiment, business sentiment. we seem increasing stories, or cases of companies, particularly those with a u.s. base moving supply chains out of china, refocusing on taiwan. how and to what extent is this proving a drag on china's
economy or is this something that china can weather? the supply chain reshuffling , there are other things we have to mention. it is very dynamic. the upgrade needed in china, in the supply chain, we want much more of the high-end manufacturing. for the low-end manufacturing, they are going out to other countries. that is fine. in terms of the price, we also manufacturing if you have more high-end manufacturing, you have added value to china's gdp. you also see china's supply chain is very long and complete. some companies are returning back to china.
it will take at least another three to five years for all those middle countries to build this very long supply chain. david: i wanted to pick up on something you mentioned in the previous answer. you look at what happened in 2009. china saved the world bite saving itself -- by saving itself. if the yuan is in fact the great stabilizer, why is it when they devalue the yuan or when it weakens like last week, it becomes a the stabilizer? mo: -- destabilizer. mo: this is a good question but it is the time the pboc just goes with the flow. that's why you see the yen has been depreciating. without china's commitment to reach a deal for a stronger yen, we are at the 700 level. just go with the flow
relative to all other currencies. fear, psychologically it has an impact. david: quickly, it is not seven that is important, where will the currency trade? what is fair value? mo: it really depends on how the economy is evolving. if you see the economy is evolving around the current 6.2 , that should be stabilizing around 7% level. david: hopefully we get that, as well. otherwise, close your eyes. thank you so much. chief economist for greater china at alliancebernstein. almost 30,000 job cuts in less , more on thaths
tom: let's bring you the latest business flash headlines. cathay pacific taking off in hong kong despite the growing protests in the city, prompting china's biggest bank to slash its fear. v -- view. the widening unrest threatens the image. the bank has a stock price target of six hong kong dollars , well below where shares are trading now. david: the maker of hp laptops will shift production of u.s. computers out of china as the trade war heaps pressure on the tech industry. towill move the operation its home base in taiwan as suppliers reassess their independent on the mainland.
earnings call, the escalating trade war is "very painful." thechinese search engine, total number of daily active users has topped $200 million this month. that figure includes mobile devices that have access to the app at least once a day. it said its daily active users reached 188 million as of july. the company reports earnings next week, looking at cost cuts and lowering investments may turn a profit as sales continue to slump. tom: let's break down technology earnings this week. sunny optical has reported earnings. sunny optical rays to outperform at credit suisse and raised to buy at jefferies after a clean beat that saw handset lens price growth was ahead of target. our china correspondent joins us in beijing on the studio set.
were the top lines from the earnings and what should we expect from alibaba later this week? it was better than expected after the slowdown in smart phone sales in 2018. there are concerns about how we regain growth. they benefited from increased sales from huawei. in alibaba, we are expecting resilient e-commerce growth despite the globe -- slowing consumption in china. webaba is set to benefit and will see how they get payoffs from big investments. they have pushed into lower tier cities. investing inn cloud, retail, off-line retail, logistics. they are trying to expand their market share beyond into the broader community of online retail. alibaba also -- >> alibaba revive the deal with
nintendo to unleash the mini console on the china market. in may, it was one of the stringsthat pulled the with the monetary authority to win a virtual banking license. it was and shenzhen, equally bullish signing an agreement with the stock exchange to work on cloud computing research and signed a deal with zte for cloud gaming. invested $35 million in a fintech start up in the u.k.. int month, it went mobile india and invest $100 million in local streaming company. selfrtnered with bmw for driving cars in china and said go to pokemon. the two are developing new computer games to help pikachu become pikachina. lady tapping access to
gaga and taylor swift, negotiating terms for a 10% stake in the world's biggest record label. sources also tell us it is planning to come back to the loan market with a bang, seeking to raise about $5 billion from banks with so many fingers in so many cries, if the loan is approved, there will be loads of ways for tencent to spend money. to alibabaaddition earnings, we expect tencent and that package illustrates the deals tencent has been involved with over the past several months. tencent takes the approach of making massive investments abroad in companies like reddit, tesla, snapchat but they also take minority stakes in companies they want to bolt on top of we chat so they can further gain growth from their more than one billion users on the platform. if we talk about what to watch when it comes to these companies, tencent, alibaba, we
can be here forever so let's zero in on alibaba. what should we be tracking closely? selina: when it comes to alibaba, we want to be watching some of their investments in lower tier cities, cloud computing, artificial intelligence, we want to drill down on the next wave and for tencent that will be in business services. how that can drive growth for tencent. revenuee largest drivers, we are seeing them come off of 2018 lows when there -- where they suffered from regulatory clampdown's. we are seeing them monetize on new games like peacemaker elite, but they have the regulatory risk. we see gaining approvals from the chinese regulator significantly slow later in this year. probably overall, tencent is really looking up as we see investments in fintech and payments really kick off. david: selina wang out of
beijing. 8-iron of earnings to take you on the board, we are tracking not in terms of region -- in terms of regionwide, operated exchanges also out with earnings. we talked about tencent halflength. 2% up. look at other names we are tracking in hong kong. at some of these other names, rio tinto with an upgrade from jg -- jpmorgan, samsung up 2%. final look, flip the board. let's look at big names in hong kong. up,ay pacific, mtr 3% analysts have taken a cleaver to the price of cathay pacific and a lot of you have seen the strong sell recommendation on the stock. we will get you the latest on hong kong at the airport and we
su: 10:29 a.m. in hong kong and shanghai, 10:29 p.m. in new york. i'm su keenan with the first word headlines. the latest economic data from china shows the increasing effect of the trade war. 4.8% inal output grew july, the lowest pace since february 2002. again andfell there is also a dip in cosmetics demand and clothing and household appliances. worry that china's unemployment rate rose to 5.3%.
u.s., president trump has bowed to pressure from corporate america delaying additional tariffs on certain projects imported from china. the duties will not be imposed until mid-december. the president acknowledged higher prices would hurt consumers in the run-up to the holiday season. the two sides spoke by phone for the first time since the recent escalation intention. tankers will be released soon, something that could help ease shipping concerns in the gulf. the news agency says documents have been exchanged between tehran and london and them may problem that problem may be dealt with in the new feature. and resolution could mean the release of the tanker iran seized in the strait of hormuz. pakistan is calling for an urgent meeting of the un security council to discuss india's decision to revoke autonomy to kashmir.
islamabad says the move poses a threat to peace and security, and threatens to trigger conflict between two nuclear armed neighbors. will provoke india a standoff to ever attention from growing problems at home. to corporate news, facebook is being accused of paying outside contractors to transcribe audio clips from users of its services. we are told the work has upset the contractors themselves who have not been told where the audio was recorded or obtained from. sources say they don't know why facebook needs the transcription. it has beenfirms transcribing users audio but says it will longer do so. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. hong kong's airport resumed
normal operations this morning after another night of protests that saw violent clashes and flights severely disrupted. washington is urging beijing to respect the city's autonomy while the u.n. is calling for an investigation into the use of tear gas by police. the airport and our chief north asia correspondent stephen engle who has been covering this for us. tojing, we've had a response the un's comments, no doubt pushing back. stephen: absolutely. we got a statement from the ministry of foreign affairs office in hong kong saying the un's human rights office statement late yesterday on the condition in hong kong was sending the "ron signal." -- "wrong signal." they urged the hong kong government to probe police
conduct, they said they have reviewed credible -- credible evidence of police behavior that is prohibited by international norms. they also urged peaceful demonstrations and condemned any form of violence but also urged the government to listen to the grievances of the hong kong people. let me step away for a second and show you the setting. it is kind of deja vu. similar to yesterday, large stragglers from the day before. they are contained to a marked off area with yellow tape, waiting for news of this injunction. this interim injunction that was granted to the airport authority late last night and then confirmed by the airport authority this morning. the airport authority is waiting for the sealed documents to arrive before -- as required by law, before posting them.
they are aware of the interim injunction. that gives the airport authority the right to restrain any luck -- unlawful activities, meaning blocking passengers from getting to their aircraft were occupying areas that have not been legally designated a demonstration area. they are aware of this interim injunction. they say once it gets posters on the wall as required by law, they will decide how to act on that. today, aircraft are leaving and arriving as much on schedule as possible. there is still a backlog after two days of disruption. again, i can't forecast what will happen in the afternoon. some protesters are telling us they are calling for a sixth consecutive day, which today is, and shows unity among the protesters at the
international airport. david: stephen engle's and the team at the airport. is thethe concerns rivals in the city and the main gate into hong kong is the airport among other ways of entry. have a look at the bloomberg chart. it shows the number of monthly tourist visitors from hong kong and takes you all the way back to 1990. you are looking at the total number. the visitors from the mainland is blue. the red was the dip, and the yellow is the ratio of mainland visitors to total visitors, which has roughly been stopped at about 80% for the last five or six years. what we have heard from the downsm authority is july,
26% into the end of july and you imagine august might be a little low. joining us on set and to broaden the conversation, a unique perspective, carl chun out of robert walters hong kong. he oversees financial services. good morning. you bring a unique perspective. you are on the front line of people moving out and then. all of these things happening outside have had an impact on business. >> we do see a couple of isolated cases. they are actually putting the question on hold. wait and see.e to has for the candidates, we have --o witnessed a couple of they can't bring their clients
from one bank to another. but ifee isolated cases you asked me if there is any headcount cuts or because of the risk -- we do see, for example, going to watch and see and the hiring process has been lengthened. there has been a lot of speculation not a financial centers like singapore might gain as a result of hong kong's losses. is that something you are seeing starting to happen?
is that a prospect, particularly in sectors like investment banking? say what we see, when they choose which city, it is more for a career point of view. it depends on hong kong compared to our neighboring cities whether we have more attractive provisions. would say is hong kong in terms of technology roles, we are not as competitive compared to singapore or the greater bay area. if you look at singapore, there are more emerging tech professions, where in the greater bay area's, it is more a developer's role and e-commerce industry is more developed compared to hong kong. restructuring in terms of the investment banking part of the business. bank laying off
employees and many in hong kong. have they been very exorbitant to the sector in hong kong or have they remained on the lookout for new opportunities? unfortunately, i think they remain on the lookout at this point. is the news we have been expecting and they have been looking for some time already so it is not like all of a sudden, there are more candidates available in the market. yes, they are still looking, i would say. david: if i am looking for a front-office role, front office role in hong kong, do i need to speak mandarin? is it a 100% requirement? nice: it is not, but it is to have and if you ask where the front-office roles are now, it is hong kong. , virtual banks are comparative of retail banks.
because the hong kong monetary eightity, there will be by the end of this quarter, q4. rolesare front office that are not like trading. it is not like equities trading, etc.. and develop loan deposit how to launch on a virtual platform. it is not what we have been seeing for the last few years with investment banks. when it comes to virtual banks, are the candidates -- are the suitable candidates more banking background or tech background? carol: definitely retail banking background. it is interesting. nowil banking experience is highly sought-after. text, but what sort of tech? a lot of virtual banks have
chinese -- mainland chinese backgrounds. banks, theyat the all have chinese investors. there are already very good with tech. where is hong kong tech hiring on the virtual bankside? for user experience, they need local flavor. those roles, people with hong kong backgrounds, they will be in demand. tom: thank you very much. sounds like mandarin skills and virtual banking and you are well set in hong kong. in hong kong for us. coming up, india's retail inflation slowed in july, giving the r.b.i. room to focus on growth. details next. this is bloomberg. ♪
tom: welcome back. a check of the latest business flash headlines. the off-again, on-again cbs-viacom romance has led to a marriage. deal unites the most watched network with the parent of paramount pictures, mtv, and nickelodeon. have 61%holders will of the new company with the remainder going to viacom investors. sherry redstone will be chairwoman with bob bakish as ceo. moody's is warning exxon mobil its credit rating may be lowered as spending balloons and debt piles up. the agency assigned its highest rating of aaa to exons $7 billion offering of senior notes but the rating and stable outlook are under pressure because exxon is outspending
cash flow and its refining and chemical businesses are underperforming. tesla's plunge has made it the most profitable it on wall street. $2.75 billion of mark to market gains in 2019. last year, elon musk attacked what he called value destroyers in order to prepare for "the short burn of the century. tesla remains on pace for its worst annual decline on record. founders featured in the latest episode of bloomberg studio 1.0. and an exclusive interview, they tell how the company partnered their sights have set on becoming southeast asia's super app. >> what i can share about china
are both states regions are looking at southeast asia as huge future potential growth areas. it is not the next five years, but the next few decades. that is the growth we want to help drive and lead and grow for the rest of the country. tom: you can catch bloomberg hongo 1.0 on thursday kong, 9:30 in sydney. david: looking forward to that. great southeast asian growth story. coming down to the open, under 58 minutes to the open in mumbai. we are looking across the region. khanna is with us to weave a sense of direction. na: tomorrow is indian independence day so they will be off or that but don't expect any
fireworks from the session this morning. while the rest of the globe seems more supportive, you could expect a relief rally. -- theay's session almost 300claxton points. the rest of the index looked 180 points. the state would have been a far more worse but it is important to see, looking out to the fund flows and how foreign institution investors come back and. so far, they have not shown confidence in indian equities. earnings have not been picking up come either. -- picking up, either. the currency remains a focal point into the session. david: let's look granular. what stocks are we tracking today? expectations --
will be reporting their numbers today. nothing much to expect in overall numbers but the fundraising activity is catching eyeballs across the board. it talks about raising money in such a market. that is something the market is interested in. the reporting numbers as of yesterday, a decent set of numbers. high realization and stable employment costs added to profitability. these are stocks to watch out for. tom: divina khanna in mumbai. india inflation eased for the first time in six months, giving the r.b.i. more reason to stick with his dovish monetary policy. frommer prices rose 3.15% a year earlier, faster than the median estimate in a bloomberg survey but well below the banks 4% goal. let's bring in our asia economics reporter. what does the indian data tell
us about the rbis position? >> certainly a win for the doves. already a dovish panel on the r.b.i.. this is against the grain of the trend this year. 2018, we saw disinflation take hold and that was challenging when there was a tightening bias in the region. are seeing this year more of an easing bias and easing trend and the pressure to give more stimulus throughout the world, this works more in line with what the rbis position has been. in this report, we saw cheaper oil taking hold, offsetting housing and food prices. one thing we should keep in mind is the food prices are always a big factor. we saw a lower than average monsoon rainfall for july and up until a few weeks ago, hadn't seen the recovery. how the recovery is setting in so that should keep food prices modest going forward.
we could see inflation continuing to miss the 4% medium-term goal and keeping the r.b.i. more dovish. apart from inflation, what else might influence the mindset or framework of central bank over the coming months? michelle: there is a lot, david. inflation has become less of a story as they move toward growth. a lot of other central banks, especially in asia, are looking at trade war at pressures. that is not the case in india. what they do have going on is ongoing troubles in the financial sector front and center and broader growth pressures. we talked about the rural challengesal throughout the monsoon season but also more broadly, gdp hit a five-year low in the first quarter. they've already had four interest-rate cuts this year and now they are facing, watching
the transmission not come through to the banks yet. really trying to see if they can force that forward. in the midst of this, we also have car sales dropping to the lowest levels in two decades. a lot of pressure is coming from different sides and r.b.i. is focused on the growth picture now. tom: michelle, thank you. bloomberg's asia economy reporter in singapore. coming up, a battle for protection in chinese stocks. our reporters go head-to-head, next. this is bloomberg. ♪
it's, perhaps not everyone's segment -- maybe for some of you here. battle of the charts and we have the beijing bureau chief against our cross assets markets editor. tom: and viewers can access their charts on the bloomberg by running the function featured at the bottom of the screen. kicking things off is sharon. >> we have a chart of the chinese yuan against the price of gold. you can see how much gold soared last weekend this week continued. how investors are seeking the haven and as we saw the yuan , we saw the gold rise to
the highest in six years and another gesture of how sensitive it is to the ongoing conflict. we saw gold drop again after the u.s. announced it was going to delay some of those tariffs. at the same time, china is putting more money into gold. it boosted its gold reserves for eight straight months in july. david: all right, joanna. beat that. joanna: i am looking at large cap chinese stocks. if you look at these chart -- this chart, the skew is high. it is expensive to hedge right now because everyone is trying to get protection. one thing wells fargo has recommended is if you think chinese stocks have upside and can go up from here, you can sell the put, bearish options to buy bullish ones because those bearish options are so expensive. if you sell them, you are getting that money.
it is expensive to hedge right now in a lot of places. someplace bank of america sees opportunity is in two-year volatility on the hang seng chinese enterprises index. david: joanna, sharon. but i ams a tough call slightly biased because i am sitting on set with sharon. she is the bureau chief so how can i not award today's win to sharon? there.-interest and accessed by the gold-yuan convergence. the pboc, buying up. sharon is the winner. joanna, i'm sure you will take it next time. joanna'swould go with simply because of the bodyguard. whitney houston, kevin costner was on netflix and i was watching it.
summer birthdays, in case anyone was wondering. it is also battle of the birthdays. gtv go is the function. on,data out of china early missing all three metrics. , retail sales, willn a few minutes we look at that. let's lady with the market reaction on the back of the data. to. 10 year yield pushing 1.67. there is lots more coming up. this is bloomberg. ♪
♪ emily: i'm emily chang in san francisco and this is "bloomberg technology." coming up in the next hour, the shine is back on the apple. shares in the tech giant spike after the u.s. announces it will some a 10% tariff on chinese imports, including the iphone. facebook has allegedly been paying hundreds of outside contractors to transcribe clips of audio from its users.