tv Trending Business Bloomberg January 31, 2016 8:00pm-10:01pm EST
below estimates of the lowest at three and a half years. hbc putting the freeze on hiring and pay, a plan to save $5 billion. they say they want to make significant cost reductions by the end of next year. follow me on twitter. through, aws, coming manufacturing pmi numbers just crossed our table. more detail, here is the bond. even: they came out earlier than expected. it looks like it was another miss for january on the china pmi. the factory gauge at 49.4, the survey was for 49.6. as you mentioned, it is the lowest level we have seen, dating back to august of 2012. this marks the six straight months after contraction that we have seen. in the china factory sector. this is after we saw back in contracted 49.7
, on the non-manufacturing side, we have seen things edged down slightly after we saw quite a big number in december, the highest number we had seen in a year. now, on the nonmanufacturing side, at 53.5. for the month of january. take a look at the manufacturing side. economists they don't get too obsessed with these incremental changes in the index, because we continue to see the policy support has been accommodative, and has stabilize the sector. but not enough at this point to really trigger some stronger activity on the manufacturing friends. but, we suspect the policy will stay in stimulus mode this year. the balance now will shift from monetary to fiscal for 2016. we also saw that metal prices remain extremely depressed. i think we are on some of the historic lows. toly signs, pointing
somewhere between stability versus fractional slowdown. when it comes to nonmanufacturing sector, the critical point was, whether service or strength would offset the weakness we see in the manufacturing sector. this remains the case. we will also be breaking the manufacturing data coming out in 45 minutes. they thing to watch here, services pmi versus the other services. in part, we have inclusion the construction sector now in those national bureau statistic figures which did benefit from higher infrastructure spending. we will continue to see this and we will break those in about 45 minutes. of course, getting a reaction to all this, we have the -- we will revisit this story later. we want your opinion. we did get some numbers from
taipei. malaysia, has a federal holiday. what a start to the first day of the month. david: it is an extension of always on friday. to tie everything together. there was a lot of pressure on the bmg. economy grinding to a halt. china was slowing down. we got confirmation of that, -- there's ans is reaction. above $.70 at the moment. demand of more materials from australia. you tie this and together with the export numbers out of south korea, 18% collapse. 20% collapse in imports. it means less need for things like capitals and high-tech exports. also, same story in japan.
levels we are approaching the to your three-year low. all the data points that we are getting so far this morning, with the exception of the inflation rate out of australia, really reinforces the narrative that central banks are in need to support the economy, because we are not firing on all cylinders. equities are on the way up. oil is also holding onto gains. as is gold. the other market story for the day, these bond yields over in japan. seven points. we are down to 3.5 today. record lows, suffice it to say. the u.s. was up a little bit, but we are now coming back by about one or two basis points. when 91, the lowest level when ugly back to april of last year. south korean below 2%. 198 is the level.
it will be interesting to watch when the -- comes out with a dollar you want fixing a few minutes from now. surprised if you see a relatively sharper adjustment there given of course the move in the currency since friday. rishaad: let's look at sony. it is having its strongest rally in seven years. up.okyo, shares are better than expected earnings. where was sony actually the strongest in all this? it was a fantastic quarter for sony music and movie businesses. the new james bond movie is number four in north america and of course, there is the a dell recrd -- a dell -- adele ord. and playstation will continue to drive sales even though
smartphones took a hit. there going on sale by june of this year. rishaad: thank you for that. let's have a look now at another lender out there, which is seeking financial help. ry.h that story, here is she shery: they plan to freeze pay and hiring. they hope that this would cut as much as $5 billion in costs by the end of 2017. these actions were outlined in a memorandum received by employees on friday, and they follow a three-year restructuring plan announced back in june. the bank now joins the ranks of european lenders that have announced cost-cutting measures in the last few months. including thousands of job cuts. sources last month said that barclays plans to eliminate 1200
jobs worldwide and shall security operations across asia. european investment banks have been hurt by slumping revenues, tougher financial regulations, and rising costs tied to compliance. europe's says that banks will probably see profit wiped out by restructuring costs in the fourth quarter. motorists says it will suspend production at all is simply plants in japan next week. this comes after an explosion last month at one of its group companies's steel factories. it will begin next monday and will not affect production outside of japan. toyota was making 14,000 cars per day in japan, as it has began production and it relies on the domestic market for more than 40% of its annual production. last month, ig steele said an explosion occurred at the beginning of the year damaging the furnace and the ceiling of the plants.
airline isgest expanding its fleet. ana says it plans to buy three airbus 380 superjumbo's to work on overseas routes as it expands its international network. the carrier will use the planes on tokyo-honolulu flights after getting the planes during the fiscal year, starting april of 2018. billion, but1.3 that is before the discount usually given by playmakers. ana is adding international routes including sydney after japan received a record number of visitors last year. the airline is also focusing on its international network and the shrieking population and competition from japan's bullet trains limits growth, domestically. website, look at the falling price of oil might hurt more than help.
♪ rishaad: china's main factory gauge down for a six-month extending a record stretch of contractions. coming in at 49.4. let's have a look at these numbers in a bit more detail. julia wang is with us. on first glance, no big surprise, a bit weaker than expected, but it does show the continuing trend of china's old
economy really struggling. julia: that is true. i think we know that this is the biggest risk for china's economy this year, and certainly, where the pressure is the greatest is in the manufacturing sector. grew 0% in 2015. rishaad: if you look at the industrial profit numbers, it is in recession, technically. julia: deflation is 6% year-over-year. that is where the pressure is greatest for the manufacturing sector. to some extent, this is being offset by resilient services sectors, but not sufficiently so. rishaad: if we look at manufacturing and not not manufacturing pmi is 53.5. it is becoming a bigger part of the economy than manufacturing. maybe we should be paying more attention to the good news as a sort -- opposed to the poor news. but the think we should
two together to get a holistic view of how the economy is doing. on that front, if you look at the q4 number which came out a couple of weeks ago, that suggest that the economy is now at the weakest points as the global financial crisis in 2009. so, not as bad as manufacturing gauge would suggest, but the resilience of the services sector was not enough to offset the drag from the industrial front. rishaad: what happens next? how long does this go on for? we expect solid reform ideas. we always talk about this ahead of these congresses, but very little action. i guess people do not want to see mass job losses. julia: reform is very tricky. on one hand, i think the government should put -- push ahead quicker with the promise of restructuring and with over capacities. they should move faster. actually, the faster they move on this front, the more freeze their hands to actually make money and fiscal policy more accommodating, so i do think that -- rishaad: it's a bit nervous,
isn't it, the whole reform process. it is very slow. julia: it is very tricky. at this point in time, i think where it is most needed, is actually to come up with a more confidence of growth-focus strategy that is clearly communicated to the public and plus the financial markets suggest that it knows the market concerns and the growth slowdown on deflation. you can use this policy is ammunition to stabilize growth. monetary and fiscal policies are all very viable. rishaad: also looking ahead to -- that normally shows manufacturing being a bit worse than this number, the official number does. julia: it is more closely tracking the exports performance 2015e economy, which in has really been slowing very quickly. that is a reflection of weakness. not necessarily problems with china, more of a reflection of
how demand efficiency is really hurting the global economy at this point in time. rishaad: what are the strains and stress since -- in stresses on the yuan? flexibility more will make it easier for the group to deliver. i do think this is a viable option. right now, for to be nondisruptive to growth may be quite tricky. it is not really the answer to the economic problem that we have in china. it probably helps that the margin, but it is not really the solution. the solution is really more fiscal commitments to turning around the housing market, more infrastructure and investments and more tax cuts to the corporate sector. rishaad: we are just getting the new reference rates for the yuan. 6.5 339 against the u.s. dollar. not a huge change. it does tell us a little bit about this gradual weakness that we have seen, this gradual depreciation taking place in the r&b. julia: certainly, i think the
policymakers want to gauge on r&b more flexibly. the real pressure that is pushing the r&b weaker is actually the market and the market is expecting growth to slow further. they expect that is inevitable that they will have to move monetary policy further. containaction trying to , but does it really want to contain so much that it will return the r&b to a dollar? i don't really think so. ifhaad: with that in mind, we do see gradual weakness, it is really helping the old economy which perhaps is something that would mask all of the problems that it has? julia: it has to be delivered in a very, very delicate way. because of how much concern there is about the chinese economy in the global market. it is very easy for this to generate a lot of volatility. if that happens, that is actually not great for the economy. thisis why we argue that
is something, perhaps, that is competent three as a policy option, but it is not really the option atal policy this point in time. it is far easier and more realistic for them to focus on fiscal policy expansion which gives the central government balance sheet the ability to turn around the housing market. they could cut taxes and charters quite substantially cut which could result in anywhere between $1 trillion and two dollars -- $2 trillion. they can also settle infrastructures and investments, as well. rishaad: thank you so much. other stories making headlines around the world. blamed for is being the crash of a trans-asia plane in taiwan, 18 months ago. the asian authorities say that if -- fatigue and failure to follow safety procedures led to
the crash which killed 40 people. thenvestigation says that plane was too low and the captain was probably overconfidence and the first officer did not correct him. seven months later, another trans-asia plane crashes in taipei after the wrong engine was shut down. close warship has sailed to an island claimed by china, saying that it was in operation intended to support navigation. passed within 12 miles of the islands, part of the partial chain that is also claims by vietnam and taiwan. the pentagon says that the u.s. would sail anywhere internationally law allows. beijing says that the move was unprofessional, your response will, and a deliberate provocation. the annual lunar new year travel rush is underway with almost 3 billion trips expected in china, alone. train and bus stations were packed over the weekend where
the transport ministry forecasting peak travel around the start of the year of the monkey, next week. this year's push may be a little less than usable -- usual because of the slowing economy. two years ago, they saw 3.5 billion trips in china. powered by over 2400 journalists in 150 bureaus around the world, this is bloomberg news, i'm shery ahn. rishaad: next, more bad headlines from malaysia's troubled one in bb funds. what they say, billions of dollars has been misappropriated. if the details coming in next. ♪
that about $4 billion may have been misappropriated. prosecutors in e-cig and further information from malaysia. hopefully they cleared out some of the suspicions around it. what have the swiss accused here? >> authorities issued a statement saying that they revealed serious indications of about $4 billion may have been misappropriated from companies in malaysia. the state knows quite long but he did say that the four cases came to light involving allegations of criminal conduct between 2009-2013. and a small amount of funds made been transferred into the bank accounts of former malaysian public officials. this was attorney general asked malaysia for legal assistance saying, today, the malaysian companies have made a -- comment on the losses that have incurred. the malaysian prime minister who heads up the advisory board -- rishaad: and there have been
corruption charges. last week, i believe. >> they continued a statement from authority saying that the object of the request for mutual assistance is therefore to advise the company and the malaysian government on the results of this was criminal proceedings with the aim of finding out whether losses on this scale have been sustained. basically, they want to find out what has been going on with these companies and where has this money gone, if it has gone anywhere. 1mdb say they have not been contacted by any foreign legal authority, but the malaysian authorities, the attorney general did say that it will cooperate with this kind of -- and you the findings before deciding what to do. swiss authorities have been looking into this and august and basically, due to suspicious activities noted by the swiss financial intelligence unit. rishaad: thank you, rosalind. more the storage of the course the program. during the event will be
covering in the days ahead. the reservepacific, bank of australia making its next interest rate decision on the second of february. tuesday. signaling a willingness to ease required,f indeed they'll be looking closely at the january market route. the market turmoil, and indeed, oil price declines. one of 26 economists we have spoken to -- do not forget that it is at a record low. it stands at 2%. slowing consumer demand in china, it may be weighing on technology companies around the world. lenovo is hoping to increase its global footprint and hope that that will save it from the worst of the slump out there. they are expecting to return to profit on wednesday. they had a $700 million loss in the previous quarter, and it is expected to
be about $292 million, hopefully back in the black for them. thursday, the formal signing of president barack obama's landmark trade project, we have 12 countries gathering in auckland to launch that transpacific partnership, or tpp. the agreement was clenched back in october, after seven years of negotiations. tpp aiming to lower tariffs and introduce a mechanism to resolve cross-border does its. friday, we'll be finding out if japan's price cuts and many offerings are paying off. it is out with its latest results, it has been on a losing streak, reporting quarterly losses since may 2014. they are struggling to recover from a food contamination scandal and the report comes as the american parent is selling a stake in that particular lossmaking division. time for a panel of three, topping the weekend box office in north america. beating disney, and "50 shades
♪ rishaad: a look at our top stories, stock starting the amount higher. doj decision got to go negative sparks global rally. tokyo by 1%. hong kong, also set to open to the upside. oil declining after capping a second weekly gain. continuing speculation that opec and russia may discuss production cuts. china's official gauge signaling a six-month contraction. service index continues to show expansion. manufacturing and pmi falling to
49.4 in january for the longest stretch of readings below 50 on record. edgingfacturing, at pmi down to 53.5 last month from a 16 month high in december. sony shares surging the most in the year on the back of better than results. to almost a billion dollars. was driving a? bond", and to the adele albin. playstation, expecting highest annual profit in a years. shanghai just started off treating session in the red. here is how the hong kong kicks off the month. at weakness inng the shanghai composite. you put everything together, we are still seeing gains. obviously, coming off of the highs. australia up as much as 1%.
inflation in australia, then the collapse in exports and south korea. pmi coming out of china, really puts the move from the boj into context. there was a lot of pressure for them to move. they do not have a media schedule this month, the next one is in march, when the other is expected to fall because of what the boj did. equity markets are mixed, mostly still higher. sorry, the bond markets. have a look at the bond yields. across japan. from friday, the five year yields are already falling into the negative. we are actually pushing more below zero, approaching -.1. to your gigi's, roughly the same amounts. we have never seen deals this low. record lows here, obviously at the boj, trying to push down borrowing costs, but will the banks really getting courage to lend? and you talk about japan,
arguments, another topic altogether, but when you have a structural problem like japan which actually pulls down the left,ate demand to the they have the incentive there. dollar-yen, 121.14 is your level. we are seeing weakness across --. they may need to step in and act. 11207 is south korea. the pmi data came out of china, 17.57, u.s. cents. equities obviously on the way up, but you have some of these other metrics showing that perhaps the rally may be saving a lot of it over the past 50 minutes. -- 15 minutes. rishaad: myanmar enters a new era today when i lament -- one parliaments -- terminating
proceedings after landslide victory. here's a look at all this. she can't be presidents, but do we know who it will be, or is? >> know, we don't. it seems to be an example about how she really is trying to and succeeding in controlling the whole situation. she is going to be a very controlling force behind whoever is named president. we know that she said that that will be the case. probably by the middle of this month, certainly by the end of this month, we should get the thes put forward where candidates to be president, but we still do not have them. president,e current will have to step down at the end of february and the beginning of march. there he is, walking with a lady right now. the other thing that we do not know, is the ministry lineup, so we of the first of parliaments by herll be dominated
party which just one the landslide in the vote. we do not know who any of the ministry our candidates will be, a names that come up, she shoots down. once again, very controlling. one thing we do know, she is trying to be inclusive because if you look at the candidates for the speakers of the two houses, there are four speaker and deputy speakers for both froms, she has chosen two her own party. and she has chosen one from one of the minority parties and one from one of the military-backed parties. you get an idea of inclusiveness, at least. rishaad: we do not know very much about how the ministries are going to be populated. we don't know very much about policy, do we? david: nothing further than we had during the election campaign. we know that they want to widen the tax base, but we do not have a will do it. they want to improve education, not quite sure what the policies
are going to be. we know they want to increase foreign directive investment. we are not quite sure exactly what areas they will be focusing on. once again, until we know the ministry candidates are, and that is up and running, we will not anymore clarity on how she is going to prioritize policy. rishaad: what about the military? i do not think they will be wallflowers and put into the shadows. david: this is the other difficulty that she will have. the military is specifically put into the constitution a clause that keeps her out because of the nationality of her children. when she says that she is going to be pulling -- pulling the levers, she has to be careful about how she does that. it is possible the military might at some stage of the do not agree with how she is managing the country, might at some stage all that constitutional thing on her and say, you are not supposed to be pulling the levers. this is up to the president.
which is why, for her, the choice of president is going to be so key. rishaad: she says she will be above the presidency. thank you so much, david. let's check in on some other stories. the mccain is reporting that the hassonic nine-month profit risen 5% coming in at $2.5 billion. asia,across southeast also playing a role as you would expect. checking on the shares, this is what we have. we have the carmaker missing estimates, but in the rising market, is up about 8/10 of 1% costs linkedrecall to their backs. they are recalling more than 20 million vehicles around the world. honda announced $1 million in the third quarter. a maintains the for your profit forecast of $4.3 billion. the oil slump is giving tokyo
electric a boost, operating profit more than quadrupled to around $649. due to lower energy costs. cleanup costs at the cooker shema nuclear plants, power usage has hit an 18 year low, but cheap fuel may help the rival report biggest annual net income in a decades. let's have a look at sharp, it will decide which rescuers it will accept. ofsays he is confident winning the day, but he faces competition from a japanese government-backed funds. let's have a look at this race and find out more. we go over to tim. terrycloth is pretty constant, he has the highest bid in. tim: he is confident that the government will not get involved and will actually kind of way up
the two offers on the merit. that is wishful thinking because of course, inc. j has pretty compelling option for sharp and the board of directors. the compelling part is the japanese. terry gore thinks that it will be weighed on the merits and if so, his offer is a better offer. that is what he is thinking. rishaad: he would say that, when he? what does he get out of it? the idea -- this is been going on for four years. he made an attempt by 10% of sharp four years ago, for what was a pretty good price. he cannot even manage to get the 10% stake now down. so, four years later, he is going for the whole thing. the idea is that he wants to get access to some of the display technology, some of the module and component technology that sharp is very good at. overall, the things that the
company has great products and great ideas, and pretty good automation and so on. he really sees that the japanese and the taiwanese should be booking a together to take on the korean. he is said that taiwan and japan are very good fit and of course korea is basically the major competitor, samsung, as a competitor. he wants to both the powerhouse. rishaad: what are people saying about whether this is a good idea, if at all? tim: it's a terrible idea, to be honest. he is looking to pay a lot of money to take over all of sharp, and with him of the good stuff that he's going to get out of it, he is going to get a lot of other deadwood. that is the reality. foxconn is not in the branding business and it will never be in the brandy business because that would be putting them against apple and sony in all of these other branded clients. in buying sharp, he gets there brenda business as well. if he does take it on, he would have to spin it off again
anyway. if you look at the history of foxconn day begins, the biggest up to date is --. a couple of lcd companies. since then, five years ago, on a basis, you have made. the biggest deal that terry gore has done today is actually not profitable for him. it is hard to see that he will make it for sharp. it is a very big issue for him, all about faith. he really wants to get this done. he offering a lot of money to get it done. rishaad: thank you. let's show you what we have coming up with china's gdp advancing less than 7% last year. we will year from ihs chief agent economist when "trending business" returns. ♪
around the world. a triple bombing claimed by the so-called islamic state has killed at least 47 people in damascus. just as syrian peace talks begin in geneva. a car bomb exploded at a bus suburb, tohia suicide attackers blew themselves up as rescue workers arrived. the unp summit has had a rocky start. only agreed to take part at the last minute. you and special envoy says he will meet with two side separately later today. japan's motor is on alert and the defense ministry has installed missiles at the tender headquarters after north korea may be planning a long-range rocket test. japanese, korean, and u.s. officials say they have seen activity at a ballistic missile test site consistent with previous launches. it is less than a month since north korea detonated what it said was a hydrogen bomb in what was its fourth nuclear test. councilg's legislator has approved next is $700 million for a bridge linking the
city with macau on the chinese mainland. hong kong's trying to be to the project is now around $4.3 billion. construction of the 42 kilometer bridge and tunnel project began in 2009 and has been plagued by delays and cost overruns. it was due to be completed this year, but when chinese official says that even 2020 may not be realistic. over 2400 journalists and 150 bureaus around the world, this is bloomberg news. rishaad: let's have a look at the yuan. china is falling short in its efforts to starve offshore speculators. is robin. we look at the yuan. hong kong, the highball rate. at a normal level. the initial is, rush that we saw earlier this 66%, the kind of panic,
overnight borrowing costs, that was done because the previous market but every single available driver. the thing is, they cannot continue this for the long term. you cannot come into the market, drive a borrowing costs to ridiculous levels. is, the rates have now fallen back to levels we have seen earlier this year, it like at the start of the year. is, is the pboc done intervening in the market? hasn't succeeded in weeding out yuan speculators? the answer probably is, for now. for the short-term, because this cannot carry on in the long-term. rishaad: we discussed breaking news. n.nufacturing from the caixi here's the official numbers.
let's go to yuan. >> we are seeing a beat when it comes to the caixin manufacturing numbers, coming in at 48.4, slightly higher than the 48.1 which was predicted. and an improvement from the month of december of 48.2. we are seeing that the manufacturing side, when it comes to these numbers, we are still continuing the momentum that we saw. we did see quite a bit of a pickup in december. more than a year rise. the number was a 13-60 month high back in december. we are continuing that growth. i should say, below contractions. below expansion, but at contraction, i should say. 48.4, we are still waiting for the services pmi, but we just broke those official pmi numbers at the top of the hour. we are seeing the longest losing streak on record from reported
data at 49.4 for the state figures. a sixth straight month of contraction and people are starting -- economists are starting to say that this policy support is not doing enough to really offset that weakness. we will continue to see and break those pmi services numbers from the figures coming up pretty soon. it's all part of this light of economic data coming our way through the course of this week, with a focus on what eve on was talking about. factory gauges. let's talk to rajiv biswas. what is your reaction to this? we have slightly stronger than expected private numbers and slightly weaker than expected ones from the official data? picture think the basic is still unchanged. which is that china is a two speed economy, the manufacturing sector is going through tremendous stress. you are still seeing readings that indicate contraction or
slowing. of pace of growth and industrial production. that is the story throughout 2015. i think we will see that in 2016, because manufacturing is facing a lot of headwinds through the restructuring, heavy industry, such as steel, cement, shipbuilding, operating with such a high level of unused capacity, and we saw only last week that the chinese government is announcing very large reductions in still capacity over the next couple of years. a similar picture and other areas with heavy manufacturing. meanwhile, light manufacturing is using competitiveness due to relatively high wage costs. such as low-cost assembly electronics. they are shifting to countries like vietnam, bangladesh. on the other hand, services are doing relatively well. because consumer demand is driving up growth in key areas of services. so, it is a two speed economy.
i think the pmi readings that we are seeing continued to show that picture. rishaad: what about if you put manufacturing and nonmanufacturing together, what kind of a picture would we get? i know this is the to speed economy you are referring to, but what you can get if you combine the two measures? rajiv: basically we are looking at an economy that is growing at around 6.5% growth momentum. manufacturing is weak. slowing down, still, because there is so much consolidation and restructuring that is needed, and there will be millions of job losses in low-cost manufacturing and heavy industry over the next two years. on the other hand, the services sector growth has been void by quite strong growth in consumer demand. many sectors of services are showing quite rapid growth, such as financial services, health care, retail sales, e-commerce, all of these are going quite
well. that is grading millions of new jobs, so on balance, the economy is still showing positive momentum in the order of about 6.5% growth. but it is going through tremendous pain and restructuring. the export sector has been very weak in the last six months or so. we have seen negative growth and exports, so again, the role of china in terms of low-cost -- rishaad: i wanted -- we have a lot to get through. let's talk about this week and some of the other key points. it is a really, really very busy time it comes interest-rate monetary policy. we have australia, india, sri lanka, thailand, all with their interest rate decisions. a quick word on them? if we talk about australia, it has been surprisingly strong in terms of the labor market. over the last year, there has actually been quite strong job growth of about 300,000 jobs added over the next 12 months. unemployment rates, coming down
a bit, to about 5.8%. at the moment, the rba is probably happy to stay on hold, because the week austrian dollar is doing their job for them. and they probably want to keep some ammunition given that rates are only 2%. policy rates are at 2%, so they want to keep some ammunition because they are still facing a lot of headwinds and australia from we commodities, the iron ore sectors have a lot of problems. and engineering and construction is going to be very weak over the next two years. because pretty much all of the large-scale commodity projects that have been built will reach completion by 2017. so they probably content to stay on hold, given the labor markets still looking pretty good at the moment. india, they're probably also going to want his day on hold at the moment, although the cpi rate is actually a bit below where the governor wants it to be.
cpi is it about 5.6%. 's threshold isrs about 6%. there's not too much comfort in that number. you probably be content to sit on hold at the moment. and watch to see what happens in the federal budget, which comes out at the end of february. and see how inflation develops. if he gets a bit more headroom due to falling global oil prices, that probably will give him room to cut again later this year, because i think the indian economy has been showing a lot of headwinds from weak exports and the momentum is not as strong. there probably is room for a rates cut in india later this year. rishaad: rajiv biswas great talking to you. we have sri lanka and thailand out with their monetary policy. up next, in china, getting a ticket home for the new year is
♪ rishaad: "trending business" this is coming live from hong kong. streaming on bloomberg.com. the new year and next week may not be the boom for hong kong that it has been. according to the numbers and the relative strength of the local dollar, at the retailers under increasing pressure. let's bring in bloomberg news first word catherine. retailerxury goods doing the worst? >> certainly the watch and jewelry makers are going to continue to be the hardest hit. ciao tie has artie come out and said that they are going to have challenging sales for investors.
other names to continue to watch would be look book and empire watch. might hearing that this be a slowdown across consumer discretionary spending. maybe declining sales in apparel, electronics, cosmetics, maybe a little bit broader than we have seen. corruption, crackdown in china, but it could be structural, couldn't? is very recognition by a retailer about that? how are they coping? catherine: we are getting there. we will start to see more consolidation, more stores closing. right now as you walk in the streets, there on the sidewalks bacon you to come into the stores. with the price of real estate in the city, that cannot last, we will need to see more consolidation, this will not be something they can sustain. rishaad: it is a long-term effect. catherine: i think that for the retailers, luckily chinese new
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extending friday's rally. foxconn is talking to potential suitors. they do not expect the government to interfere. follow me on twitter. do not forget to include the hashtag "trending business." at gains and losses when it comes to china. david inglis with all that. we started with a little gain in the hang seng. over the past 15 minutes, the overall story in the market speaking,generally you have gold prices on the way up. at the other end of the spectrum, emerging-market
currencies, and cyclical and oil,es like copper all on the way down. the short of it is we have had a series of data points today against the backdrop of the boj instituting negative rates on friday. from australia to south korea to the picture is the economies are slowing down. when you look at the markets, it is central bank-driven. boe. week, you have the later on tonight, you have mr. draghi speaking for the annual report. midweek, you have kurota speaking in tokyo. are scheduled
after that. dollar, 17.61. let me show you what is happening when it comes to sovereign bonds. there with me here. u.s. 10 year yields, down 15% over the past month or so. have a look at the japanese 10 year. six or seven basis points. friday taking us to a record low. signal they are pushing. market analysts are saying do not pay attention to the actual number.
the boj is ready to add to this if it is necessary to do so. those are the markets monday. , factorylatest data data in china, signals record deterioration for six straight months of contraction. the services sector is holding up, at least. let's look at numbers out of the private pmi measure. let's find out more with yvonne. pmi data is showing growth on the factory floor is losing momentum after a pickup in december. now, there are some signs pointing to stabilization at the end of 2015 that could not be sustained for 2016. pmi, 49.4. it missed on expectations, edging down from december, 49.7.
we continue to see an extension of this losing streak, contraction on the factory floor. remaining below 50 the longest streak, six straight months. the longest on reported record. pmi did see some resilience in january, but still edging down 49.4. we see the services sector remaining strong, boosting employment. there are signs it may not be ready to offset the weakness we see in chinese manufacturing pmi. decelerated, which also points to weakening domestic demand for the first week of 2016.
it also signals concerns from the foreign side, external demand. south korean exports tend to move closely in line. , year on year8.5% for january, following a 14% decline in decber. manufacturing is facing challenges in 2016. the government is trying to ,educe the industrial capacity excess capacity, as well as zombie companies surviving on bank loans and government subsidies. we did see, in terms of the rose todustry, that 40.7 from 40.6, but far below the 50 threshold. we saw metal prices drop after a rebound in december. this is a seasonal effect as chinese new year falls in february this year. a lot of companies trying to
frontload orders ahead of that time. rishaad: thank you. we will have a more detailed look throughout the course of the show. do tweet us your thoughts. three things having a fly when it comes to trading. sony is surging the most in seven years after reporting better than expected process. spectre helped their net income, rising to $989 million in december, beating estimates. earnings coming from music and movies. 25 was record-breaking. it helped offset a slump in smartphone sales.
me division also sold more playstation 4 console titles. ins --creased project projections for games and cut expectations for the unit that produces image sensors. another company in japan, toyota motors, will suspend production at all assembly plants next week after an explosion last month at one of the steel factories. begin next monday and will not affect production outside japan. toyota was making 14,000 cars per day in japan and relies on the domestic market for more than 40% of annual production. explosion, an occurred at the beginning of the year, imaging a furnace at the plant.
some parts ofed exports and suspended over time in the wake of the incident. barclays and credit squeeze have haved to settle -- suisse agreed to settle allegations of mismanaging tribe it trading platforms -- private trading platforms. barclays admits to violating security laws. will pay $84 million but is not expected to admit wrongdoing. the dispute is centered on whether the banks disclosed enough to their clients. u.s. authorities say barclays misrepresented to clients how it monitors high-frequency trading. systematically routed orders to its own dark , but insists it did not prioritize one trading venue over another. agc is joining the
ranks of european lenders that have an violence -- announced cost-cutting measures. hsbc will cut jobs and , about $5 billion worth of costs, by the end of next year. gulliver is in a push to tighten the business and cut costs. there was a three-year plan to shut money-losing businesses. they're looking at 10% of the jobs, 22,000 to 25,000. it sold positions in brazil and is trying to sell businesses in turkey. people familiar with the markets told bloomberg it is reviewing markets in lebanon and closed its private banking business in
india. hsbc is not the only bank looking to cut jobs. deustche are and cutting as well after the increasing cost of compliance. back to you. rishaad: we are looking at a pop-up test chinese travelers are facing as they get ready to celebrate the lunar new year. have a look at bloomberg.com/as ia. up, talking about china's challenges when it comes to controlling the yuan. commodities have made gains in january. we will talk right after this. ♪
longest run of games this year as nigeria boosted opec's production to 33 million barrels a day. iran is adding 60,000. let's get an outlook on commodities with our chief investment officer at edge alliance securities. let's start off with oil. we are talking $35 a barrel. we were down to $27. are we kind of basing out and trading sideways? what happens? >> good morning. there is a lot of volatility. today, down 1%. at the end of the day, it is trying to follow a base. i get encouraged by daily consumption. in my mind, that continues to be
study. if anything, the dips are well supported. with consumption, even though we are seeing weak economies, with consumption high, america is trying to find a low. rishaad: indeed, but how much of it is fundamentals? >> the velocity of the rally we saw was a lot of hot money moving out in the short-term. it will be interesting to see in the next couple of trading sessions what occurs. we had good ideas about what was happening with opec and russia, trying to look at their supply and cut production, that sort of thing. that seems to have faded as well. in the wake of all these things, probably expect to see more weakness in the commodity. it will be interesting to see when it hits the background of $30.
the downside support is pretty solid. rishaad: there will be quite a few people saying that when we wouldmove like this, we expect oil to remain in a trading range that is quite low for months or years. what is your view? >> i think at the moment, they cannot slow down, cannot stay down at these levels for much longer. inare seeing cracks appear some of the opec countries. see moreng, you will from opec if the prices remain around the $30 area. when you look at what is happening in saudi arabia, in terms of the increase in petrol and energy, it suggests that, if saudi arabia is hurting with the otherints of oil, some producers are as well.
i expect more talk from opec if prices remain at these levels. rishaad: weakness on the dollar, looking ahead -- will that help the oil price? the reason i talk about weakness when it comes to the dollar is, in golde this bounce continue and a negative relationship with the dollar process. >> i think you find that commodities will turn around as a result of a weaker dollar. it is interesting to hear what the fed had to say about the and how of the dollar that is part of the equation that is not right. when you look at the index, 98 or 100, i would expect some weakness to come into play overtime which will support the rallies we are seeing in gold and also support some of the commodities as well.
the market may turnaround from a buyers market to a sellers market. we just have to see if that occurs. rishaad: you brought up commodities. let's talk about base metals. iron ore and copper. we had the managing figures out of china. australia was hit the most by those. sustained weakness. what happens? it was not a very strong number today out of china. no doubt about it. one of the interesting things is the continued stimulus china has been pouring into the market and how that filters down to demand, particularly for australia. when you look at the numbers, you can see that china continues to import massive amounts of iron ore. that means record levels of copper. at the end of the day, with the
stimulus out of china, it is translating to more demand for commodities. the more we see out of china, the better the industrials will actually look. to me, it is a good time to buy into that sector. rishaad: jonathan, great talking to you. jonathan barratt in sydney. is beinglot error blamed for the crash of a trans-asia plane in taiwan 18 months ago. fatigue and ay failure to follow safety procedures led to the crash which killed 40 people. they say the plane was too low and the first officer did not correct the pilot. 17 months later, another trans-asia plane crashed in taipei after the wrong engine was shut down. close warship has sailed
to an island claimed by china, saying it was in operation to support freedom of navigation. it passed within 12 miles of triton island, part of a chain also claimed by vietnam and taiwan. beijing said the move was unprofessional, irresponsible, and a deliberate provocation. the annual lunar new year travel rush is underway with almost 3 billion trips expected in china. train and bus stations were packed for the weekend, with the trouble ministry forecasting peak travel next week. this year's rush may be less busy than usual because of the slowing economy. the spring festival two years ago saw 3.5 billion trips in china. 4500 journalists
♪ rishaad: you are watching "trending business." the investors in the u.s. will have plenty to digest this week economic data and another round of earning reports. su keenan has more. su: the week ahead on wall street has investors starting afresh after the worst january in history. of continuing parade
earnings reports has been stronger than expected, and the first nominating contest in the presidential campaign. monday night, we will learn which candidates are out in front as iowa holds its first caucuses. along with the economic reports hitting the tape, labor remains a top concern. a bloomberg survey of economists shows employers in the u.s. likely took on fewer workers in january than the month earlier. the unemployment rate is expected to hold at 5%. , u.s. personal oled in december, and manufacturing contracted for a third straight month. are among thell companies that will hit us with numbers in the coming weeks. su keenan, bloomberg news. has confirmed it
is talking to potential suitors. foxconn is confident of winning the race, but faces competition from a japanese backer. we are looking at the most important stories of the day. tim, why are they so confident here? >> it is really simple. he thinks he is putting in the best bid. that is what he is putting forward, in a nutshell. they are offering more money, and that is what it comes down to. rishaad: it is not the first time he has looked at this company, that is for certain. >> you are right. it has been going on for four years. in 2012, he offered a chunk of money for 9.8%. it was a big premium at the time. it really grew the stock.
he has not been able to nail down the deal. sharp has been talking and talking. there have been concerns. four years later, he is going for the whole thing 100%. what he hopes to get out of it is access to he thinks is sharp's wonderful technology. they have wonderful display technology. he also has a brand name behind it. sharp is a brand name, but that is not terry gou's area. that would put him in competition with apple and sony and so forth. theoverall, he thinks that taiwanese and japanese should combine to take on the koreans. he mentioned that by name. samsung is their biggest competitor. he thinks putting the two together could be good synergy. he thinks that is why foxconn
should help by sharp and help sharp turnaround. rishaad: you told me earlier it was not a good idea. why? >> sharp is losing a lot of money. the biggest areas are things like lcd's. that is a terrible business to be in and will not turnaround anytime soon. notebook and pc sales are not great. they are a big consumer of lcd panels. u has his own plans in taiwan and has the capacity. sharp's technology, well fantastic four years ago, is not the best thing right now. thank you, tim. before we go to break, let's talk movies. 3" topping the box office in north america,
contraction. that is the longest stretch of readings below 50 on record. the private gauge came in at 48.4. month after aast 16 month high in december. sharpe is in talks with foxconn a turnaround, but no decision has been reached. terry gou is expected to make a bid at $5.4 billion. ink-j would keep technology in japan. japan's market is closing for lunch breaks. a bit mixed. japan on one side and the rest of the chinese markets on the other. i will show you why. before that, let me get you an update.
have a look at these yields. the 10 year is approaching negative at the moment. whether or not we get there, i do not know. now, -.1 for the two-year. going further down the curve, we are at 1% on the 20 as well. in japan, a few big-league movers. here are some stories, for example. and earnings story. billion, above the prior forecast. story.lso and earnings they are projecting a dividend for the full year.
tokuyama, that is down about 24%. the company expects a full-year ¥103 billion. that is mostly down to impairment. we will be talking about chinese pmi in a moment. below 50. the reason i have these three threeis these are the chinese industrial companies that have issued profit warnings or a substantial decrease in full-year profits. now, e are seeing right copper, that is roughly an 80% drop in full-year profits. tois abstract when it comes the concept of pmi, but when it
starts to show up in financial results, it is getting crazy. om lion and faw cars that have also said profits will tank in 2016. this is really showing up in results. back to you. rishaad: latest data out of china's factory floor is signaling a record streak of deterioration, six straight months of contraction. services continue to hold up. eve on is looking at the private pmi measures for us. biswas was saying this is just confirmation. they broke momentum in terms of manufacturing at the end of the year last year. that is losing steam.
the pickup we saw in december may have just been temporary. it points to the need for policymakers to really ramp up growth support measures even more. even barclays expecting for 2016 out of policy makers, not sufficient enough to support the downward trend in manufacturing. 6% for china. pmi, 49.4, was below estimates. sixth straight month of contraction. we have not seen a streak like this ever out of china. we saw output decelerate. that is signaling weaker externaldemand, even foreign demand seen contraction at a faster pace. beat, but we are still seeing 11 straight months below the 50 contraction line. manufacturing continuing to show resilience.
employment's, and still pointing to an expansion in services. rishaad: manufacturing is really taking a hit from many different sides. what does it do, if we take it in aggregate? what does it do for its plans to become the biggest world economy? yvonne: it will be much tougher for them to catch up with the u.s.. look at 2015 at how much gdp output was added to the economies. for the first time in more than a decade, that gap has widened. the u.s. adding $590 billion to its gdp in 2015. china, $439 billion expansion. but take a look at the race to the top, how it has progressed. for the first time since 2006, the gap has widened. china will have a tougher time closing the gap as they move forward.
china, 6.9%, weakest growth they have seen in 25 years. rishaad: thank you very much for that. we will have a look at what is going on with the yuan. there are some he reasons we are seeing depreciation for the chinese currency. us, robin is here with me now. they are back to borrowing at "normal" levels. tell me about these normal levels. ago, we sawweeks flex its muscles and tell speculators that we can't and will hurt you at some point. -- can and will hurt you at some
point. this was pre-january crisis levels. some word speculating that the pboc got rid of the upper drud ge and opportunities. rishaad: it is more complicated than that. >> far more complicated. a couple weeks ago, we saw the offshore yuan become stronger than onshore currency. however, it is now about 0.4%. high borrow costs are lower. people can borrow the currency and short it. won by a long shot. rishaad: it goes to all these other warlike epithets. battle, war, assault. are the stakes being ratcheted up?
>> this is in response to a george soros's, i thought, seemingly mild observations about china. he did say heart lining is inevitable. rishaad: it is happening around him. people's daily come out in strong support. that worries me a little bit. when you have chinese official media saying there is nothing wrong so strongly, it raises the , why has the onshore currency declined 1.3% when there is nothing wrong? rishaad: thank you very much, indeed. let's have a look at other stories we're following. climbing missions deal after a takeover by nippon steel.
nippon has a percent of nishin. --is part of a column consolidation around the world because of a supply glut. they are hoping to offset weakening demand for electricity. low, has hit an 18 year but kansai electric is about to come out with its biggest net income in a decade. earning profits have risen to $2.9 billion. is all due to lower costs and the weakness of the yen.
a japanese airliner has just completed a deal worth $3.8 billion to fly the tokyo-honolulu routes. raised profits forecast for the year. you are looking at a figure of $530 million. there is renewed speculation and pressure on malaysian oil authorities surrounding investigations saying that $4 billion may have been misappropriated. ros is having a look at this. what have the swiss actually said? authorities said investigations revealed "serious indications" of $4 billion being
misappropriated from malaysian companies. they said four cases so far have come to light of criminal misconduct between 2009 and 2014. smaller amounts have been transferred into his was accounts of malaysian public officials. they did not reveal names. they have asked malaysia for legal assistance on this. they want to investigate further and where the money has gone. orther it has gone somewhere losses were sustained. malaysian authorities have made no comment on the losses believed to be incurred. they say they will assist the swiss investigation as to whether losses have been sustained. the response about
to this on saturday? >> malaysian attorney general says it will fully cooperate and review findings before they decide what to do. swiss authorities started looking into this in august after notifications of suspicious transactions reported by the swiss financial intelligence unit. no individuals have been mentioned. the prime minister has been talking with -- >> heads of the advisory. rishaad: yes and the attorney general. thank you very much. a quick look at what we have coming up, joining the subzero club. more on the boj decision to drop to negative interest rates. ♪
shery: theseshery: are the stories making headlines are in the world. a triple bombing claimed by the so-called islamic state has killed at least 47 in damascus just as syrian peace talks begin in geneva. in a suburbxploded when two suicide attackers blew themselves up. summit has had a rocky start, with rebel groups only agreeing to take part at the last minute. andn's military is on alert the defense ministry has installed patriot missiles at its headquarters after reports that north korea may be planning a long-range rocket test. japanese, korean, and u.s. defense officials have seen activity at a ballistics facility consistent with previous launches. it has been more than a month since north korea detonated what it said was a hydrogen a bomb. legislative council
has approved an extra $700 million for a bridge on the chinese mainland. hong kong's contribution to the project is now around $4.3 million. construction on the bridge and tunnel project began in 2009 and has been plagued by delays and overruns. powered by over 2400 journalists in 150 bureaus around the world, this is bloomberg news. on friday, bank of japan came out with an absolute surprise as far as the markets in a move towards negative interest rates. 2%, the yean weakening let's get an update. shawn joins us from sydney. mullave had the weekend to over that decision by the boj.
what message did it sent out? >> what was most important is ta is willing to change his mind in terms of what will work and do what it takes. they have lots of options open to him. there had not been any hints. it is not his style to prepare the ground. but he is willing to introduce negative rates. vote.d through on a 4-5 cpi remains elusive. rishaad: if you are a believer that it works, that should be yen-positive long-term. mi not correct? >> it is obviously cpi. long term, it is about the health of the japanese economy. they have limits in terms of what they can do to slow growth.
it is still the ongoing fight against inflation. sean, when we look at what is going on in china, the pmi data, gains and weakness, how far is all of this down to where the yuan is? does this currency have to depreciate further? >> i think so. i think it is just a matter of time. the current battle you were discussing earlier is really just a short-term issue. clearly, the underlying trend is for capital outflow to exceed current account surpluses. china is still printing big trade surpluses. more money is looking to leave. after all the monetary settings, we think the currency itself is roughly range-bound in terms of the last couple of years. we think a weaker currency is
what china needs at the moment. that will ultimately be what they deliver. we will continue to be on alert for signs of that coming. rishaad: we see these hedge fund industries piling on, betting this does get weaker. plaster over yuan the cracks in the traditional economy, the manufacturing economy? >> the struggle will continue for manufacturing, no doubt about that. there is increased competition area of manufacturing that china has done so well in the past few years. that is becoming more competitive in the sense of global growth overall. the demand is slow. of another lever they will have to pull at some
point. it was interesting to see that today, a glimmer that the boj was noted. rishaad: let's get to what is going on where you are. it is a decision day for the reserve bank. 21 out of 26th expect no move whatsoever. what will you be looking for from the reserve banks? >> we are looking for no change at all this year. rba have an eye on the job market, which has gotten better in the last few months. they will remain optimistic about growth outlook for australia. 2% cash rates are a low enough interest rate. they have done all that can be reasonably expected. overall, we wld like to see the aussie dollar little lower. i think it will trend in the right direction and help
rishaad: today is the start of a new era for myanmar. the civilian government holds power and will dominate parliament after a landslide election in november. let's bring in david tweed. of the birth of her kids outside of myanmar, she cannot take the mantle of the presidency. who will be leader? >> interesting what you said about the birth of a new era. a moreit is an era transparency because we do not have any transparency as far as what is happening in myanmar moment. questions about the presidency. en steps down in february, beginning of march.
have a president decided by then. we do not know who the candidates are going to be. we will see some names coming up in mid february. the key has been pushing back on names. we do not have any transparency on that, or the seating of the parliament. do we have any transparency on ministerial candidates? we do not know that? rishaad: do we know anything about policy? >> all we know is what we heard during the election. they want to build the tax base that we do not know how they're going to do it. they want to encourage foreign investments, but we do not know what industries they will be focusing on. they want to expand educational opportunities, but we do not know how they will do that either. . we have to wait and see who will take over ministerial jobs and
how much leeway they have in how controlling suu kyi is going to be. hopefully, she will allow a little bit of flexibility. rishaad: what about the army? to contend with the army of course, 25 seats in the parliament. the armyme time, controls all the key ministerial positions, including defense and board control. she has to be very careful about how she deals with the army. in a way, regardless of the fact she had a landslide victory, she will have to share power. this will probably something completely new, a power-sharing arrangement, a duoply. rishaad: thank you, david tweed. let's look at what is going on in markets. weaker, off by .5%.
losses are more pronounced when it comes to shanghai. nikkei 225, closing out the morning positive. yesterday, they had that 1.8% gain. singapore seeing a bit of weakness. taipei pretty much flat. that is it for this monday in addition of "trending business." edge."ned for "asia angie will join me to recap the big stores of the day, including the boj rallies. that.l discuss all asia edge is next. ♪
rishaad: this is hong kong and the middle of the asian trading day. this is also "asia edge." ♪ rishaad: let's take a look at our top stories. china's factory gauge hitting a three-year low, the longest stretch of readings below 50 on record. japan's stock rally extends. and we are not monkeying around.
what the new year holds for hong kong and why it might not be business as usual. angie: year of the monkeys around the corner. also coming up, looking sharp. the embattled electronics maker confirms it has received advances from two suitors. kyi will decide who is president as her nld takes charge in the first democratic parliament in decades. a new leader in vietnam, too. all that and much more in this monday in addition of "asia edge ." changes investors are just into is the boj. to is the boj. opan is