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tv   Bloomberg Markets Asia  Bloomberg  November 1, 2016 9:00pm-10:01pm EDT

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♪ rishaad: this is "bloomberg markets: asia." i am rishaad salamat. ♪ rishaad: asian stocks fall on u.s. election jitters, the yen strengthens. south korea's president naming a new prime minister and finance
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chief as she tries to recover from a political scandal. ,uch needed good news for tata the jaguar brand leading growth in the u.s. market. look at markets of the moment, a lot of jitters out there. malaysia, and singapore coming online, but it is about the polling in the u.s. haidi: that's right. we are getting jitters when it comes to the asian session. have managed to keep our head above water when it comes to the political noise from the u.s. of red see the sea across the region. dollar-yen is driving the session when it comes to tokyo. we saw a steep selloff in the dollar overnight.
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as ave the stronger yen result weighing on exporters and driving markets lower. take a look at what we're seeing when it comes to oil prices and gold. gold overnight, take a look at this, hitting a little resistance. that is doing quite well. we have seen some gold miners doing very well. take a look at the movers we are seeing. yahoo japan jumping, earnings better than expected. they are saying valuations are rearting to look little more interesting. watching forstors rate cues as the federal reserve meets wednesday. most are betting the federal reserve will press the pause button again. kathleen hays has more on this.
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what do we know? >> there is an election ahead. a lot of people are thinking of election uncertainty is one of the reasons that even if the fed wanted to move, they won't. this is taking over all the markets. this shows dollar-yen volatility over the last month, the white line, pretty flat, starting to move up -- i'm sorry, that is for the last week. those numbers have moved up since we have the reopened investigations into hillary clinton's e-mails. meanwhile, investors and economists saying another reason to wait is the jobs report on friday. isn manufacturing index coming out on monday in the u.s. it grows well above 50, but since 2009 -- even though
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economists are saying they will be reassured at the end of the meeting that it is ready to move by the end of the year, that would be december. a former fed governor told us this about half an hour ago on "daybreak asia". >> the probability in december is quite high for a rate hike. data is likely to suggest the probability is even higher, and so i think they are largely ready in the u.s. and worldwide. >> he said it would take a big shock globally for the fed to hold off. he is pretty sure they will move in december, then two more rate hikes in 2017. rishaad: it does look like the feds chips are down on the september meeting. what are people saying about that hike then? >> that is what the markets are betting on.
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lot,the one we look at a november hike, the odds have been flat. that was after the september meeting when we were looking at the effects of three fed dissenters. very interesting, three economists at three of the feds primary dealers, the wholesalers , all areury debt saying the fed will hike this year. much international uncertainty, brexit, italian referendum, and they're saying the fed will hit the pause button into next year. rishaad: thank you very much indeed. right, let's get to first word news now. south korea's president
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has nominated a new prime minister and finance minister as she works to emerge from a political scandal engulfing her administration. namedw prime minister was in a televised briefing, a policy advisor under a previous administration. polls continue to narrow a week out from the u.s. presidential election. an abc-washington post survey 46% tonald trump ahead 45%. the dollar, mexican peso, and brazil's currency all felt. fell. the bbc has reported tilings crown press will be confirmed the new king on december 1. he had delayed taking the throne after the death of his father.
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the government says the one year morning. not stopped arrivals. were down in the u.s. 4.4 percent last month from the previous october, which did have two extra sales days. toyota, and fiat chrysler all decline. a fire at ford headquarters delayed the release of its report. a quick check on the asian automakers, they look like this. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: what a difference a day makes. valeant pharmaceuticals plunged by 12% on monday on nuisance being investigated for accounting fraud. it's all 34% on the latest session that a $10 billion deal is in the works. su keenan has this from new
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york. su: speculation that the deal might come for valeant where they could spin off a unit and make aliens of dollars, boosting the stock by a third, a big change from the decline on monday. after the bell, valeant confirmed that "talks that maybe to a sale of a unit were underway." the unit is a crown jewel in the company's core drug business, making treatments for ulcers, heart burn, and according to the wall street journal, the unit could be unloaded for as much as $10 billion to a japanese drugmaker. valeant confirms they are "currently in discussion with third parties over various diverse futures, including but , they didd to salix not say who they were in talks with."
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to those close to the matter of the year-long probe, it could result in charges in the coming weeks. bloomberg recent reported in may that the japanese drugmaker had previously approached valeant, but were rejected. the stock price is down 90% from last year's peak. that has put enormous financial pressure on the company, legal woes added on top of that, and many believe that they're able to sell off a business or two that it could provide a lot of financial liquidity. take a look at the chart that shows the recent pattern of price moves for valeant, and on the far right in the tuesday session, an enormous spike in the price and the volume of shares traded. right, still ahead, is the aircraft leasing market getting too crowded in asia? we will ask the chief executive
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of one of the biggest players. plus, investing in asian infrastructure, the risks and rewards? that is coming up next. ♪
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what a day in singapore at the moment. the trading day just started there. it reflects what's going on in the broader asia-pacific, stocks on the way down. of the nextospects trading day suggesting declines as well with futures reflecting the mounting anxieties ahead of next week's american presidential election. donald trump according to some measures is marginally ahead of hillary clinton. , exportersnikkei 225
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way there on that market, the yen strengthening. just to give you an idea of some of those concerns, swiss franc and gold maintaining gains from the last session, investors favoring some of these haven assets. off by a 10th of 1%. you up to breast with the latest business flash headlines. a $30 million loss in the third revenue ofgative $200 million in the first nine months of this year, the cheek executive bill winters is weighing the sale of that division. ocbc saying rising compliance costs of big factor on its business. the cost of adhering to
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regulations is up 35%. it also said that ocbc is open to expanding through acquisitions. >> for others, it is important to scale up in this business so that as we build cost infrastructure, our product profile can serve a larger client base with the same cost base, even if you have a smaller business. the extent of investment to make sure you are in compliance with all the regulations is as strong as if you have a larger base. chairs: yum china , the company has completed the spinoff of those chinese operations. the chief executive says he's
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focusing on expanding delivery. >> delivery is growing rapidly. like every 10 vehicles as a someone with a backpack carrying a delivery. our business is no exception. we did more than $700 million in delivery this year. digitalivery and ordering a related, so expect to see significant growth in the years to come. rishaad: let's get back to the conference taking place in singapore. the ceo of one of britain's largest engineering consultants, $2.1 billion of annual turnover. with howrt things off you are finding things, especially when it comes to asia.
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everybody talks about infrastructure and infrastructure imperative. how are you finding it? there are a lot of growth opportunities for us. large businesses in hong kong and singapore and lots of businesses in the region. in general what you find is an anonymous amount of infrastructure needs in those countries, and the question is how can we match that with financing and investable projects to attract private money, and that is what the conference is all about, and that is the expertise that is here that is needed to make that happen. rishaad: you have hit the nail on the head. but iss a huge need, there the financial capability to do so? you saying willingness from government to involve themselves in private partnerships as well to get things done? exactly, look, what we see is
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a movement in the industry is that there are more and more infrastructure funds willing to put private money into play, matching the capabilities of government, and what is needed for that is certainty from a revenue-generating perspective with regard to infrastructure assets, but also input costs, and that is with the industry needs to apply much more rigorously. thes interesting that for first time technology is much more important in that regard, some project management based on state-of-the-art digital technology comes into play in order to create this kind of investment certainty needed to attract private money, and i am optimistic we will see more of it in asia and on a worldwide basis. ,ishaad: then you have to ask
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where are the stars aligning goes for what you are talking about and where are you seeing the most opportunities as a result? domestically at home in the , butright now, projects also energy and transport infrastructure, but equally, we see in for nations in singapore, the middle east, a lot of new ideas coming to market, how infrastructure can embrace technology more. just look at intelligent mobility as an example, schemes that don't have to wait for a fancy car. it is just around the corner right now. that is for the benefit of the foromer and for the benefit more affordable transportation,
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and requires a realistic approach to how you match transportation infrastructure of the future with these services. rishaad: let's talk about where you started the answer to that question, britain. you had a lot of fears about brexit. what about those fears you had? are you seeing any of those fears come to light? well, we said all along that our concern was mostly from the perspective of the accessibility of engineering talent, and that is still extremely important to us as we go into negotiations. reminding thetly government how important it is that we maintain this, not only talent in central europe or continental europe, but a
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worldwide basis as well. other than that from my point of the need to invest in infrastructure is visible, and that is a right decision for a long-term perspective for the u.k. economy, and that is why i'm not worried about shorter midterm effects with regards to brexit. rishaad: do you have any material benefit from the recent declines in sterling? that is all short-term. of course there is a certain translational benefit we have from the business in the u.s. this is nothing you can base it on. a sustainable development going forward.
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we are just not binging on any kinds of currency fluctuations. rishaad: great talking to you. thank you so much. right, up next, #cap for its first profit -- this is bloomberg. ♪
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rishaad: let's have a look at what is going on in japan and south korea. the kleins of the moment, followthrough from wall street. moment, as at the followthrough from wall street. of strength of the yen affecting what is going on in tokyo, and sharp on the way down.
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thep on the way down for first time in a week after disappointing earnings, at $25 million. trading estimates at 75%. we have more on this. shark at $25 million. doesn't look too bad right now, but you don't agree. tell us about your skepticism. i have withrns sharp is that the turnaround is about cost-cutting, not really about boosting the top line. would buyas foxconn the company and turn it around by bringing clients to sharp and helping to add capabilities and product lineups. certainly that has not happened so far. the real concern i have is that in the first six months and the forecast for the second six months, we will see revenue fall year on year, so no evidence that bringing foxconn is
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building the top line. what we are seeing is that foxconn is able to come in and wield a sharp knife and cut costs. that looks good in the short-term and dresses up the balance sheet and profit and loss, but it does not build a fundamental basis for a long-term turnaround. your view, what does sharp have to do for you to get believing in start a real turn around or what you would believe is a real turnaround? yeah, that is an interesting question. what i would be wanting to see his top line growth that is fundamental for sharp, not just foxconn handing over work. i would want to see some evidence that they have built some technologies, improved efficiencies and manufacturing, such that the other companies out there decided they really
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want to use sharp and sharp as technology and products they really need. the best way to see that would be topline growth as well as gross profit margins, even if not gross profit. of course, it should flow through to the operating and net income level, but top line is the most important thing i want to see, something coming from sharp internally, that customers are going directly to sharp because of what sharp can offer, not because foxconn is handing over work. it is too early to see, but i would want to see it in about a year from now. rishaad: great talking to you as ever. some people are looking at sharp as a turnaround story. believe thatuite there, suggesting he would like to see more before he starts believing. break, but on the other
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side, what has been going in the financial industry with standard chartered's latest results showing the banks turnaround is still a long way away from completion. we have a breakdown just ahead. the market open in hong kong and shanghai. ♪
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this is "bloomberg markets: asia." i am rishaad salamat. hong kong and shanghai about to go online. we are seeing a pullback taking place. hand withing hand in opinion polls in the u.s. showing donald trump is drawing level with hillary clinton. some strength in the yen having a negative impact when it comes to equities which are export related in tokyo. nikkei 225 and the topix at
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the forefront of driving those losses. so far, we have seen that spillover affect with the rising political anxiety taking hold. been an extraordinary campaign, but look at how this is playing out in asia. not a lot of conviction, traders saying there is not conviction to build up positions, particularly japan. the stronger yen is one factor, but we have a public holiday tomorrow, then we have the nonfarm payrolls and the fomc meeting. we have that the boj refraining from adding to further's endless number but not tapering -- further stimulus, but not tapering either. some losses across
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financials, almost every single sector when it comes to japan. lows, close to session extending losses, a weaker won as well after the announcement thehe president replacing finance minister and prime minister in the wake of that scandal that has engulfed south korea. elsewhere, selling when it comes to australia. volumes are back up. volumes are traditionally down on 30%. return toing business usual, but in the wrong way with negativity coming through, particularly when it comes to materials. open, hong the china kong off by .9%. we do have the strongest yuan fixing sense october 21.
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october 21, the pboc keeping up pace. here are some market movers. as perd chartered falls posts losses. saying --data rishaad: right, let's get over to sydni and paul allen, who has the latest first word news headlines. thanks.
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asian stocks have followed wall street's tech line as anxiety mounts ahead of the u.s. elections. polls continue to narrow with the latest survey putting donald 45%, within 46% to the margin of error. democrats have again question the fbi's timing over the release of bill clinton's 2001 part in. valley has confirmed that is in discussions to sell its salix unit. haswall street journal indicated there is one other potential company interested in the unit. 's speeding ahead and a stalling u.s. auto market.
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the addition of an suv and compact sedan has drawn new, younger customers to the brand. hassouth korean president named a new prime minister and finance chief as she seeks to restore confidence and her administration. an influence peddling scandal involving a close friend has sent her approval tumbling. minister was a former advisor. minister -- global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: right, getting to that south korean political story, our editor has more on this. government reshuffle is taking place as she is trying to shore up her position, what you making of it? >> people are wondering how the
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reaction will go over. we are waiting to see how lawmakers will see this. technically they have to approve these appointments. she has named a new finance minister. early indications say this guy should be well received. he has taken a role in overhauling heavily indebted heavy industries, so the personnel might be a good thing. the question is really what can he do now. park is still in the scandal. is this enough to stop the bleeding? rishaad: exactly, she is the still the one who has to face up to these influence peddling charges. >> her friend is being questioned by prosecutors under detention. they are looking for information from banks, from other companies , large korean companies that might have been involved, so it is still unclear the extent of
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the influence of this friend, and prosecutors are trying to figure out if there are any charges. rishaad: this goes to the wider picture. have been other scandals and the corporate world and south korea, hanjin shipping in bankruptcy, the biggest retail chain as well. time where it is a you need strong political leadership, strong policies coming from the government, and this scandal is just distracting from getting solutions to those problems. as you mentioned, that is all taking place. kam park put in place a government that can start addressing these rigor structural issues facing the korean economy? that remains to be seen. remains liket this, she will be weekend and cannot make these changes. >> and she is a bit of a lame-duck already.
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office,15-16 month in so people are looking to the next election. a new primeng in minister and finance minister, what can they do in the next 16 months to get things back on track. thank you very much, looking at the scandal involving the presidency and south korea. a quick check of business flash headlines. acquisition will pay off in a few years, expecting the deal to add $500 million to its balance sheet by 2019. elon musk is also the ceo. he says it will be a single destination for a solar roof and battery. biggest right hailing startup is said to be in talks to raise 600 million dollars, and may close the deal by the end of the year. softbank may lead the investment round. the funding would give the
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company enough capital for 18 months. this is after uber up efforts in india after exiting china early this year. irgin australia see subdued conditions. it is down $10 million from year ago. it is predicting tough times ahead. forecasts toutting a maximum gain of 2%. standard chartered making headlines, the latest results may dent hopes that the bank is on track for a turnaround. earnings falling shy of estimates. someank is showing progress with cost-cutting, but they did not like that junior bond story, did they? >> they didn't like the bond story or the earnings story.
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it was lower than expectations. progressthey have made with cost testing, they still have a lot of challenges they need to face. rishaad: the question is people will question whether bill winters is getting this turnaround strategy right. i guess the jury is out. jury is out. he got operating expenses down, but there is a long way for him to go. when you look at commodities exposure for instance, the bank had around $37 billion in exposure to commodities in the first half of the year. that is a lot. why the skepticism? why are investors so skeptical? >> partly because of the commodities exposure, partly because they have their work cut out. with.ave a lot to deal look at hong kong, a core market, there is a mortgage war going on. rishaad: thank you very much
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indeed with the latest on standard chartered. up next, taking a look at the challenges facing the aircraft leasing market. we are joined by angus kelly next. this is bloomberg. ♪
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ofhaad: more than 40% world's aircraft at least. our next guest is angus kelly and hong kong for an air finance congress. thank you for joining us today. it is a huge market here. that is continually growing. what are the opportunities? >> china has tremendous opportunities.
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over the last 20 years, we have seen an explosive growth in externally,ism internal traffic in china, but that has been carried by the big three carriers and their affiliates. now, the next phase of growth in the chinese market will be driven by low-cost carriers. the current penetration rate is single digits. that will change dramatically, like it has in europe and the u.s. they need skies they can navigate through as well, not be closed down randomly. that is the issue for them. the infrastructure issues that surround aviation are not unique to china. how long does it take to get up runway in heathrow? rishaad: 40 years. >> and we are not done yet, so those issues are out there.
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ofse are within the purview the state ethics, particularly in shanghai, where there are significant restrictions. have shown an ability to grow aviation successfully and profitably and china, which is not an accusation i can level that many markets. rishaad: if you are looking c's, you must be ramping up orders. >> we have 350 aircraft on order. they are a great success. what is also in demand as the older technology. airlines are saying it costs so much to buy these new machines. squeeze a few more years of life out of the existing metal i have. upthe long run, fuel will go and these machines will be the airplanes of the future. intoe the biggest supplier
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china, and we plan to keep it that way. business tends to be short-term. rishaad: wet would be when you supply the crew. longer-term. >> longer-term, absolutely. they are generally 12 year leases for a new plane, or six years for a used aircraft. we will buy, sell, least, two every working day. rishaad: what about leasing rates? how are they varying in all of this? there is a slowdown taking place in various parts of asia. you could argue that china has had potential for a long time. >> indeed. lease rates are influenced by other rates. everyone percent move in interest rates is about $20,000.
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12'd divide $24 million by -- rate environment, is about amortization? >> exactly. i might've been getting $60,000 more a month for that airplane. now i am not, but my margin is intact. we talk about chinese leasing getting hot, isn't it? they are snapping at the heels of their rivals, how you account for that? >> consolidation is a good thing. i think it's a good thing avalon bought cit. rishaad: why? >> you need to have experienced professionals -- rishaad: you say you are building up some sort of duopoly? no, i can assure you of that.
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there are plenty of competitors, but over all which you want in any industry is competent management of large platforms. we have here. consolidation is a good thing in our industry. also, with the current demand for aircraft leasing, we need to come up with 40 billion a year just to stand still, give or take $40 billion that we finance every year. there are two bank giants, and you have five other guys who are genuine global players, and we have to take the lion's share of that every year ad infinitum. we need more players. we don't have enough at the moment to cater for the long-term demand for this product. rishaad: the chief executive of avalon was sitting where you are saying, watch this space. should you be saying watch this
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space as well? perhaps you want to get bigger when you have these five other players that may need to join with you, and using consolidation is a good thing, so are you in the process of making an acquisition? >> we are not in the process of making an acquisition. ,or us, buying a smaller player avalon, whoever it is, it does not do a lot for us in terms of market presence. there is no where we aren't. there is no strategic benefit to us. we have been the most acquisitive in the last 15 years. we have bought 15 companies. ultimately, i have to allocate shareholders money in the best possible way, and negative buying airplanes, a company, or share buybacks, and that's how we look at it every day. we are not here to be the biggest. we are here to be the most profitable and the best. rishaad: you identified interest
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rates and where they go next. i will not bore you with that question. what is the biggest risk you see and the next 3-5 years in your business? >> as we look forward, i would say protectionism on a global basis. we are a global business. we rely on free trade. free trade drives global gdp. equalitye has brought to incomes on a global basis, more than anything else. people talk about inequality of incomes, and that may well be true in western europe and north america, but in asia, it has never been more equal in many centuries than what it is today. to globalization is the biggest risk you foresee, a protectionist world creeping up, ok. we talked about single aisle, low-cost carriers in china, but what about white bodies? this is the bread and butter, isn't it?
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this is the icing on the cake. >> we are the biggest player in the white by market. has new-body market .echnologies the wide-body market is new with an influx of technology. there are a lot of seats in the white by market now come and certain wide-body's are out of favor. i have noticed that 40's, they are staying we saying we will stay e are.
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loves to talk about, final project, is the a380 at? why are people buying it? >> at the moment, it is ahead of its time. it is a fantastic airplane to fly in. nly playing in the world that i change my schedule to fly on. you have to be able to fill it consistently on a decent sized fleet to make it work. not enough airlines in the world have that network because not enough airports are slot constrained. you only have a few airports where there are true slot constrained. you need more of that, then the digger -- bigger machine will have its day. thank you so much for
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joining us. news, thereaking south korean prime minister is to formally stepped down at 1:00 p.m. local time. south korean prosecutors seeking an arrest warrant as the scandal continues their. samsung officials are to be question in this whole probe taking place. it is involving influence for money. we will have more details on that coming up. right, is china losing his movie magic? what is behind the box office slump. this is bloomberg. ♪
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romance witha's the movies may be on the rocks as box office sales fall for a second straight month.
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our ticket sales lacking here? in october. 20% in october. compared toops away the previous year. is 4.8-date growth percent compared with average annual growth of 38% tween 2007-2015. 2007-2015. one big release was pretty much the only found to hit in october, taking in a third of the ticket sales. a story aboutfrom fishermen killed by drug kingpins.
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essentially the market is maturing and the audience is less willing to put up with poor were seeings, and fewer discounts from mobile ticketing apps, a big driver. rishaad: what is being done them ums acherone b seats? >> to rely -- on seats? >> they are relying on foreign films. these may help, but we are not sure how much. they did allow hollywood movies to boost sales, and the doing it again towards the end of the
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year. rishaad: great stuff. right, coming up, south korea's lyrical scandal is intensifying with prosecutors seeking an arrest warrant for president parks closest ally. the latest is on the way. ♪
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♪ >> from our studios in new york city, this is "charlie rose." charlie: fbi director james comey announced friday in a letter to congress that new e-mails surfaced related to the investigation into hillary clinton's private server. the e-mails were discovered through a separate fbi investigation into former congressman anthony weiner. in a letter to his fbi staff, comey explained his decision, saying it would be "misleading to the american people were we not to supplement the record." major political followed unfolded over the weekend as hillary clinton called the move "unprecedented and deeply troubling."


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