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tv   Bloomberg Markets Asia  Bloomberg  November 2, 2016 9:00pm-10:01pm EDT

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♪ kong,0 a.m. in hong midday in sydney, 9:00 p.m. in new york. i am rishaad salamat. >> this is "bloomberg markets: asia." ♪ rishaad: the stock slump deepening as the federal reserve stands pat. december hike to sen
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needing further assurance. rishaad: weakness behind the numbers. >> battle over beijing's influence after chaotic scenes and the legislative council in hong kong. right, all about the fed and the u.s. election, volatility out there. plot looking more likely. 78% that theyy is will move by a quarter percentage point in december. >> most analysts are saying that barring any large disruptive events, december is ago. be coming up?uld rishaad: there is a certain event on tuesday. >> you wonder if we get a trump presidency, what janet
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yellen will be able to do. rishaad: 30 minutes away from the open. >> singapore, taiwan, and malaysia coming online. david. when asia wakes up to the headline of the s&p 500 on a losing streak, seven straight days, vix spiking. what happened today is a lack of risk trades. seeing ares you are not showing a rush to the exits, with the exception of new zealand, poised for correction. fed,of things today, the polls showing hillary clinton and donald trump closer than expected.
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later today, i will talk more about that. the court ruling in the u.k. at 6:00 p.m. theses a look at how measures of risk aversion have changed over the last week or so. ourselveshere we find in this situation, these measures of risk push-up. the haven trades start being bought up. slide, theing things on the nikkei 225 and hang seng index getting bought up. yields pushing lower, meaning bonds are getting bought up as well. markets are on the cautious side. currency markets, the yen getting a bid, gold as well, $1300 is your level. that pound ahead of the crucial
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ruin which will determine how theresa may precedes with article 50. of event risks this weekend next week. go tod: right, let's singapore and get the latest first word news. investors await the next interest rate hike in the u.s., policy has tightened in china. has allowed a steady increase in money market rates to squeeze liquidity. policy have started to tighten selectively. interest ratesrk have been on hold for more than a year. posted its lowest annual profit in five years. to $4.5fit fell 18% billion. earnings are under pressure
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after the bank restructures its businesses. rising badgling with debt charges and costs. told that the banks underlying performance is very good. >> what we are going through is a restructuring of anz. we have had a number of charges we took in the year, which have depressed earnings. underlying performance of our businesses this year have been good, and we are pleased. the reduction in profits is a deliberate action to reposition for the future. overnda: china's reforms state owned enterprises may be forcing companies to work with unexpected partners. china's unicom parents have agreed to collaborate with baidu. it is part of a plan to boost service levels of the mobile carrier.
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show a tight final stretch of the u.s. presidential race. they suggest that damage to hillary clinton from the new fbi e-mail investigation has been limited. it trump campaign says raised $100 million in october in what is called small donations. swing states remain the key. president obama told voters in north carolina that the fate of the republic is teetering. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. >> thank you for that. it looks like we are one fed meeting closer to a hike in december. the fed giving a nod to a rate increase in the final meeting of the year, using that one word. >> kathleen hays has the details. there was no overt language pointing to december. >> a small number of words
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having a big impact on where the markets are seeing the fact going towards the end of the year. thes the key sentence and fed policy statement, the federal open market committee puts out 5-6 paragraphs, and this is the key one. the case for the rate increase has continued to strengthen, but decided to wait for further evidence. builds on what the fed said in september when it held steady on the key rate, saying the case for a rate hike had strengthened. then of course the fact that it said it is waiting for more evidence. that does not sound like a high hurdle to cross. see to bring more employment reports, to bring more retail sales reports, and will be watching global markets and the reaction to the u.s. election, but also negotiations over brexit and the u.k.
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they did not hike in part they mayf brexit, so wait and see, but the rate hike is in the cards for december. it is not a slamdunk, but this is a committee that expects it will be hiking in december. >> where looking at one of our charts. to the far right, that circle shows that in the past 24 hours that there has been a 10 point for them 60% to 70% odds of a december rate hike. it is important to clarify one thing when it comes to the fed being political. the fed says it does not care who is in the white house, but we do care about a market reaction that turns into something that is damaging. for november, the
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sense is that they felt it was prudent to wait and see how this all plays out globally. optimism,s the fed's if you can call it that, on the u.s. economy and inflation justified? all at bloomberg television interview all kinds of economists, some say it is better, some say it is not that strong. the fed's policy statement did not change much. the labor market and job gains are solid, consumer spending , so a nod toately the fact that the consumer has decelerated a little bit. iraq the sentence about how energy prices were holding down u.s. inflation and added a inflation has increased somewhat. there does appear to have
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been a more explicit reference to the possibility that inflation maybe getting some steam now come as of that may reinforce the view that we will have an increase in december. >> another chart, the white line is the fed's main measure of inflation. you can see how it has plateaued. it has risen from the lows. the target is 2%. the fed is watching market measures of expectation. the target is 2%. you can see how it is more e, and it is that pc an uptrend as well. spunore point, everybody what the fed did today. economists are conjecturing that the president of the boston fed dropped his dissent because he conceded there is a coalescing around this notion, this
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expectation, that as long as the economy stays on track, the fed is queued up for a rate hike in december, and he can trust us fed colleagues. >> thank you for that. those fed tea leaves overnight. , alibabaearnings posting sales and profits that the estimates, revenue rising 55% things to growth in its cloud computing services. >> let's get more into the details. we always look forward to alibaba earnings. take us through the highlights. expecting the deceleration in china will hurt their earnings, but they keep on beating estimates, five straight quarters, and they only miss two corridor estimates since the ipo in 2014. also, cloud computing doubled,
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digital media entertainment more than quadrupled. rishaad: right, the point is, is this growth sustainable? question most people are looking at, especially as china's economy continues to slow and they face competition from tencent, also venturing into the space that alibaba is focusing on. it remains to be seen in the next few quarters whether this growth is actually sustainable. >> we are leading to one of my favorite made-up holidays, single state. what is in store? , people from katy perry will be looking at the transaction figures on the platform. last year, growth of 60%, so any growth slowed down with the eight like that people will useh, especially as people
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it as a barometer of the health of the company. you don'txperience, have to be single. everyone shops. rishaad: who is this katy perry you are referring to? millennials that you speak of? miss, whyhead, a the resort of macau failed to meet expectations. rishaad: we will speak to the chief executive of, they'll -- ♪
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rishaad: right, you are back with "bloomberg markets: asia".
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hkex earnings dip on low trading turnover. bloomberg has been told the kkr is only bidding for takata. present when automakers met last week to bid for the troubled automaker. have issued ad to tender. volvo has unveiled its new model built in china. they say the production of the and other models will be move to china as part of a move to make the country a global hub for car production and exports. the ceo said the move from europe to china has practical reasons behind it. impossible to grow and a country like china based
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on exportation. it is too expensive. you have to be present. it is definitely nothing for europe. componentsrary, some and engines will be imported into china. this is an advantage for both sides. a plane loved by passengers but unloved by airlines and leasing companies, the a380. are drying up. airbus slashing production output by more than half. our next guest is optimistic and ordered 20 planes two years ago at the singapore airshow. >> joining us now is the ceo of .medeo >> thank you for having me back. >> any regrets? >> none whatsoever. our order is something we keep working on.
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we have been successful with , but iin getting more disagree with the idea that airlines don't love it. rishaad: emirates certainly loves it. >> it represents an amazing profit maker. aircraft, aced this new wave with what is happening with aviation, greater volume, lower traffic. the airlines are going to a , financial services traffic is becoming a smaller proportion of their business. the bigger part of the business is volume driven on the back of the plane, inspiring middle-classes, particularly out of asia. they are demanding, better price , better product, and the a380
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is the best aircraft to capture this increasing volume. rishaad: you ordered 20 and have not been able to place one of them. you want them working for you. >> it is a disruptive process and a disruptive aircraft. when you have things that are , here you have the same thing with people coming in and seeing an opportunity to be consumer companies. traditional airlines have not yet tapped into their way of thinking. they are mistaken. consumerrs will be the business, not as a transportation business. we are sitting in hong kong. there is not enough capacity on the runways it has. many years will pass. it is not just infrastructure. there is not enough airspace, and flights from here to london, it is a case where you need
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larger and larger aircraft. ,ven if we have not succeeded that they will come when they will realize that this is the way for them to do two things, save money by having more cost-effective aircraft operate to where they can fill a that can giveaft you best profits for your low yielding passengers on the back of the plane and the way that no other plane can do. >> earlier this year, you are saying you are optimistic that you would be labeled to announce customers for these planes this year. have been promising this announcement for quite a few years. i have now stopped doing that. i want to talk about actually getting it done. for airbus to be strategically rethinking the approach to this airplane and not try to fit it into the networks that currently exist,
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but help airlines find disruptive ways of using disruptive technology that this larger plan represents, and maybe focus on people who are intellectually more in line with thinking about the business the way i just described, consumer business driven by lower yields comes to lower ticket prices, high-volume's, but still people want to have comfort when they travel. will it work .2 point if you do long halls on a 787? we will have to ask later if it works or not. rishaad: it's possible. they have not announced it formerly. saying thats kelly 380 will be successful if they read engine it. -- re-engine it. is it possible? next with theit
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new strategy of seeing it as a consumer driven aircraft. it will leave us in a position where people may be afraid of taking on aircraft which has 650 seats. it is not about unit costs. it is about the fear of being able to drive your business to achieve those claims. rishaad: very quickly, what is happening in the world of aviation? has the global slowdown affected you and air travel? >> i think air travel is growing. is high traffic, and everybody needs to adjust to being a consumer company and able to make money with lower costs, more people traveling every day, everything will double in 15 years, so there is no slow down. there are less business passengers paying higher fares. everybody wants better product at lower prices. a380 can deliver it in huge
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coins. rishaad: thank you so much. coming up next, facebook's results blowing out expectations , but concern over future earnings. we will go over those earnings next. this is bloomberg. ♪
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rishaad: facebook took a tumble in extended trading despite earnings and user growth ahead of estimates. >> what exactly is concerning investors despite the. reported in another record quarter and earnings that the expectations. the user growth was 1.8 million users around the world.
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-- 1.8 billion users around the world. the company is tearing through on advertising revenue. the company said in its earnings call that that kind of growth might not last forever. of next in the middle year, the company will no longer be increasing the ad load, the amount of ads in news feeds, so they will not increase the frequency anymore, and that is going to cause at revenue growth to significantly slow. the company will have to rely on other methods like other products. that caused the stock to fall, and the other common that was concerning to investors what's they plan to increase capital expenditures significantly now here. they focus on building out data centers and hiring the best engineering talent. up -- ng
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a chief executive calling bank performance good despite falling to a five-year low. our exclusive interview with shane elliott. >> we have the hong kong-shanghai open after the break. ♪
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>> this is "bloomberg markets: asia." i am haidi lun. rishaad: i am rishaad salamat. the yuan fix just coming through. we are looking at 6.7491. of this dollarck selloff we have seen. rishaad: i have a chart showing us what is going on. that is how we are seeing the 6.76, theion, si
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onshore price. hot on the heels of manufacturing data, strength stronger than anticipated. what have we got at the moment? elite asbit of well, pmi at 52.4, still picking up. right, let's get over to the market open for hong kong , shenzhen, and shanghai. david: a quick look at the offshore renminbi. not the biggest adjustment. that is the level right now, consolidating, as with most currencies. shanghai, hong kong, have a look at the open.
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yesterday, every single stock was lower. have a look, top three and bottom three. unicom, nice bit, 1%. .3 percent,n philippine seeing declines after the vegas out lows of foreign money going back to mid september. bit,s recovered a little still be ind correction territory, 10% down from the pink -- peak. hong kong, earnings coming macau down 3%, long story short, sales miss testaments. the new property also missing estimates.
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deutsche bank coming out with an initial figure of $200 million for the three months. the actual figure came in at 164 million, so falling short. hong kong exchanges, big drop in net income, 44% drop in equity turnover in the first nine months of this year. a drop on commodities revenue because of an 11% drop. out with earnings, second, watching a few things there. a restructuring plan coming through. everytock on just about chart metric, moving average has fallen, the stock did enter oversold territory up until today. quickly, let me wrap things up with a look at some changes from the street.
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beijing enterprises getting the nod, down. new world development getting a not up from morgan stanley. d up from morgan stanley. rishaad: ok, let's get over to singapore for first word news. federal reserve officials have given a subtle nod to a december rate hike. says it only needs further evidence that inflation and unemployment are on track before it hikes rates. analysts say the decision acknowledges the focus on the presidential election next week. alibaba's september quarterly revenue jumped 55% to $5.1 billion, the fifth time it has
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beaten estimates. starloud unit was the performer, sales growing 130%. even,rise almost breaking however operating income miss testaments and low single-digit growth and active buyers and mobile users. court is due to hear a case they could have lasting ramifications for the territories relationship with china. the beijing backed chief executive asked the court to remove two lawmakers. mispronounced china's name when they were sworn in then held up banners proclaiming hong kong is not china. south africa's president is facing calls to resign after corruption watchdog ordered an investigation into government dealings. a 355 page report said jacob may have breached the
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government code of ethics and called for the president to set up a commission of inquiry. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. haidi: thank you for that. rishaad: a look at shares in sydney, the banks announces the lois capps profit in five years in a declining market. they are up at the moment. haidi: analysts were braced for a week result, but this was worse than expected. paul: marginally so. we analysts surveyed thought would get a shade over $6 billion and we ended up with $5.89 billion, that is their weakest profit since 2011. down 18%.
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the reasons why, the same old story, the other three of 's big four face. the net interest margin squeezing down to 2%. the half, $.80, in line with the first half, a full year payout of $1.61 per share, lower than 2015, but take a look at the stock, counterintuitively rising regardless, up .8%. analysts have been talking about how results got hit by restructuring, on ongoing restructuring process. what more can we expect to hear? that does explain why we are seeing this rise, the market likes what it hears.
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earlier this week, anz announced it was selling off five units in asia. since taking over from mike smith, shane elliott has announced they will be diving back the interest in asia a little. going forward, we could expect to see more sales, floating the idea of a life insurance unit in australia may well be sold off, including other businesses as well. if you take out this restructuring, costs involved, $1.1 billion, suddenly the result doesn't look so bad once you take that out of the equation, so that's why the market still likes what it sees. rishaad: thank you a lot for that. paul allen in sydney. haidi: a new superstar in asia's financial world. we are talking about high-frequency trading. sherry and has the story.
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why is it popular at the moment? shery: it's not great for traders. tradingks are cutting jobs in asia, then comes high-frequency traders, and they are expanding in asia. in the u.s., europe, these firms have taken over traditional banking roles from big banks. expanding in asia. take a look at this chart which trading, rise of algo making up more than 30% of trades in the region. it is less than the u.s. or , 66% in the u.s., 44% in europe, but still huge growth. ok, the trouble is that this is a burgeoning business in this part of the world. how has it been received? shery: it is.
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it has its own risks. depending on what country you're talking about, the reception has been mixed. in china, there has been a crackdown on high-frequency traders. in india, some brokers are asking authorities to his low down computer trading. india is the developing world's biggest electronic trading market. then you have country such as singapore being viewed positively, several electronic traders setting up shop. the big banks have seen a recovery recently. does this change the picture when it comes to the process? >> take a look at the five -- u.s. investment banks, more than $20 billion in stock and bond trading revenue, the most since 2009, so you would think that they have more will put offey
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hiring more people because they have made that much money with all the job cuts. morgan stanley/a quarter of its fixed income division, then the revenue almost tripled. no reason for big banks to go out there and look for these people and hire them back. jobseekers see the bright spot beating -- being high-speed trading. the look of these firms currently hiring with job postings in singapore. hiringmerican firms are local firms, all tsonga have plans to expand. haidi: thank you for that. they don't have any choice but to be enthusiastic. rishaad: they have to. it is one of the few expanding parts. up next -- haidi: the fed standing pat, but keeping options open.
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how does the election play into this? rishaad: looking at this and more with bank of singapore. ♪
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have a: right, let's look at the markets. what have we got? it has not been great. it is clearly a week where there is not a lot of conviction, risk being taken off the table. david. david: lots of reasons not to be cavalier in a lot of ways and take those big bets ahead of those elections. losses from wall street overnight. the philippines and the ceiling, a correction, entering a correction. the philippines continues to see
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of the biggest days of outflows yesterday going back to september. let's broaden this out. how much risk aversion is there? how riskhic measures aversion has changed over the past week or so. this when people are piling into safe havens, gold, yen, you do tend to see on hongike that vix kong, hang seng up. things that trend down, yields. yields and in jgb u.s. yields despite the fact that you had the fed signaling that december is a done deal. on 10 year treasuries are on the way down.
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that is fairly clear, not a lot of appetite for taking big bets. dollar-yen closer to 103 at the moment. -- dollar sold against the overnight. it is being sold off at the moment as well. pound sterling, up for a fifth straight day. 123. later on, there is a crucial vote taking place in the u.k., a panel of high level judges will determine or not whether theresa may can perceive -- proceed or does it have to go through parliament. that is a key vote. that weare telling us might see this slingshot oup. there we go.
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that is where a lot of these buy stops are. guys. .ishaad: right, breaking news we did have services coming in better than september, 52.4. , 52.9.posite pmi of this is the eighth consecutive month of expansion. we solve manufacturing stronger than expected. this is stronger than expected. new orders are the crucial component. expanding faster than september. haidi: china holding up pretty path,but the fed holding
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but giving a nod towards a move in december. rishaad: our next guest says hillary clinton is she wins will be restrained by a republican majority in congress. the chief economist from the bank of singapore joins us. great to have you. it feels like the fed is saying that barring some massive disruptive event, december is a green light. of one potentially disruptive event. what happens if we get a donald trump victory? >> if donald wins, then all bets are off. know what his economic policies will be, but they don't look good. if you start a trade war, it will hurt exports and consumption. , the fed won't want to raise rates given uncertainty. if donald trump wins, they can't go in december. there won't be,
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much to stop them from a december rate hike. where does the fed look more internationally than ever before, what would they be looking at now if they're not domestict the regin agenda. wanted toed like they raise rates at the september meeting, but we have that surprise china devaluation the cause market turbulence. shown itself to be excessively sensitive to market volatility and external events, so something along those lines could do it. as you are saying, is more likely to be something domestic. getting onee just after the other when it comes to these solid indicators for china. are you convinced that this
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signals that the recovery is on foot? it is not just china. if you look across the world at they dor october, suggest the global cycle may have picked up some speed. in china's case, you are a bit less comfortable than in other places because it has been supported by the credit home and this housing boom that they are now trying to squeeze. expect the china numbers to soften a bit over the next six months, but i don't think it will be about enough that you would put china back on the radar as being a short-term risk. in terms of 3-6 months disruption, it still looks ok. rishaad: where else are we seeing green shoots? there is more positive news out do they pmi strong, but
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represent real change their and sustainable growth? europe gets bad press, but the numbers have been quite solid for the last 2-3 years. we tend to talk about the political risks, the geopolitical terrorism issues, but the economy has been fairly bulletproof for those types of concerns and expanding steadily since the ecb point in its emergency policies. the real problem is the inflation has not picked up in , andnse to the growth rate that is what is troubling the european central bank. that is why they need to extend the policy framework at the december meeting as well. haidi: great to have your insights as always. let's have a look at some business flash headlines. australia's energy minister strong desire to
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acquire -- the works. that poscor saying wants to bring its technology with a proposal to expand. haidi: the world's biggest hotel operator betting on growth in tourism, looking to double the number of hotels by 2022 per share for a huge tsunami of chinese travelers. $14company completed is billion acquisition of starwood. the wall street journal claiming valeant is looking to sell assets worth around $2.5 billion.
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sources telling us that valeant was in talks to offload its salix drug business. next, china may step in to interpret a key law when it comes to hong kong's legislative council. the details are just ahead. this is bloomberg. ♪
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haidi: a hong kong court is due to hear a case in the dispute between the territories government and two independence politicians. rishaad: they asked the court to remove two local lawmakers who protested against chinese influence when they took their of that the legislative council. we are at the high court here in hong kong. this has been a controversial move. rosalind: that's right. court -- they moved to
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oust them. there have been reports that used could use a rarely power to interpret hong kong's basic law, and that has caused rumblings in hong kong about the possibility of increased influence in hong kong affairs. the move would preempt the courts and decide the case for hong kong. there has been quite a lot of concern about hong kong's high degree of autonomy. rishaad: what else did the
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hairdo that triggered this move to oust them? do thathe pair triggered this move to oust them? >> they decided that they were going to mispronounce the word unfurled and also banners that said hong kong is not china, so the legislative council said they would void oaths. been -- they tried to take their oath and they were helped by pro-democracy lawmakers.
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thank you very much. haidi: up next, ubs wealth management about why they are so bullish on gold. this is bloomberg. ♪
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♪ announcer: from our studios in new york city, this is "charlie rose." charlie: we begin this evening with our continuing coverage of the controversy surrounding fbi director james comey. his decision to come forward about new emails pertinent to hillary clinton's private server has met fierce criticism. some have pointed out that he was in a difficult dammed if he did and dammed if did not position. in an effort to mitigate the bipartisan outrage, justice department officials said monday that no further information will be released until the investigation is completed. the fbi dior


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