Skip to main content

tv   Bloomberg Markets Asia  Bloomberg  December 15, 2016 8:00pm-10:01pm EST

8:00 pm
rishaad: 9:00 in singapore, 8:00 in the evening on the eastern seaboard of united states. --from bloomberg's head is asia headquarters, this is daybreak asia. ♪ rishaad: for the dollar dominates the trade as they shun safety, gold slumps again, they got -- the yen turns positive. sophie: the willingness of the yuan. rishaad: yahoo! is great -- latest breach from verizon. tokyo, and territory in
8:01 pm
abe and prudent talk about territory. -- putin talk about territory. rishaad: the dollar is surging over levels haven't seen in 14 years. we might be even weaker than that. .ophie: the dollar-yen was high i did look at jgb, 10 year highest since january. rishaad: gold also slumping, so this is what we have. sophie: let's take a look at how markets are doing today. haidi: the big ones are china, when we get the yuan today. look at the bond market, the 10 year yield in china spiking the most on record. there are pretty significant moves in income, the 10 year yield on the japanese government bonds surging 0.2%.
8:02 pm
that was the highest yield we have seen since january when they went into territory -- negative territory. the 16 is continuing to play out across asian markets. this is what we are seeing. singapore stocks are coming online, 0.3% higher. withd a very strong day nonoil domestic imports. 11.5%,exports jumping and we were expecting a decline of 0.2% electronics, climbing though the highest in over a year. we will swing this one way or another, but very positive day in terms of demand for this part of the world. seeing weakness from malaysia, down 0.2%, tracking the weakness through the other energy heavy markets. really front and center is the
8:03 pm
dollar dominance story, dollar-yen at the highest we have seen all year, the nikkei 225 up 0.6%. we are seeing nice buying when it comes to export sensitive names, but weakness when it comes to financials. dollar dominance. rishaad: let's get to beijing. tom mackenzie has the first word news headlines. --tom: nintendo is down after the first foray into mobile gaming. that is despite super mario run being the number one download in japan, u.s., u.k. and germany. super data expects super mario run to reach 30 million downloads and bring in $60 million. the game was lost for the iphone 7. oracle fell in extensive trade
8:04 pm
after mixed estimates. it was little changed from a year ago at $9 billion. that is slightly below forecast $9.1 billion pickup. sales were dragged down by the new software licenses as oracle shifts to offering more cloud-based programs. japan and russia have agreed to cooperate on the running of four -- annexed by the soviet union at the end of world war ii. the two leaders discussed a system of joint economic activity on what is known as the northern territories in japan and the southern islands in russia. tourism.d for beijing has the highest pollution warning of the year. they imposed a red alert from friday evening. some vehicles will be stopped from entering the city, and young people and the elderly are being warned to stay indoors.
8:05 pm
shanghai has issued a similar air quality eight times above the acceptable levels. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am tom mackenzie, this is bloomberg. sophie: thank you. last month, the market day in beijing -- rishaad: horrific. with the fed talking about moving up, investors may have to put pick faith in china. -- may have to put faith in china. sophie: what are we looking at? >> we saw emerging-market currencies get hammered in response to the fed more .ositive first rate hike the next step according to a number of analysts and traders are looking at china. can they, and will they, have the willingness to continue to support the yuan instead of letting it depreciate faster? reservesthe drop in
8:06 pm
either chinese, they have been depending -- defending the currency. $279 billion of their reserves depleted, down only $3 trillion, but down from $4 trillion. rishaad: a quarter of their reserves. stephen: there is concern. now china's desire to see the yuan fall is critical to providing, preventing a bigger flight of capital out of china in anticipation of further renminbi weakness or one-off. it exacerbates by what trump has been saying, labeling china's currency as [indiscernible] he wants a stronger you want, but he is also talking up a stronger dollar. which one is it? rishaad: with the fed, when they act, they reverberate globally. they could even reach the chinese property market. stephen: we knew this was going to happen, but we still had selloff of emerging-market
8:07 pm
currencies. what will it do for the domestic economy that is also quite fragile with debt load and recovery? we have a six part commentary coming from state media. if you are having insomnia, look at that. it goes through the point. shenhua news agency says the impact of the housing move should not be overly exaggerated. they are looking at expectations of housing prices according to the chinese government, not expected to rise much in 2017. it will not have a big impact on the stock market. they are managing expectations because there is a herd mentality. they want to prevent that stampede. the dollardge that will depreciate in 2017 and remain stable if not appreciate against the basket of currencies , but here is the main line. chinese public should not exchange you want for u.s. dollars. -- yuans for u.s. dollars.
8:08 pm
and the days when the united states seizes and the whole world catches a cold have gone away. the liquidity is no longer in u.s. dollars. sophie: is that the lowest since 2000? stephen: yes. rishaad: we have the six coming up. stephen: that is a good way to see whether, what their intentions are. so --d: it was up .9 4 -- stephen: they said yesterday it was stronger, better than x acted. -- expected. sophie: the usa says consumer stocks could be among the best reformers in china. and we go to the japan, it may not be
8:09 pm
as dim as it seems in 2017. ♪
8:10 pm
8:11 pm
♪ sophie: rishaad:
8:12 pm
should diverte the risks. our investment in china is bad . we should divesify. pharam [please stand by]
8:13 pm
rishaad: takata was hoping to restructure. thehie: rate hikes for h second time in a decade. we have the ig market strategist. why are we seeing this reaction to the fed? >> i think the market did expect it. high, but 3 for 2017. the contextitself, didn'tar, the market
8:14 pm
really react . this time it did. i think there was skepticism. we would get, 30% rate hikes. aboutd: it has been all the dollar. gone up withve equities, is it sustainable? what are you getting from clients? >> we have this donald trump optimisimm,inning
8:15 pm
but moving forward, the clarity, when they come into play as well. finger to't put a it. moving forward is about the policy.0 days, shaping sophie: we are seeing the yen weaken further. becausesaying next year of that, what are you anticipating? japan weak yen has given -- rishaad: i have to interrupt. the reference is 6.95, serious
8:16 pm
weakening. what is your view? it is down to the dollar? >> sure. overnight we asaw the major yuan.ut pressure on the this is comparing dollar index. we see a lot weakening overnight. sophie: what do you see in the space?g strength? dollar >> that will be the opening
8:17 pm
economies, suffering in a sense. we had this flowing of the funds to the emerging markets, that was the hot topic please countries that we are going to see the emerging markets. in that sense, the other countries as well. >> word we go from here? things are changing like that with the equity markets in this part of the world. finding favor you with. if you look at evaluations, it is screaming buy.
8:18 pm
sense, we're that getting mixed signals. taking a look at the local singapore market, it is directionless for a. bag of time -- period of time. you have the u.s. which could on then some things but other hand, malaysia and china. how china is going to do, that is pressure on singapore. get more of this clarity into the new year, once ofin calling the treasury the u.s. is going to be. >> have a great day. ig asia. we did get breaking news. the dollar strength behind it,
8:19 pm
again weakest. >> weakest since may 2008. ensure aattempting to gradual move your. >> we are five away from having a seven on the yuan. numbers asll of the point 029.six having second thoughts about the acquisition of yahoo!'s core business. this after a second major breach were one billion users were hacked. -- where one million users were hacked. verizon is looking for a price cut or a total exit for its deal for the yahoo! core businesses including yahoo! mail, flickr, tumbler, as well
8:20 pm
as yahoo! news. betting the praise could fall by $1 billion. if that is true, that would make yahoo! the most expensive in internet history. two things are working at the same time to prepare for any outcome. team is focusing on continuing and another is focusing on probing the severity of the fact. focusingthis team is walled ofe rest of the company and exploring the next step options. it isave said that reasonable to assume that the breach has had a material impact on the deal and we are seeing a share price that. hit.rice in the market cap
8:21 pm
billions of dollars. technology company is putting his from phase four, saying they are confident in the value and working towards integration with verizon. being cautious, saying they will review the impact of the developed before reaching final conclusions. 10 verizon's goals is to make sure it is not held legally fallout fromo the hack . facing a class-action lawsuit filed just an hour after it was revealed. russia moment, japan and agreed on disputed islands.
8:22 pm
8:23 pm
8:24 pm
>> japanese prime minister shinzo abe and vladimir putin or calling a stop to the dispute over ireland's would -- over ireland's which prevented the signing of a world war ii peace treaty. are we likely to see a major development given that this has been festering for years? >> it is unlikely we will see in a huge progress on the territorial dispute. we will see likely business cooperation deals done today. we have heard that there are as many as 65 deals under discussion for possible agreement ranging from infrastructure, energy, to fishing and tourism and health care. japan has pledged to promote
8:25 pm
cooperation with ¥300 billion. we do not know if that is investment or financing or for what. i would expect to see a big number announced at the conferences afternoon. >> big numbers are hoped-for and they missed some last night. do they know anything? yeah, it was a fairly long a meeting, she won a half hours -- two and a half hours, most of which was them and their translators. abe said they would not only 's physical fatigue, reentered rising the talks between the men. energizing the talks between the men. displeased that various spots of japan have u.s. missile defense systems. mr. abe countered that this was,
8:26 pm
these systems are for self-defense purposes, no nation needs to fear them. then they moved on to territorial dispute. that is a trippy -- tricky topic. on the russian standpoint, there is no issue. they took it during the last week of the war, and i believe -- they believe they have a right to them. in japan, it was captured territory that should return. the issue is continuing. we will not get any sort of deal this visit or during the administrations of putin and abe. rishaad: just a quick word on how they have been actually, what is the mood, the reception? >> it has been good. , photos lot of videos of them smiling. abe may be more warmer.
8:27 pm
rishaad: all right, thank you. dimon: up next, jamie with singapore. ♪ generosity is its own form of power.
8:28 pm
you can handle being a mom for half an hour. i'm in all the way. is that understood? i don't know what she's up to, but it's not good. can't the world be my noodles and butter? get your mind out of the gutter. mornings are for coffee and contemplation. that was a really profound observation. you got a mean case of the detox blues.
8:29 pm
don't start a war you know you're going to lose. finally you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. ♪ sophie: this is bloomberg markets asia. rishaad: what we have been talking about has been dollar strength across the board, dollar on the rise after the election of president trump. but the brunt of the damage [indiscernible] higher we are seeing yield in currencies like the ringgit and the rupee up. the ringgit is weakening to a two-week low. the bloomberg dollar pages showing rising. rupee wasnd the having a bad time. looking at what else is going on, europe for instance, it is
8:30 pm
bad for the euro. sophie: since 2003. rishaad: 14 years. we got to the open in hong kong. shanghai is starting up its section. let's go to it now. haidi has got the details. start with the yuan, another bombshell from the pboc. strength inhad 1.2% the dollar index we do know the -yuan iso and -- dollar changing. this is the offshore yuan, 0 -- 6.94 right now. it is falling more steeply. since 2008.akest we did have the editorial come through the state media saying they don't expect to see you on weakness, possibly -- yuan
8:31 pm
weakness, possibly even strength against the basket of currencies. this is what we are seeing reflected in that. looking at other currencies, the other focus being the japanese yen, getting a nice tailwind it comes to the equity session in tokyo. unchanged at the moment, but those will hold a close to 118. this is a nice list of sentiment when it comes to japan. let's look at the open for china, because they had another down day. shanghai down 0.2%, hong kong the same. yesterday was horrible for chinese stocks here, so we are watching those in particular, property developers ensure us that financials are doing badly. insurers, financials are doing badly. rateare raising the base
8:32 pm
to 1% to represent the dollar peg the hong kong dollar has. elsewhere, we are seeing weakness from southeast asia. the all oil and commodity heavy markets seeing a selloff, given the lapse in the oil price and commodities continuing to get back. a selloff extended. australia is underperforming. the nikkei 225 up 0.25%. we are seeing gains from exporter currency sensitive stock. insurance is one of the top decliners we see over there. in terms of what we are seeing with movers, another picture of a somatic trade we are seeing in today's session. mitsubishi motors, gaining on the topics. -- topix. that is something.
8:33 pm
a lot of automakers doing well on the back of the weekend yuan -- weakened yen.. we are seeing declines for sunday. rishaad: let's go to first word news. tom mackenzie is there. singapore exports surged in november after elon it shipments to climbs the most in a year -- electronics declined in the more of the year. the estimates of 12 economists we surveyed had been for 8.7% contraction. electronics exports rose 3.5% in the same time, the biggest since september 2015. wall street banks are about $70 billion short of the funds the fed said they will need to guard against another collapse. though that is down by almost
8:34 pm
half from earlier estimates. the biggest names are required to build custom -- questions that can be transformed into cus y -- christians -- hions. general motors is going to post autonomous vehicles. the first will be in the testing center in orion and expand to detroit. the area will be used for the winter climates. ins vehicles are already san francisco. warren buffett will no longer collected $355 million a year on his dow chemical investments. --y will convert his stick part two common stock. the did this for the term of the 2008 deal. buffett was going to get 8.5%
8:35 pm
dividends when he helped finance the takeover. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. mackenzie, and this is bloomberg. rishaad: thank you. tom mackenzie in beijing. sophie: and currency investors and bond markets are looking at the libel yield curve. malcolm scott is here to explain that. how will this help china in the bond market? malcolm: they are at the short end of the curve, and that is a problem. a reliablegetting gauge out to 10, 2030 years -- 20, 30 years. so we have got this concentration of the short-term as the graphic shows. has some liquidity where it is lacking. it will be 12 market-making
8:36 pm
institutions that work with the industry of finance. they feel that there is not enough supply or demand either way of certain maturity, five to seven or maybe 10 to 15, then they will work with the industry of finance and sort of pop them out or whatever to flesh out and stabilize. rishaad: you answered it for me. i was going to ask about the real economy, and the ability to price risk is crucial. malcolm: it is also crucial for international investors. china once to nationalize the yuan, but you need to park it somewhere. stock market, is it too much of a gamble for people looking for a reserve asset in the yuan? but if there is not a reliable yield curve, that hampers the internationalize asian. -- internationalization. much tothank you so
8:37 pm
malcolm scott. now j.p. morgan chief jamie dimon said their stock several models for what to do right in public property. rishaad: he is the biggest bank of the u.s., saying american leaders could take a leaf out of their books. >> if you travel around the world, and i guess you can see all of these things, singapore does it. it is a country. it was part of malaysia when it was formed, partly chinese, malay, they speak each other's languages. they have the strength to get it done. gdp is now higher than the gdp of the average american. the prime minister is tough. he made them all learn english so they could become good for countries. we have a lot of affordable housing. they made sure that you could buildinglike an indian
8:38 pm
and mla building, chinese building -- he desegregated by apartments. he wanted people to know each other, smelly chadors foods. if i could put my -- each other's foods. if i could put my democratic friends there, they say it would be backwater. you can't mix people or make them learning less. that is what happens. people have to think policy, what works and what doesn't work. and same thing for other countries, i mentioned german vocational schools. germany is doing well in europe and most of the countries aren't. about what people are turning -- you learn about what people are doing. that goes for argentina, cuba, north korea, what did they do that was not popular, and south korea, no natural resources. resources,no natural
8:39 pm
unbelievable story. i'm talking about what works and what doesn't. i worry about bad public policy. in america, you keep on hearing the policy is low, secular stagnation, new normal. it is not true. we have multiple wars. we are not educating our kids. we have government shutdowns, barely spend money, failure in the health system, failures in extreme amount of regulation. that is why we are going slow. it is not an economic model. and people are looking for simple answers, and sometimes there aren't. are these things fixable? rishaad: jamie dimon speaking to bloomberg businessweek. in the big business issue out next thursday, it will be a good read. sophie: china challenges. how the u.s. is affecting the
8:40 pm
country. ♪
8:41 pm
8:42 pm
♪ storieslet's get to top in asia, china treasuries have dropped the lowest in six years as beijing moves its currency reserves to combat out the yuan. how big is this sellout? : enough to see china lose its top stop as the u.s.'s number one creditor to japan. we have a chart that illustrates what has been happening. in the month of october, china's holding of u.s. treasuries fell by 1.3 billion u.s. dollars, 1.2 trillion u.s. dollars, going below japan. that was to the lewis -- lowest level since july 2010.
8:43 pm
it was back in 2008 that china overtook japan as the number one creditor to the u.s., and at some point in the highest point, china held $1.3 trillion worth of u.s. treasuries, but they have been selling those down with the fx reserves as they try to support the yuan, near eight-year lows now. we have seen the fx reserves fall $12 trillion as earlier from $4 trillion to around $3.05 trillion. it was the fifth consecutive fall in the fx reserve. so they are making moves to support the yuan rather than push it lower. this is a trend expected to continue in 2017. as we look attentively more hikes in the federal reserve. rishaad: china has been discussing priorities for 2017 and beyond. talking about some of this later on today.
8:44 pm
will this be the broader agenda? tom: that is right, it is a closed off meeting, but we are expecting details this afternoon. it is top leaders along with provincial and leaders from the government and the pboc meeting in beijing to reflect on policy they put in place and look ahead to next year. and they are in something of a .weep with the economy here bloomberg intelligence saying gdp growth currently is around 7%. we have seen a pickup in demand as consumer health remained relatively robust. we have seen a pickup in outlook and consumer prices, coming around in a stronger momentum. of course there are headwinds with donald trump and his question marks over the one china policy.
8:45 pm
they will try to continue to open up the economy here, try to attract foreign investment, focus on innovation and driving those high-tech sectors, also trying to counsel the outflows and rain those in. those in. in the broader context, there was the communist party conquest and that takes place in beijing, a key political moment where we will see leadership changing, and there is a strong desire and policymakers to see continued economic stabilization. there will be temptation potentially to put the foot back onto the spirit -- the panel. we will get more details. rishaad: thank you. tom mackenzie there. and trump will be figuring in these talks. our next guest says trump's policies may go [indiscernible] joining us is the head of the hong kong strategy at [indiscernible]
8:46 pm
as he was saying, trump needs to take heed of what we are seeing as china is that's top holder -- the top holder. what does that mean? >> you can look at the renminbi, it has depreciated, but it is still close in the basket. you see that federal reserve proportionately to the reduction of u.s. treasuries. rishaad: but they have been defending themselves against the dollar, they are getting weaker. you mentioned they are higher a couple of times. francis: that is the point here. how do trump's policies invigorate the chinese to do more in firms of reform, their enterprises and what they have been trying to do for ages? francis: if you look at where the u.s. is against china, wto, it is overcapacity.
8:47 pm
, glass, thoseinum are the areas where the u.s. will attack china. it will force china to cut overcapacity. gradualsts. are be muchot push them to faster. the banking system is falling because of these have bad debt. sophie: are you expecting acceleration? how do we way that in the balance? francis: a few things are going to happen. overcapacity will accelerate. steel and coal were targeted last year, and we will add more sensors. third, they made it clear he wants to pardon the bigger role in the sle. and would merge more sle have balance in the stronger balance sheet, not necessarily more competitive. are bringing to
8:48 pm
terrible companies together at the end of the day and making one gigantic terrible company. francis: it does not make them more affordable. rishaad: but he does not want to create unhappiness. he wants able to have jobs. that is a tight rope. francis: the working population is already shrinking in population in china. -- in the u.s. it is accelerating. sophie: where are you seeing potential opportunities? you are looking at stuff around the renminbi depreciation. francis: china is under a lot of pressure with the crackdown on property market. if they are doing what they can with infrastructure, but you have seen macau has turned, luxury spending has turned. it is stabilizing. economy.d for the consumption will be a good the next year. rishaad: 2016 was meant to be
8:49 pm
the year of the hard landing. a lot of people did say that. but at the end of the day, the economists see it was just the old economy. and there are stuff that needs to be dealt with here as well. will 2017 change that? francis: not particularly. rishaad: because they are gradual. continueas investments to slow, consumption has been amazingly stable. service, that is no two thirds driven of the growth. it is happening greater but gradual. flags? what are the red francis: the country is slowing flows,erty transaction the renminbi depreciates, you have trade disputes with trump in the first part of the year.
8:50 pm
so the economy, the first part, they will have a chance to stabilize after the chinese new year. it will seem rockier first half, and second half, they lose it up hot 30 -- listen up property -- loosen up property. rishaad: hong kong as well as china -- china and hong kong, what about hong kong in all of this? francis: the risks for hong kong, even when you have china, rising rates, you just put this really egregious stamp duty, 30% to buy property in hong kong, there is a real risk of hong kong property rises. rishaad: what a that generally in retail? it is the life blood of this economy. is there recognition this is on the cyclical down from woodward francis: i have been suffering,
8:51 pm
but with [indiscernible] the jeweler, and they are seeing things. for them, china would be probably positive. hong kong is also starting to follow this trend. we have seen some signs is getting better. sophie: thank you very much. francis john, from cls a. rishaad: driving opposition to move against mystery. we have the latest on this board room fight. ♪
8:52 pm
8:53 pm
♪ rishaad: quick check of the latest business headlines, 20th century fox has agreed to buy forremaining stake in sky $46 billion. it will pay over $13 a share for
8:54 pm
the 61% london-based flight carrier. newspapersaled hacked into the celebrity and politician phone numbers. the dollar is making it cheaper for rupert murdoch to act. sophie: jpmorgan looking to sell bonds online to cut costs. they have hired ibm to make a website that could be launched as soon as the middle of next year. -- profit has been slashed by low interest rates. rishaad: india's city tax should be able to run on at based platforms. -- app based platforms. they should not rid of traditional cats. they were close to winning regular preapprovals in india. strikesers have staged in protest.
8:55 pm
sophie: sticking with india, it is shaping up as a key battleground for the control of the biggest conglomerate. they want to force cyrus mystery out. we have more. rishaad: conglomerate. reporter: i will try to explain this because it is very complicated. let's talk about the foreign investors. two american advisory firms are recommending against investors against voting for the ouster cyrus mystery. some of them want to keep him. this is important because foreign investors have control of 18.5%. tata motors is not the only, you have five other listed companies that are voting in the general beatings. the automotive unit is a particular point of contention right now with mystery supporters claiming one of their
8:56 pm
projects was to produce the world's cheapest car, but it is a drain on resources. right now we have tata motors taking over as chairman, $100 billion business. he is the scion of is this family -- business family. we are hearing from local media he is likely to step down as chairman of the tata trust, a philanthropic organization. some people have speculated as being add device to control the group. they now control 66% of tata su ns, which is the holding company. there is drama, they are trying to out osiris mystery, they are trying to do that. right now voting is going on. sophie: it sounds like days of our lives. rishaad: we will talk about this later as well. thank you for that.
8:57 pm
shery ahn. sophie: ahead on bloomberg markets, no longer the jewel in the ground. macau is at stake. ♪
8:58 pm
8:59 pm
♪ rishaad: it is almost 10:00 a.m. in singapore, and 9:00 in the evening and new york city. i am rishaad salamat. sophie: i am sophie kamaruddin. this is "bloomberg markets: asia." ♪ rishaad: the dollar dominates as traitors shun safety, gold slumps, and the 10 year yield turns positive. that pboc weakest fixing since 2008.
9:00 pm
they are talking territory in , cooperation over four disputed islands. looking at the equity session, of full market report on the way. the greenback dominating headlines, the bond rout continuing, 10 year jgb yields and positive terrain. sophie: probably not quite liking that development. rishaad: the yen at 118 at the moment, and that weaker fixing 45 minutes ago. sophie: let's take a look at what is going on in the markets, trading in indonesia underway. juliette: as you say, the main story is this dollar strength. that means yen weakness. the nikkei the front runner, up
9:01 pm
by .6%, the nikkei and topix trading at highs. you are seeing solid support carmakersough from continuing on that rally with the likes of mitsubishi and mazda leading. weakness and hong kong, concerned that higher rates in the u.s. and with the hong kong monetary authority in pursuit could push the yuan weaker and push into chinese corporate profits and real estate, which is where we have been seeing weakness. higher and reits bank stock stronger. weakerave the won against the greenback. some gains in new zealand, one market underperforming. today up .9%.
9:02 pm
next across the southeast asian equity markets. having a look at currencies, the won continuing to fall, the biggest drop against the dollar, down another .4%. you are also seeing weakness in the offshore renminbi. to pboc weakening the yuan the weakest since 2008. by --bi the offshore down the offshore renminbi down by .1%. japan 10 year bond yields rise to the highest since january. a little bit off there, but movement in this bond yields today. rishaad: thanks. weakening toe yuan eight-year lows. the fed striking that hawkish
9:03 pm
and, china's ability willingness to control the yuan depreciation is the focus of emerging-market investors. sophie: what is beijing likely to do? have allowed a steady depreciation against the dollar. traders and analysts are asking how much they will allow it to depreciate. goldman sachs yesterday in a lesssaying fear of the predictable depreciation of the currency against the dollar is definitely in the market, and the biggest risk in 2017. now that we know the hawkish tone from the fed and maybe three rate hikes, what is china going to do in response? them burning through $279 billion in reserve managing this slow depreciation.
9:04 pm
again, the currency fell .6% yesterday, weakening slightly, although the fixing rate was set weaker at 6.905. rishaad: is that where we are trading at at the moment? >> it is trading pretty flat. again, indicating that they don't want it to depreciate too fast. it is dangerously close to that -- so you're getting up toward seven, which some say is the line in the sand. be 7.3 or 7.2 by the end of next year. >> we are talking about this year, could it breached seven? sophie: there will be emphasis on what china does. what are they saying? a and news agency publishing
9:05 pm
series of six commentaries on the subject. publishing agency series of six commentaries on the subject. house prices are not expected to rise sharply or see fluctuations in 2017. it will not have a big impact on the market. the yuan will depreciate against the dollar. rishaad: they said that? >> they said that. managing expectations, and they don't want the outflows to continue. the other reason why we are seeing depreciation is more pressure against the dollar. >> absolutely. the currency leading the outflows and the outflows leading to the yuan depreciation. rishaad: th vicious circle.
9:06 pm
>> the chinese should not exchange the yuan for u.s. dollars. when theying the days united states sneezes and the rest of the world catches a cold have gone away. sophie: thank you for the update. let's get to first word news with shery ahn. shery: singapore's exports surged in november after shipments climbed the most in a year. exports roseic 11.5% from a year ago. the median estimate of 12 economists had been for a two contraction. the biggest increase since 2015. the times of india says that ratan tata may step down as the proxy fight with cyrus mistry
9:07 pm
intensifies. the trust were set up as a charitable organization, but 66% of tata a majority will be needed to remove cyrus mistry, and some foreign investors have questioned him. missedfell after sales on estimates. revenue last quarter was little changed from a year ago at $9 billion. that is slightly below forecast for $9.1 billion. sales were dragged down by a decline in new software licenses. and russia have agreed to cooperate on the running of four islands annexed by the soviet union at the end of world war ii , a divide that has prevented the two countries from signing a peace treaty.
9:08 pm
the plans include medicine, tourism, and fishing. beijing has issued its highest pollution warning of the year. heavy smog as expected through the weekend. a similar alert about a year ago saw air pollution at the u.s. embassy 36 times above internationally accepted safe levels. shanghai has issued a similar warning, currently eight times above international levels. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: we are going to look at izon having second thoughts of its acquisition of yahoo! after it admitted a second major security breach. ramy inocencio sent us this from
9:09 pm
new york. verizon is looking for a price cut are a total exit. cut, ouris a price gadfly reports that markets are betting the deal price could fall by $1 billion. therue, that would make acquisition the most expensive in internet history. two teams are working to prepare for any outcome. one team is focused on integration with yahoo!, led by tim armstrong. another team focused on promoting the severity of the by verizon's general counsel. they are also exploring next step options. to assume thele
9:10 pm
breach has had a material impact on the deal, and we are seeing a share price hit. yahoo! shares plunged by more than 6% thursday, the biggest fall since january. that translated to a market cap loss of $2.4 billion, yahoos biggest loss since may 2015. still, the tech company has putting a strong phase forward saying, "we are confident in yahoo!'s value and continue to work towards integration with verizon." verizon says they will review the impact before reaching any final conclusions. one of its biggest goals is to make sure it will not be held legally liable for damages from the yahoo! hacked. yahoo! is facing a proposed class-action lawsuit filed hours after it revealed as many as one billion accounts were breached. , packing all ahead
9:11 pm
punch in the mixed martial arts market. rishaad: next, japan makes moves to legalize casinos. we will discuss whether it is bad luck for other asian gaming markets. ♪
9:12 pm
9:13 pm
sophie: a quick check of the latest business flash headlines. the former number two at the lotte group is confident he will clear his name. he spoke to bloomberg about his plans to pull off the takeover and criticized the group's direction. to become leader, i would change the current corporate altar that makes profit and sales a priority. i think we should be a company
9:14 pm
that aims to win the trust and respect of our customers. my next goal would be to justify my position at the shareholders meeting and win their support. continuing to get rid of its non-core assets, a greeting to sell its this is to fujifilm. fujifilm has diversified into health care devices, medicine, and copy machines. let's have a look at shares in tokyo, and there we have it, little movement. takeda higher. may takeakata says it more time before deciding on a buyer. the bidder will only be named in the january to march quarter. ata was hoping to find a buyer by the end of the year. japan's parliament
9:15 pm
passed a bill legalizing casinos this week, opening the door to billions and investment after years of political wrangling. our next guest will be talking to us about how this could turn japan into a major gaming center. he is head of asia-pacific gaming at bank of america merrill lynch. thank you for joining us. it could be an absolute, pardon the pun, game changer. >> yes, definitely a game changer. we believe that this bill will lead to a multibillion-dollar industry creation. the size ofen japan's gdp and potentially we will have two casinos in the major metropolitan areas, we expect this industry, the future gaming industry, will start with 10 billion, and potentially after a couple of decades, $40
9:16 pm
billion. will take 6-7 years for japanese casinos to open, but in the lead up, how will this impact other regional casino hubs? say, it takes 6-7 years at least. the near-term impact will not be significant, but it will create a ripple effect, meaning will other countries thinking about changing, also liberalize casino building and other places like korea. as of now, they only allow locals to gamble, so we will see if they want to be more aggressive and open up. if not, how we see that in the long run is that the korean casinos will feel more pressure. about one third of their customers are coming from japan. rishaad: no doubt, macau would also feel the pressure.
9:17 pm
does this have the capability of supplanting or taking on macau? be a different market. of course, for japan, it will be backed by consumer demand. -- they are planning to build one casino in one city. strip, 30you have the casinos in one setting, so at the end of the day, we do think there will be chinese demand going to tokyo or other casinos, but when we do the math, macau is $30 billion. by the time tokyo or yokohama or
9:18 pm
osaka open their doors, we believe the market size for macau will be exceeding $40 billion, but the business going to japan from china, $2 billion to $4 billion, and half of that may come from a cow. we are talking -- come from a macau. we don't think the impact will be significant. sophie: we have players saying they want to invest in japan. foreign partners will have to have a local partner, for example. >> the direction is going to be -- first, we think the japan government will like to use the foreign operator experience.
9:19 pm
not just gaming, but experience in handling the integrated resorts. strong,panies are very so they will have advantage. on the japan side, of course there are also a lot of the industry that can participate, real estate companies, construction companies, media companies, entertainment companies, because for an integrated resort, you need a lot of different elements. ip content is important. casino,ck how to run a if they have experience for the foreign operators experience operating casinos in different jurisdictions, that will be a plus. rishaad: why is this taking so long to get passsed? it seems quite timid as well. again, not just
9:20 pm
japan. always when you go through legalization of casinos, it is controversial because there is always some worry about the social part associated with that, but if you look at the economic benefit, it is almost a no-brainer because you see we are talking about creating a multibillion dollar industry that will help the employment, help tax revenue. it will help the tourism industry. if you look back why it takes time, more and more people realize that if you look at the , a successful model, it revolutionized the tourism strategy for singapore. impact, ineconomic particular in the tourism industry, it is enormous. sophie: integrated resorts is the way to go here? >> yes.
9:21 pm
overall -- rishaad: with all the social costs, you would have thought they learned a lot from that. >> i think, again, yes, that is why maybe it takes longer for japan to think about this initiative, because they look at the particular industry and probably focus a bit more on the adverse effects from the casino industry, but again, if you look at the new generation of integrated resorts, it's like most of the elements are non-gaming, and most of the people going there are family type of customers, and if you have the right regulations, you can really limit the crime effects, the potential gambling problem, but again, integrated resort is the way to go. at singapore, when
9:22 pm
they introduce casinos, they are bringing casinos, theme parks, garden by the bay. lots of plans in the works, it seems. thank you very much. rishaad: right, up next, crown , have they played a winning hand by slashing its stake in its macau casino? ♪
9:23 pm
9:24 pm
sophie: crown resorts surging by the most in a month in sydney. stake ass more of its the company looks to bolster its cash balance. what is going on? one of the things that is strange about what is happening
9:25 pm
is what you have seen is the sort of thing companies do when it is short of cash. casino company in the world judged as investment grade by major ratings agencies. as you can see, they're racing $1.6 million from selling the shares and melco crown. the chairman has about 60% of the shares. something youusly would do because you are short of cash, and in that sense of little confusing. rishaad: why now? are they that negative when it comes to macau? of are theyuestion going negative or is the world going negative for them. crown employees and china were detained in
9:26 pm
connection with an investigation into a legal marketing of gambling activities. this is a shady and difficult area. crown depends heavily on these pip highrolling gamblers coming to australia to play. they said in a statement yesterday, turnover, the wages from those players, was down 45% in the first 23 weeks of this year, a dramatic drop-off. it is bad when you consider some of the projects coming up. working on aey're $1.4 billion hotel casino 2019ct due to open in catering exclusively to highrolling gamers. you have a problem there. if the high rollers are not coming in now, how do you finance that building? who is action going to stay there? sophie: thank you so much for the update. rishaad: quite a dramatic backdrop as well.
9:27 pm
we will talk david a bit later on. a key battleground in the fight .or control at tata motors that is on its way. ♪
9:28 pm
9:29 pm
begineral motors to testing autonomous vehicles on public roads and michigan. the first cars will be seen on straits around the testing center and will expand to detroit. the area will be used for the development of the technology and winter climates. ons autonomous vehicles are the roads in san francisco and scottsdale, arizona. 21st century fox has agreed to buy the remaining stock and sky for $14.6 billion, paying just over $13 a share for the 61% that it does not own. a previous deal was derailed in 2011 after it was revealed that
9:30 pm
two newspapers hacked the phones of celebrities and politicians. nintendo down a day after its first foray into mobile gaming despite super mario run being the number one download in the u.s., the u.k., japan, and germany. a research firm super data expects the game to reach 30 million downloads and bring in $60 million in its first month. leaptdo's share price when it was originally announced. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. sophie: this is "bloomberg markets: asia". i am sophie kamaruddin. rishaad: i am rishaad salamat. what is going on? of the packe leader come up as it heads into that
9:31 pm
lunch break it the story is about dollar strength -- into that dollar break. it is a story about dollar strength. you are seeing a boost from automakers, electrical appliance goods makers today. elsewhere, looking good, some mixed movement from southeast asian markets. emerging-market currencies gaining, and some markets under pressure. australia looking good, up by .1%. new zealand up. after a shaky start, some upside in hong kong thanks to our rise in energy players and consumer stocks getting a bid. we have the shanghai market up by .1% as we await the outcome of talks in beijing. some upside in that market.
9:32 pm
some of this pacific stocks in the region, santos was trading lower, but unchanged. it felt almost 10% yesterday as it announced that capital raising which surprised many in the market. to has revised its outlook stable from negative. gold stocks under significant crest miningw down 6.5%. paul was mentioning nintendo coming under pressure. this is due to the fact that even know we know the super ,ario game has been popular there has been concern about nintendo's revenue and a lag there. quite a bit of worry in terms of how it will move forward once the phenomenon around the game
9:33 pm
wears off. having a look at the yen, still , 118.24.own .1% they are expecting to see the dollar pullback after the strong rally. sophie: thanks. , holdings of u.s. treasuries have dropped to the lowest in six years as beijing uses its currency reserves to prop up the yuan. how big is that selloff? selloff fromllion september to october. it is about the dollar play. what it means is that china is no longer the number one creditor to the u.s. that mantle goes to japan. it is the lowest level since july 2010.
9:34 pm
cast your mind back to 2008, when china overtook japan to become the largest banker to america. at the height of its holdings, 1.32 trillion dollars, causing angst in washington. story ofs into the china pulling down reserves to support the yuan at that eight year low versus the dollar. we have said on this program how the reserve has gone from $4 trillion to three trillion dollars in november, the fourth consecutive month of falls in reserves, and we expect the trend to continue in 2017 with more fed rate hikes throughout the year pushing up the dollar, pushing down the yuan. rishaad: china's leaders are gathering in beijing at the moment, discussing the priorities for the year ahead and beyond.
9:35 pm
what are they talking about? details are sketchy, but what is the agenda looking like? tom: we have just had a few lines crossing from the government talking about how they will continue to offer funding to this deal and coal , restructuring companies in that sector, including using debt to equity swaps. we expect more details today, including regional, provincial governors, as well as heads of state owned enterprises. some of them will be giving each other slaps on the back over how the economy is performing. the consumer remain strong and producer prices have strengthen, but there are headwinds, debt is a crucial one, as well as the policies donald trump may impose. policy makers will be looking ahead at how to open the market, attract foreign investment and
9:36 pm
to try to cut back on excess capacity in the various sectors. of warningeen a word from mark williams at capital economics around the optimism in the chinese economy, saying it may be overdone, this growth, which bloomberg puts at 7%, may not be sustainable going forward. weis worth remembering that do have this communist party congress next year. there will be temptation policy from lawmakers to resort back to stimulus if the economy slows. they want to see economic stability ahead of that event, so that is a risk as well. we hope to get more details later today. one, sophie: let's get the latest on a public spat in india. group facing opposition and
9:37 pm
its plan to force out cyrus mistry. what is the latest? >> two american advisory firms are recommending investors d reject the vote to oust cyrus mistry. motors being one of six companies under the tata brand that are asking investors to choose whether or not to oust cyrus mistry. ratanterim chairman is tata tata, a psion of the founding family. isrelated news, ratan tata likely to step down as chairman trust, which is a philanthropic organization, but some suspected as a tool to control the tata group.
9:38 pm
sons is the holding company of this conglomerate. what is going on with the family? where do they stand right now? >> it is a complicated spat between two families. the founding family as not stepping back. sources are telling us that tata arranging calls toin .ust cyrus mistry also revealing they bought an additional 1.7% of tata motors to boost their position. sophie: if the family was to move, what could they do? >> they will still try to push out cyrus mistry from the business. they could be pulling the tata
9:39 pm
brand from being used. couldlso signaled they with draw financial support for those units that fail to oust cyrus mistry. sources say they are considering boosting their stake in those companies and calling and another extraordinary meeting to carry out another vote. rishaad: shinzo abe and vladimir putin a greeting to cooperate on four disputed islands. they don't have a peace treaty. we are there and tokyo. how important is this meeting? this has been festering for years. it will be a tall order, but could we see a major development emerge? right, i think it depends on how you define a major development. this dispute has been going on
9:40 pm
for 70 years. the two countries have not been able to sign a peace treaty in that time. prime minister shinzo abe be has put effort into trying to improve this relationship. is unprecedented about his move to invite president putin and meet him in , showering himg with gifts and local delicacies and build on the friendship they have had over the last summits together. they are talking about economic cooperation on these four islands, which are disputed between them. is still making clear that these islands belong to us and cooperation will be on the basis of russian law, so it depends on whether you look at that as a glass half-full or glass half-empty. sophie: do we know about what was discussed? well, they met for five
9:41 pm
hours in total, despite the fact that president putin arrived late, which he is notorious for doing. atmosphere seems to have been extremely warm. they discussed a range of issues , particularly in the one-on-one meeting, they talked about how to reach this peace treaty. discuss wasd not actual sovereignty of the islands. what will be on the menu for today is economic cooperation and a further round of talks taking place in tokyo. the receptionhas been like for vladimir putin? what is the mood there? how has the response been since his arrival? a huge amounteen of excitement. the japanese media has gone crazy over his visit.
9:42 pm
there have been lots of television specials about putin. media interest has been in norman us, so hundreds and hundreds of reporters and southwestern japan trying to find out eagerly what is the latest. a little strange, because if you look at japanese opinion polls, you see most people don't expect any major progress on the issues, so a little bit of a mystery. rishaad: thank you a lot for that. ofnext, we will ask one asia's largest sport media companies what it takes to fight your way to the top. ♪
9:43 pm
9:44 pm
rishaad: a quick check of the latest business flash headlines. iron ore prices allowing
9:45 pm
fortescue metals to cut debt, and swelling profits. fortescue metals will save $38 million in annual interest. fortescue metals the best performer on the msci asia index so far this year. another good day, higher. buffett will no longer collect 200 $55 million a deal on his dow chemical -- two hundred $55 million a year on his dow chemical investments. collect $255 million on his dow chemical investments. india says that operators must not undercut
9:46 pm
traditional cabs. it will be welcomed by uber and its rival. traditional cap operators have been striking in protest. china's sports industry is expected to be worth over 400 billion dollars by 2020, so it's no surprise everybody wants a piece. rishaad: that includes one of the largest asian's boards media companies. our next guest runs it and recently moved to china to develop day-to-day operations. he joins us now from shanghai. give us an idea. over a year ago, how have things gone? >> it has been a phenomenal year. we have expanded our in events, gone to new countries we have never been to before, continue
9:47 pm
to hire aggressively. we just opened an office in shanghai, hired a new president in japan. he was with sony before that. year foren a fantastic us, and 2017 is shaping up to be a bigger year. sophie: the licensing and getting eyeballs when it comes to the viewership you want, how is that working out for you, especially as you look into more territories next year? >> one of the things that continues to drive media around the world is live, and live sports is key. we are the largest producer of live sport across asia. we just announced events for the 2017 calendar, and will announce further events and venues in the coming months. we are producing the most content across asia,
9:48 pm
broadcasting to 118 countries and one billion viewers worldwide. rishaad: is it because you have managed to localizer content in a way? what is uniquef about one championship this we are building local heroes. local fans that follow our heroes regardless of where the event is held, whether macau, beijing, shanghai, singapore, malaysia. we have fans all around the world. , a next chinese superstar world champion from the philippines, our singaporean world champion, these are stores that people can legitimately wallow in asia. decades int 2-3 asia, we have not had a lot of asian heroes. one championship is building these heroes for fans to follow. sophie: that is part of the
9:49 pm
drama and flair, but what is allowing you to garner respect when that does not seem to be the case for ufc? well, i think i can only focus on what one championship is good at. if you look at how the sport of mixed martial arts is portrayed in the west, it's about arrogance, trash talking, getting in the face and disrespecting your opponent. the values we hold true in asia , oned martial arts championship talks about the honor,of respect, integrity, loyalty, hard work, dedication. these are the things why parents continue to enroll their children in martial arts, because we know those values are true to us. those are the values our
9:50 pm
athletes espouse and what one championship shares with our viewers around the world, and it's one of the reasons why we have some of the biggest brands in the world working with us. the list goes on and on. these are the things that resonate with our audience. are still kicking the -- out of each other? >> that's true. it is a common misconception that that is the only element of the sport. of course it is a combat sport, but you see two athletes at the highest skill level of their life, dedicating their life to martial artsmart that want to chums themselves of the sport. themselveschallenge to the highest level of the support. after going to war for three rounds, they embrace and take a
9:51 pm
selfie and say thank you to each other, thank you for giving me this opportunity, thank you for letting me showcase my skill set. they bow to the corner, out to the coaches, and it is a strong reflection of the spirit of martial arts. sophie: there you go, branding the sport. rishaad: great to see you again. right, if you think athletes aren't too much -- some are jumping even higher on the pay scale. deal is a tentative new for the nba that will boost the average salary by 63% to $8.5 million. next, a copper wire studio,ying a hollywood taking over the chicago stock exchange. andook back at a weird
9:52 pm
wacky year and chinese mergers and acquisitions. ♪
9:53 pm
china'sthe longer acquisition continue, the stranger the deals get. let's get more.
9:54 pm
why are these chinese companies buying into these assets? >> there are several reasons. are, of all, maybe they they want to revamp the existing business line. may be the main business is not doing so well. they want to inject some new potential growth. the other reason from people we talked to, they were suggesting that it is a hedging of the further depreciation of the renminbi by buying overseas assets. rishaad: a copper company buying a hollywood studio? if you're going outside your core competency, that's going to be a problem, isn't it? they may be overpaying in the first place because they are getting into a foreign market and a new sector, so they may not have good knowledge.
9:55 pm
problem,on is another both culturally and geographically. a sufficienthave amount of talents to run those businesses. these are the concerns. sophie: there are curbs being put into place. how could this affect things going forward? >> we would not be able to see more megadeals like the chemchina deal this year, so we may have more smaller deals next year, and they might look within because europe, germany, they seem to have stronger scrutiny against chinese buyers. sophie: it comes down to asia being more of a playground. >> yes, definitely, and chinese buyers can be more creative in terms of structuring those. sophie: thank you for that. haidid: ahead, angie and
9:56 pm
will be updating you. saga continues, reports that ratan tata may be stepping down as chairman of tata trust. mumbai,take you live to and from mumbai to macau, a selloff for crown resorts. then from macau to markets, mark macfarland about china and u.s. protectionism. this is bloomberg. ♪
9:57 pm
9:58 pm
9:59 pm
10:00 pm
new york ity, this is charlie rose. charlie: we begin looking at the rise in the federal reserve interest rates that took place on wednesday, the first time in a year. the second rate hike in the last decade. the fed signaled that rates could continue to rise next year more quickly than officials had expected. the move seen as a gesture that the fed is confident in the strengthening of the u.s. economy and potential signs of rising inflation. janet yellen addressed the path ahead taking into account that uncertainty about the economy will dictate future policy decisions. janet yellen: we are not behind


info Stream Only

Uploaded by TV Archive on