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tv   Bloomberg Markets Asia  Bloomberg  December 13, 2017 8:00pm-9:00pm EST

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haidi: the dollar is down as the fed offers a more tempered view on growth and inflation. the aussie jumped, slashing expectations. 61,000 new jobs created last month. pump up the volume. one of next year's most anticipated ipo's may be music of tencent of -- ear investors. welcome to "bloomberg markets: asia." it is 9:00 a.m. in hong kong. it is the day of passing the
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fed, if you will. have got to because the federal reserve. this is janet yellen's last policy decision. a wide-ranging set of views including those on bitcoin. a speculative situation. when it comes to monetary policy, three hikes expected for next year. it seems to economic growth, but inflation, the mark. question we are about 30 minutes out from the open in china and in hong kong. david, a bit of a mixed picture when it comes to the equity side. we are seeing the dollar maintaining those losses. david: we welcome to a substantially weaker u.s. dollar. that actually showed up.
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i'm going to tie it together with the aussie number you mentioned at the top of the show. have a look at the move down in the 10 year yield in australia. here is the pop we got 30 minutes back because of the swell and jobs data that came out. the haidi's point, we are looking at a mixed picture. currencies are counter productive. co-relation is quite clear. back to the jobs number in australia and just to show you how 2017 has really been a very good year for job creation. here is the actual number, your estimate. it is beaten so far. this takes you all the way to december of last year. nine of the last 12 months, that is the actual numbers coming in much better. it tells you something about forecasts. that is another conversation.
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china, hong kong, manila, still closed. half of 1%. and industrials, leading those -- that index higher. i'll visited to that at the top. strongertting a japanese yen, so that bodes well for markets. have a look at markets over in sydney. 51% higher for the market. in terms of stock movers, let's see if i can get that up for you. within the nikkei 225, we are , and one of the big movers to the downside across the asia-pacific, we are down for a second straight day, very sharp drop in shares, and a back to thecomes court decision that took place yesterday. there we go. that is down 6%. 8.5% yesterday, and the big picture is this, right?
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you had the march 2011 earthquake in japan and obviously, in terms of nuclear far as power generation from that part of the energy mix was concerned, dropping substantially. they had to import a lot of it energy imports, of course, only very recently, because of the economy going well and the pickup in exports. we have started to see this turnout a little more surplus. if this continues, perhaps commit it does not bode well as far as the bigger picture in japan is concerned. very quickly have a look at this. 5236 on the back of that. fairly significant decision. haidi: one of the big movers to the downside today. david them a thank you so much for that. let's get you caught up today with first word news with radio and send zero -- with ramy inocencio. ramy: they are very close to a
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compromise in tax legislation. that as republicans tried to have a bill signed into law before the end of this year. bill would be an historic victory, but its passage has been clouded by the alabama election results. democrats want to vote on the bill, delayed until doug jones is sworn in. theresa may suffered a serious blow to her brexit plans as pro-e.u. conservatives defied it in parliament. they voted to change the government's bill, in shining the law into legislation so parliament is guaranteed a vote on the final brexit deal. this gives him he's the potential power to veto withdrawal treaty. on the continent, germany is expected to move even closer to a revived grand coalition today after opening talks between chancellor angela merkel and social democrat leader martin schulz. the cdu and spd saw huge losses in last september's election,
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and that prompted schulz to go into opposition. the collapse of the talks with the greens and pro-business free democrats made him reassesses party's stance. and we may soon see change at the top of ubs's $1.3 trillion wealth management unit. sources say president urich silver is preparing to step down and news may be announced later this thursday. wealth management is a key profit driver. the divisions earnings rose more than 16% last quarter. and the long-awaited disney fox deal is expected to be announced later thursday. sources tell us 21st century fox will keep its real estate portfolio, and that includes a 20th-century film and television loss when it sells a chunk of asset to disney. we are told fox will spin off the assets it plans to keep, with disney acquiring the studio. the international assets, all in a deal valued at $60 billion, and that includes debt.
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powered by more than 2700 journalists and analysts in 120 countries, i am ramy inocencio, and this is bloomberg. haidi: thanks for that. the federal reserve raising rates was widely expected on wednesday, signaling the more rate hikes in 2018. will the gop tax cuts change the broader picture? here with somes analysis. kathleen, this struggle between growth, inflation, and how much does tax change that? kathleen: this is something the fed reserve is watching closely. at this point, still downplaying it pretty much. they came through as they said they would, the consensus. the majority says one more rate hike. remember how many times we heard that? it stands at 1.5%, a range from % to 1.5%.
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they updated their summary of economic projections. that is where these dot plots come from that we are showing you now. , second from the left of your screen, six dots go read across. that is the consensus. you can see this dispersion. people, dribbling down there, looking maybe for two or less. what is driving this? it boosted the forecast a bit for 2018 and 2019, putting together 20.8%. they see a medium-term far away from the inflation target, eventually going to rise. let's listen to how janet yellen summed up the forces driving them now. chair yellen: compared with the projections made in september, real gdp growth is a little stronger. the unemployment rate is lower, and inflation is essentially unchanged. participants generally identified changes in tax policy
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as a factor supporting this modestly stronger outlook, although many noted that much uncertainty remains about the macroeconomic affects of the specific measures that ultimately may be implemented. >> we don't know what is going to happen. fed is going to wait and see. one thing she did make pretty clear in her prepared statement and in answers to questions, the fed expects labor markets to remain strong. eventually, wages are going to start writing. that is the consensus now. is not consensus is looking up the dot plot, how many heights we get next year. some are looking for as many as forbidding. the fed is looking to an outlook for three. the bond market sees two. why are we seeing this discrepancy happen? kathleen: it has to do with inflation and how much tax cuts will boost growth.
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the president of the chicago fed, charlie evans dissented. he has been saying "what's the rush?" rising, neelis kashkari is saying they are hoping to hold it down. #btv 711 shows you what we are talking about. you are going to see a yellow line joining the target. pce core year-over-year, 1.4%. the blue line is the core cpi, not the main gauge. an important inflation measure, 1.8 year-over-year, pulling the other measure higher. it went back down to 1.7. it is moving in the wrong direction. we spoke to vince reinhardt, former head of the division of monetary affairs at the federal reserve board of governors. i asked him if the tax cuts take hold, could that affect said
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policy? he said most definitely, especially as it comes to the dot plots. >> it is not three, maybe four. they came into the meeting with a good bit of momentum in the economic data. releases have outstripped economist expectations as much as they were weaker in the middle part of the year. kathleen: combine the uncertain tax cuts, but certainly, it is people helping growth at least a little. that seems to be the consensus view of the fed. the growth lately -- interesting that janet yellen said it will not create a gigantic increase in growth. a lot of people want to wait and see before they have this really translate into any policy moves. if the republicans are right and we get a big boost in jobs and growth, you can see how it could affect the fed a lot in 2018 and 2019. haidi: it could maybe turnaround really quickly. of the ecb, the s&p, we
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also have before that in asia, the philippines, and indonesia, not expecting any moves in terms of following the fed. kathleen: overtime, we will see how that plays out because the my the fed hikes, the more this will resonate in currency markets and bond markets, etc. they are seen holding their key rate at 3%. they have strong gdp. inflation coming up a bit, but still at a below target rate. growth andjoy the the fact that inflation is still so low. think indonesia, the biggest economy. aty will hold their key rate 4.25%. even with the fed hiking now not in a big hurry to move. economists divided if in 2018, we will see them starting to erase the cuts, make a rate hike. others saying inflation will remain low. maybe, they will see in need to do that.
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for now, everyone sitting tight. they will enjoy the end of the year, the holidays, the new year, and see how the economy plays out next year. haidi: sitting pretty. i that janet yellen will have her call missed christmas in years -- calmes christmas in years. kathleen, thank you so much of that. china is coming in line with the sound of music. we are going to take a look at who is winning the ratings race. up next, three is the fed magic number for next year. we will be discussing the prospects of more than three with akzo. this is bloomberg. ♪
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chair yellen: in this strong labor market, where many firms are having difficulty finding qualified workers, you would expect just normal demand and supply a channel to cease upward
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pressure on wage growth over time. haidi: of course, that his job janet yellen remaining optimistic -- that is janet yellen remaining optimist it. up next, our guest joining us. i want to frame this in the context of what the markets would have taken away from the final fed decision for janet yellen as well. i want to bring up the quick chart on the bloomberg. the most talks about buying the dips since 2002. we have these little pullbacks. not real corrections over the past few weeks as prospects for tax reform may be seen to stumble a bit. given we still have the struggle between growth versus inflation, we can a for the fed cannot be in any hurry, to be more hawkish than they are now, does this goldilocks scenario where investors just by each subsequent dip continue?
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>> to some extent. i think the important thing really for investors, particularly investors in asia, is the fact that what the fed does does not really matter to us in terms of what stocks we are going to buy, what sectors we get exposed to. it is really what is going on in china. the fed, the important thing of the fed is what it does with its unconventional monetary policy. if the fed starts to fully withdraw from unconventional monetary policy, that will have some impact in the financial markets themselves. we are not in asia thinking that what happens to u.s. employment will affect the companies we are buying, but we are thinking what happens to the shape of the u.s. yield curve? volatility? those sorts of structural issues as the banks withdraw from 10 trars of altra-altra -- ul low monetary policy? what matters is how the landscape changes in the
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financial markets against the background out here in asia, where it is all about china. haidi: i mean, i suppose, two aspects. how much does it have to change in order to reverse its wash of liquidity rise, and then the other question can also be how do you see asian central banks reacting to that? ben: the thing about the liquidity is it is all sat there. the fed has inflated its balance sheet massively, and the private sector has got an awful lot of cash, as we know, but none of it is moving around. it is the velocity of circulation money that we are watching most closely, and i believe the fed is, two. -- it oo. -- is too. we kept saying if unemployment does this, the fed will raise interest rates. they have not done it. why?
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the fed are looking at the western economies and say we are not seeing real wage growth coming through. we are not going to kill it us in as it appears. what we are trying to do is normalize monetary policy. for an equity guy in asia, the fed normalizing monetary policy is a background noise to what we are looking at. much more important is what is happening to the chinese middle class, bigger than the whole population of america, and out there with 10% real wage growth, on stuff that people in the west want. they are driving prices higher. inflationary cost us in asia i think is going to be an added complication for the west, who don't necessarily have strong growth themselves. we are seeing that is a is no longer supplying goods. it is now supplying extra demand. you think of the size of china, growth in china, you are adding to the world economy every year. indi: we will get to china
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just a moment. i can tell you really want to talk about it. before we leave, you mentioned one thing they look at is the yield curve, and this is one of the themes of this year, the flattening yield curve. more and more strategists talking about potentially, you know, the spread between the five and the 30 and the two and 10 immersing. one of the things janet yellen said overnight at bloomberg asked that i thought was interesting, she almost was like "disregard this as a predictable indicator of an upcoming recession." she is putting the blame on lower term premiums. is that a good explanation? should we pay less attention to this? mark: one of the issues with the way we look at yield curves is we have the kind of mental models they are all telling us about forecast inflation since i want, but mainly, they tell us about the structure of the market. the fed, and this is something i mentioned before, the fed have
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been buying back mortgage-backed securities. when the fed do that, they do not hedge, so in other words, the fed are no longer buying the mortgage-backed securities, and the traditional buyer will come actually have to hedge their duration. what that means is we are likely to get more volatility at the long end of the yield curve and likely get some increase at the long end of the yield curve purely from the hedge -- that sounds esoteric, but it is one of the reasons we have had such low volatility, and people have looked and gone that this must be about the economy. awayr me, as the fed steps from doing things like that, we will see some moves in yield curves that will confuse people. i believe people say that is all economics. it will not be, but it will have not on effects because remember, the whole world is out there, short volatility as a way of making money.
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the last time we saw people doing this was 1987, and that delivered a technical crash. for me, the biggest risk is the fed moving away, volatility taking up, and all the structures that everybody believes are super, super safe, low volatility structures, suddenly tripped themselves up. you get some kind of market event where nobody was looking, so that is how i am thinking about the fed. haidi: thinking about whether volatility will pick up next year. stay with us, mark tinker. we can catch up with all our interviews using our interactive function, tv . you can check out on us live. you can send us some instant messages during the show as well. this is a function for bloomberg subscribers only. stay with us. this is bloomberg. ♪
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all right, of course, markets in china and in hong kong. -- goingeing positive into the open. let us talk with mark tinker in hong kong. you talked to a strategist about what they like in terms of hong kong and china. next year is the same kind of sectors. maybe some of these consumer facing stocks. infrastructure. is there anything different you can offer us? mark: you are right. there are three or four big indoor for next year, and it is about china, 2025. we are looking at the upscaling of chinese factories with robotics and automation. we are looking at the buildout of the infrastructure, dominant into a capital market center, focusing on what is changing within the financial sector, and
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the chinese internet consumer, 2.0. obviously, don't forget, we had one belt, one road. the four policy drivers are andling into the stock sector themes that we think indoor for next year. those are the ones you are buying on the dips, a bit of profit taking. those areas, definitely. haidi: quickly, your top contrarian call for 2018? mark: volatility. of previouses quantitative easing. the unicorns, the private equities, the alternatives area, and all of those things being constructed on the basis of cheap capital. if volatility picks up and liquidity, all of those things are going to be a big struggle. haidi: i would love to see how that works with bitcoin.
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with a crash down to earth some of these assets you have been talking about. whole new sector. haidi: mark tinker. this is bloomberg. ♪
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haidi: all right, you are looking at the open when it comes to hong kong and china markets. a big day when it comes to data at the top of the next hour. we are getting some of these key domestic activity indicators. investment expected to slow. industrial output expected to moderate as well. the right spot could be retail sales. we have been talking about this rebalancing towards private consumption. maybe that will be the support of part of the economy, as elsewhere, we are seeing the slowdown due to the deleveraging campaign. retail sales expected to come in higher from the previous month. a bit of a mixed session so far.
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david, we always talk about chinese markets marching to the beat of their own drum. is that a positive space today? david: it does not look like they are on stage yet, haidi. there we go. flat open for the csi 300. we will talk about the hong kong markets in just a moment. .4%. 130 points to the upside. a decent deal yesterday. there are implications when you look at markets in hong kong. things like liquidity and monetary policy. we simply carry that over from the u.s.. there was not really an adjustment this morning. talk about that in just a momentary to give you a sense, equity markets looking mixed. slightly more momentum moving into -- haidi pointing out -- a data dump coming out of china. two in southeast asia. in of course, later on today the u.k.. to change this, we are still in gmm here. we have taken a look at g20. just pay attention of course of the currency markets.
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we have set this to midnight yesterday to measure the change. the dollar, substantially lower compared to this time yesterday. inflation coming through. the fed decision and potentially not moving when it comes to inflation. 1.5% on the aussie dollar. the increment coming from the dos data coming through. but that is your story. have a look at the substantial moves again. .9% of the downside. let me refresh is for you. mov . at the open, tencent leading the gains. one of the hav heavier weighted ones, down. we talk about the hong kong dollar, and obviously, it looks like a big move. a tight trading range. that being said, it is these increments that matter, right? we are seeing a move up from
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-- int is obvious the reaching end. if you look at the one year view of this, you do see a move weakening in the hong kong dollar. you take this back on the way to 2004, and you get a sense of where the sort of limits of the trading are. the downside on this pair to the upside. some concerns perhaps of liquidity. rate differentials obviously might be a problem, so this move up we have seen, because of this normalization process in the u.s., that is a normal thing that happened. do we get implications in a market? perhaps we will. interesting. currency on your bloomberg. haidi. much for that.o
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let's get you caught up today with the rest of the world headlines. ramy inocencio in new york for us. ramy: thank you very much. first, the fed has raised rates and lived to the growth forecast for next year. its key rate by 25 basis point and maintained its projection of three hikes in 2018. said the decision undermined the boards view that labor markets will remain strong and will eventually trigger higher wages. dissented. neel kashkari as well as charles evans. rates upantime, more in asia. bank indonesia is expected to leave its seven-day reverse repo rate unchanged at 4.25%, extending a positive back to bat cut in august and september and a subsequent plunge in the rupiah. at borrowing rate unchanged 3% with inflation easing since his november meeting.
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a prominent reflation is says the bank of japan must boost stimulus now before the next sales tax hike. the university professor says price momentum will not be strong enough leading to 2019. his view contrasts with most economists, who expect the next move to be to tighten. some see him as a potential candidate for one of the two positions and will open next march. budget surpluses in the coming years will be smaller than previously seen, and economic growth will be slower as the new government tries to one, reduce inequality, and two raise productivity. they update surpluses in 2018, 2019, and 2020, less than forecast back in august, while the economy will expand at 2.3% through june, below the 3.5% that was previously forecast. south african president jacob zuma has suffered a third legal week, witha
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the high court demanding an inquiry into allegations he allowed to the influential gupta family influence in decisions. they said he alone can order commissions and told him to take off. the ruling reaffirms an order from the corruption of buzz than last year that he tried to block. powered by more than 2700 journalists and analysts in more than 120 countries, i am ramy inocencio, and this is bloomberg. haidi. much forank you so that. china and the united kingdom are said to be assessing the feasibility of a bond trading link which would open up the largest emerging debt market. tom mackenzie has the story in beijing. tom, how close are we to this bond cap? -- connect? going to bels are meeting in beijing over the next few days and we have been told they are looking to set up a working group that will focus on
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the practicalities of setting up this potential bond next, as you say, between london and china. there will be two-way flows in the benefits for china, access to britain's march pool of fixed income investors, and for those investors, there is an opportunity to get involved in time is $10 trillion bond market, and the higher yields -- we have a chart. g #btv -- versus 10-year sovereign the top line of the u.s. treasuries, u.k. gilts, and bun ds. you're getting a yield under 4% versus the gilt, over 1%, 1.25%. attraction, the opportunity for u.k. investors if this bond connect does come off. a couple of hurdles. the time zone, they will have to work around that, and capital controls and what impact that might have on the two-way investment for china, and as you alluded to, this is another step
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in terms of opening up the capital markets after that decision to set up the bond connect in july between hong kong and shanghai. other topics the brits and chinese are likely to talk about, potentially being able to issue securities denominated in yuan, and possibly looking at the u.k. investing in the belt and road initiative worth $1.5 billion we are told. we are hoping to get more details and the next few days as the economic and -- takes place in beijing. in the meantime, we are getting more data out of china later this morning. what are we expecting? as you pointed to earlier in the show, we are expecting a pretty robust number for the retail sales. those are expected to come in at 10.3% versus the 10% number we
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got in the previous month, which was something of a disappointment. it is very hard to find any signs the chinese consumer is any less optimistic, and that is important, as you say that china tried to rebalance its economy. that is likely to soften marginally. we are expecting a pickup. a couple of headwinds. looking at infrastructure projects. this part of the focus on financial risks, in terms of industrial production, we are expecting to see that number tick up. suggest itndicators has continued robust growth in terms of industrial reduction. we are continuing to look at this global cyclical growth picture, which is helping demand for chinese exports. that is a positive. the numbers are likely to maintain this idea that you are looking at a very marginal, very
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gradual slowdown for the chinese economy. most expect the gdp number has come in at 6.5%. in terms of monetary policy, the the near tonly in medium term, expected to stay neutral with the focus on regulatory crackdowns when it comes to the so-called do leveraging campaign. asdi: study yeah she goes, always. thank you so much for that, tom mackenzie, from beijing for us. we will check back in with those numbers becoming available. let's get you caught up today with some of the headlines this morning. jim has renewed his condemnation of tesla, saying elon musk's car company is "heading for a brick wall." he also said every bull market a bad one.a is he has been very public about his short position in the company for more than a year. he told bloomberg that tesla is structurally unprofitable and way too leveraged.
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taxi sector to the in asia in an attempt to turn former enemies into allies. bringing bangkok's fleet into it after offer quicker. uber agreed to sell 51% of its singapore rental unit for more than 200 million dollars. uber has teamed up with three taxi companies in taipei. sufferedlectric has the biggest plunge after -- more doubt onts shinzo abe's hopes of bringing japan's nuclear grid back online. the network has been in mothballs since the fukushima disaster. other cases pending, seeking to prevent the return of nuclear power. coming up, hong kong and singapore getting a reality check. we speak to patrick wong and nicole wong about the outlook
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for the property sector. this is bloomberg. ♪
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prices in hong kong look like they will continue to rise next year, but investors and analysts said are watching government policy changes to assess the situation in the city and also across in mainland china. let's bring in the senior
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analysts, patrick wong. patrick, starting off with hong kong home prices, they are likely to be a bright spot when you compare it to what is going on in the mainland market. double-digit growth this year. is that sustainable potentially with what is going on with potential monetary tightening? patrick: yeah, we see the futures are really strong. expect the first half of this year. we see the growth, for the first six months, strong growth. a see growth is slowing down little bit. partly because of the interest rate increase, and also interesting, the record high. having said that, i think it is still there for the fundamental demand. still lots of demand. level, and0 year low definitely, we could see, especially for the upgrade in demand, it is there.
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year, agoing to next little bit challenging in the sense that we have more and more supply coming in and something like 400 square feet or below. next year, we will see -- in hong kong. that is a relatively high level compared to this year. we can see the risk is small. it is not that bad. haidi: yeah, what about funding costs? we have seen a little bit resurgent volatility. does that deflate investor demand when it comes to hong kong, or is it such a buoyant market that investors shake that off? oneick: i think for the -month high, you see a sharp increase. the u.s. interest rate going up. a very strong correlation. on the other hand, it is very
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interesting because the fact is here, it is markets moss.offering it seems that, given the interest rate going up, it is still the same. the mortgage rate, i mean, is still at a relatively stable level. and also, interesting for investments and for the market, we have strong info from china coming in, even with the top doubt occurs in the china market. they start at a very high price. they sold -- it is not that bad for the markets in hong kong. it is still relate -- positive going really positive going to next year. haidi: you talk about these lows coming from china when the mainland market is not looking intongly separate going
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next year. i want to bring in our next guest. our next guest does have a bit of a different picture. she thinks prices are affordable. i want to bring in th nicole wong. you have a different outlook. your call on hong kong prices being reasonable, explain that to me. i think most want to be homeowners and would disagree with you. nicole: yes, the thing is, if you look at the supply, it is about 20,000 units per year, and if you look at the number of households in hong kong, 2.5 million households. so that is less than 1% of hong kong's households willing to pay for it or able to pay for it. if you look at the trend, a lot of parents are actually remortgaging their property to subsidize the children's down payment, and if you look at the number, 66% of hong kong's
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outstandinge no mortgages with the remaining 36% actually not on very high ratios. -- they could keep subsidizing for a long way to go. what we are saying is the key problem is the supply. we have got the level of supply and there are a lot of people who can afford it. people.t the regular the prices are very affordable to those who are buying it. haidi: very affordable to those who can afford it. [laughter] patrick: i think therefore, markets like hong kong, it's really interesting. for the china market, i see the china market, we are also talking about lots of new policy coming in, like for example, the , talking about and evengh levels, this year, we see stabilization, so what are we looking up on the
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china market? nicole: china prices would go up for one simple reason is that it is going up against the roman be, -- renminbi, which is oversupply. there is a capital control. you cannot go across the border and buy something cheap in germany that easily. you have to look around. that is purchasable and it is going to be in limited supply. there is housing in big cities, meaning perhaps 40 cities, 50 cities. all the cities are actually growing in terms of population. because they have been developing for the past 10 or 15 years, the land supply is starting to, well, the window. jobs, the line of jobs pay more and more.
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less supply of housing. what does that mean? housing is like a work permit. you have to live within a reasonable distance to work efficiently, so the values of the properties are said to go up because there are going to be more people who are going to be able to pay for it and there are going to be more of them as well. that is probably prices in china going to go up in the next five years. patrick: interesting. , yeah, are youut positive though, when it comes to property developer stocks, just looking at the one your chart for evergrande, 420%? deleveraginge campaign. that has got to hurt developers, right? nicole: in terms of stocks, we actually downgraded the whole sector, saying that if you look at the stocks, there is something quite strange here.
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the oil traded multiple times the book value. they have three or four years. why are we paying developers multiple times of the book value when they have not got them at will on them, and now are going to pay a very high price? we think a lot of this price gains are going to chinese 120% to short housing prices. the developers margin, if there is not sufficient price increases, that would get compressed to next year. that is happening if we look at secondary home prices. that is coming down. if we look at primary home prices, flattening out. we think chinese developers outlook is a lot less encouraging. haidi: thank you so much for that. we will have to leave it there. also joined by patrick wong from bloomberg intelligence.
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the pboc raising interest rates in open market operations today. hiking the midterm lending facility rate by five basis points. we are also looking at a statement that says the open market rate hike reflects market demand and supply. it raised the rate on 28 day medium loan facility loans to 2.8%, from the pboc. we are getting some more details , raising the one-year mlf loans that.5%, hiking that from perhaps correlated to the moon we have seen from the federal reserve. definitely going to get more analysis on that for you. coming up, tencent pumping up the volume, drowning out its rivals. we look at the tech giant's music ambitions in china. this is bloomberg. ♪
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one of the most highly
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anticipated ipo's next year could be music to the ears of tencent investors who have had quite a run this year. streamingies and downloading unit seeking $1 billion. rob, music to their ears indeed. what is this all about? rob: this is all about tencent finding a way to make money from music. as we talked about, potentially, an ipo. what tencent has done, unusual for people who think of china as a haven for piracy, is lots of content deals. 200 different record labels internationally and locally so it could get a dominant position in chinese streaming and downloading. they are looking to monetize that with potential spinouts according to some of the sources we have spoken to. haidi: this is all part of the great tencent drive, isn't it? rob: very much so.
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the advantage tencent has over everyone else in the chinese market is the way they reach into consumer lives. with wechat and qqq, it has got reachle platforms that into everyone's smart phone in the company. not only do you have the access to your users, but you have a way to cross promote different services, so the music gets teamed up with the social net working and all the other services to someone can add and use from a tencent app. some of these ipo's -- is there a concern that with tightening monetary conditions, the washup could be a little bit negative? rob: there is always a concern that what happens at the macro level in china could affect the chinese consumer. haver, tencent and alibaba been largely immune. there has been a little bit of a disconnect between the consumer and the macro. but you can never rule these
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factors out. it is always quite possible. haidi: robert, thanks so much for joining us. plenty more to come. this is bloomberg. ♪
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♪ what per code you to want to join this company? -- propelled due to want to join this company? brian: i always wanted to work for my dad. did anybody say is he ready to be president yet? do you have problems with your cable? brian: sure. david: do you have problems with the cable man coming to your house? >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way. alright. ♪ david: i don't consider myself a journalist. and nobody else would consider myself a journalist. i began to take on the life of being an interviewer even though i have a day job running a private equity firm.

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