tv Bloomberg Markets Asia Bloomberg January 17, 2018 8:00pm-9:00pm EST
>> it is 9:00 a.m. in hong kong. i am haidi and this is "bloomberg markets: asia". ♪ haidi: asian stocks extending their stellar start. theirthey gives clues on reestablishment plan. goldman sachs finishing out a tough year. running dry, why the world's most valuable liquor company cannot meet demand for china's
favorite firewater. to show you that demand is not necessarily coming from me. bank of korea out with its rate decision as expected by all economists. charge unchanged. certainly, monetary policy heading towards the tightening trajectory. we will try to get more details. this is the second to last meeting for the current government. clearly, the bank of korea is very much monitoring the effects of that rate rise in november. juggling these issues including the household debt situation
which is pretty severe when it comes to south korea. , inbank of korea on hold the meantime, asian shares following the leader. fresh record highs when it comes to the asian session. let's get over to the markets. sophie is taking a look at the party. sophie: yes, the party is back on. we have data from china. just have the korean won fluctuating below that 1070 mark which abridged earlier in the session given the rise that we have been seeing in the greenback. the cosby is heading higher today. take a look at what is going on in taipei, we are seeing shares climb across those markets. the taiex is extending gains.
tech stocks are leading the gains in asia. let's check on on another tech giant in taipei, it is expected to post weaker earnings. we are seeing the stock gain grounds ahead of that report. in-tied and with strong taipei, given apple's plan to extend its capital spending in the u.s. for the next five years, $30 billion worth, we are seeing that stock on the rise. for the, tdk is rising sixth day. the stock was upgraded. moversheck on some other losses afterhad to hitting a session high. the jobless rate picked up as more people look for work. the aussie trading at 7948 right
there. in tokyo, the yen is steady. the nikkei 225 has climbed past 24,000 and the topix past 1900 and -- for the first time since 1991. this is exports and machinery leading the rice. --have seen debt enthusiasm the rise. we have seen that enthusiasm. investors have poured a record amount of cash into the global robotics aptly known as the boss etf. over half of its holdings are japanese stocks. line inhelping the white. the robo etf only has about a 20% allocation to japanese companies. the move is looking good for
japanese she makers today. haidi: sophie there for us today. let us take a look at the first word news. reporter: toshiba has jumped. that should help it resolved negative shareholder equity and avoid being delisted. toshiba expects one and a half billion dollars from the deal. toshiba agreed to sell its chip unit to raise funds for the deal may not close by march. apple says it will pay about $38 billion on tax. the company is also promising $830 billion capital expenditure over five years creating 20,000 new jobs at existing sites. ceo tim cook says apple is focusing on job creation and preparedness. a strongly employment --
australian employment search in november. employment rose by almost 35,000 in november. australian job market saw full-time jobs go back. north and south korea will match under one unified black during the opening ceremony of next month's winter olympics. it is the strongest sign yet of an easing of tensions. the decision on who will represent north korean leader has yet to be made. global news 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries, i;m paul allen.- i'm paul this is bloomberg. economics bloomberg
policy editor is here. no surprises, we are also looking at the ablation and growth outlook. reporter: that is certainly going to be coming in the next hour or two. maybe we will also get some interesting statements there. obviously, they have kept their key rate unchanged. there are just too many balls in the air. business for an export dependent country like korea. at the same time, it is trying to hold inflation down. you could see the official rate is 1.5%. years of rate cuts and then in november it hiked up to one and a half percent. korean inflation is at 1.5%. they targeted 2%. now, it is in focus while we
wait for the bank of korea to tell us if they see more or less inflation. in fact, our bloomberg team in asea suggesting that as long it stays below two percent, that would signal that the bank of korea is not too worried about inflation. interesting to see what they say about the one. -- the one. -- the won. again, with a comment on this? certainly, it keeps inflation lower. analysts who follow the be ok are saying the second quarter at the earliest for a rate hike. which is up to. see how a lot of this plays out haidi: also rounding out the week in asia, indonesia is up
next. we will be focusing on the key issues. reporter: at this point, a hate right -- eight rate hikes in two years. now, this indonesian food job limits any more food cuts. this whole concept into a picture, i think we have the rock chart up there, my apologies. what you would have seen is high, butnot too enough for the government to get ready to import 500,000 tons of rice. see the is, you can turquoise bars, those are food prices. that is the inflation rate,
still pretty steady. all the more reason why they will keep their key rate study. of course we are going into the bank of japan as well. signals?tting any reporter: in fact, it is going to be jan3031. aziz modest increases -- it sees modest increases in wage prices. the president of the cleveland fed has been a bit of a hot. she says -- hawk. her voice must have been heard in the beige book as well. she also sees some upside risk
from u.s. fiscal policy in other words, tax cuts. hand, the book itself shows that businesses surveyed were mixed. some said, it will not make a big difference. others think it will help boost growth. ,ne more thing of course, japan industrial production prices will be closely watched as we get ready for that boj witting -- meeting next week. haidi: we can hardly wait either. still ahead, chinese property stocks have been red-hot but what has been done to cool things down? it is high time for u.s. stocks. should traders remain optimistic? we hear from global investors next. this is bloomberg. ♪
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♪ u.s. stocks rose to fresh highs as companies continue to indicate that the tax overhaul will boost earnings this year. seeing, theye are are getting close to the rational. -- irrational. "bloomberg markets: asia" >> evaluations are very high. >> every bit of good news seems to be incorporated into the market price is right now. there is not a lot of room for bad news. for the first time in 2007, we are actually looking at a situation where and balanced or polio might outperform and overall equity portfolio. haidi: we will have more from that in the next hour. insights. some
time to be strange trying to make sense of this market. we just had the bank of america survey suggesting that this market is not likely to peak until sometime in 2019. i want to start with a chart that paints the exuberance we see in the markets right now. when they are marking down their estimates, we are seeing revisions go higher and higher through 2019 and 2020. do think there is a sense of complacency taking hold at the ?oment overall seemkets
to have discounted quite well the concepts of tax reform. on a micro basis, we are now going through the earnings impact from company to company. that is coming through in earnings. therefore, making the price to earnings ratio on the markets look lower. one of the concerns that we have all had about the u.s. market has been it's a valuation. it is looking less expensive. momentum is strong and prices. sentiment has risen. relativeime for caution but still overall proactive. haidi: and a time for more active choices i would imagine. lucy: absolutely.
where thee to a time normal returns in markets are liable to be lower than they have been in the past, then, add isit that you can going to make a big difference. . haidi: what is the biggest risk? is it that inflation finally pops up? what we have seen so far is alive? -- is a lag? or, is it something separate from that? lucy: the two things that are andly risky are inflation wage inflation. really picked up in
the cycle in the way that you would expect it to. we are now beginning to see very small signs of high wages coming through. as we go through the earnings season, that is one thing we are focusing on. a surprise and inflation could be something that derails the current enthusiasm because it could lead to an upward shift in bond yields. could unsettle the market. is that we areg expecting to peak liquidity sometime later this year. we areat is because seeing a huge unwind of the balance sheet. if wes something which are assuming will continue in a managed way, will be a huge endeavor.
of a sector by sector look, are you looking outside of tech now? have you looked at semiconductors? lucy: we have. they tended to be around technology. to hedge the portfolio against some of these risks that i was talking about, the higher inflation in particular, adding a little bit to some of the financials and some of the hedge --e names, to just bear balance the portfolio out to a new environment that we could see some more risk. it is a balanced approach as we go into this year but still maintaining that equity
exposure. aretill think that equities better than a fixed interest. haidi: does the dollar continue to be supportive for asia? lucy: on balance yes. upside outsidere of the u.s. been inside -- then, inside of it. certainly, the weaker dollar helped with that. haidi: lucy thank you so much for that. investors.bal we are counting down to the opening of markets in china and hong kong. we are just minutes away now. we have pre-markets up. the counturse as saying breaks through and sets -- hangsaying sets
seng sets a new record high. we can catch up with all of that by using our interactive function tv . you also be able to watch live. you can send us instant messages during our shows. this is for bloomberg subscribers only though. ticket out of tv . this is bloomberg. -- check it out at bloomberg go -- tv . this is bloomberg. ♪ >> from urban grounds to mountaintops, anytime anywhere. it is designed by fitness experts and proven like 20 million users worldwide. it gets you fit in just 12 weeks.
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the more you play around with that, the more you become aware of it. if you are not thinking about it, it is just about feeling and emotion. it has in fact whether you are aware of it or not. ♪ call 1-800-sandals ♪ sachs comes after an unusually rough year. bad newshe latest about that we are talking about here? >> it is about how the mighty
has fallen. for the first time since 2011, it reported a fourth-quarter loss. even ignoring that, the real story is the poll results show the results were and that affected the market cap. let's go quickly to a chart of how morgan stanley is now higher than goldman sachs in terms of market caps. this is the first time this has happened in over 4000 days. weakness and goldman that has revealed a new weakness that has never been shown before. again, usually the strength of it was is half of what in the same. in 2016.
in terms of dropping shares, we are down about 3%, that is what really affected market caps. you are looking at the ceo. he has been in the ceo suite for 12 years. the big question now is who will succeed him. leading contenders are the president and cooperating officer. finally, let's talk about tax windfall. goldman's was not positive. if you look at some of the other banks, this has really been the headline. they are getting a big benefit from tax overhaul. the new tax rate for bank of america is 20%. that was a big story coming out of banking. last week, a 7 billion combined windfall. they now have the problem of trying to figure out what to do with it. some of it may go back to investors but in any event, this has been a very big story for
the other event -- banks, not for oldman. -- goldman. a $300 took about million hit. it is a south african retailer and it announced a counting scandal in october. take a look at the bad losses. the largest banks have had to. account for the biggest was of course citigroup. goldman was close to a $300 million loss. that was part of the result. you may see that translate again into the way that the stock trades on thursday's session. haidi: think is a much for that. coming up, we will be breaking the price out of china and watching for more clues as to whether the market is calling. markets in hong kong and shanghai getting underway.
we are watching the hong kong markets of course after the most recent record high milestone. all of the opening numbers right after this break. this is bloomberg. ♪ i had the time of my life. >>do it all again. 65%.e up to it is great when you see 100 orders come in but then you realize, i have 100 orders i have to ship out. everything is seamlessly put into ship station.
an hour. ♪ haidi: it is 9:29 here in hong kong. in hong kong we are counting down to the markets. we had a superstar performance when it came to the hang seng reports. carrying over from the best ever close to hit the highs breaking records. shares have further to run. this is a market that has been languishing behind its global peers. as such, at the end of 2016, it was at its weakest level in 13 years.
she -- chief evaluations compared to most of the developing markets as well. it is still low hanging fruit in it comes to shares their. see the 45% run-up. how far can ago? let's find out. the gaugeu have continuing its record run. actually, breaking that 13,000 level in the hang seng rising for its third day. the mood is a little bit mixed on the mainland. you have the bucket coming under pressure but it is extending gains for the third day. while techaining stocks fall. financials and tax
leading the charge there. have a stock rewriting from goldman so keep an eye on chinese banks today. haidi: watching chinese banks but also watching chinese property developers today. rising and 57 cities. let's get some details on this. i suppose you look at this and wonder whether we are going to see a little bit more heat in the market this year. tom: that is really the top line at the moment. price rises that we are seeing in 57 cities month to month. ofyou said, there is a lot speculation as to what happens in the real estate sector in 2018. of course, we have seen the real estate developers storming out
of the gates in 2018. concerns been some about the tighter credit environment. you will start to see a little bit of pressure in the real estate sector. we are getting a few more lines dropping. 0.3%.e shanghai rising they were up 0.2% in beijing. prices in december were in line and unchanged. these lines are still continuing to drop. it is a question of sentiment. there has been some speculation has a bitroxy sector of an improved sentiment from
the depths of what he 16 when a lot of these curbs were put in place. they are seeing a potential pickup of demand. you are seeing some easing just around the edges when it comes to the curves. . there is a question of whether or not the consolidation is going to happen in the proxy and real estate sector. of course the regulators here of said they will continue to look very closely at lending in the property sector and they do not want to see speculation around house prices here. it is about balancing these competing tensions when it comes to china's real estate. the picture that we have is one of an approved sentiment for 2017 2018.
many are saying it could be a factor in 2018 depending on how these different pressures play out. we have another top-tier city here dropping. falling 3%. for a month to month number, they and shop just 0.2% -- and just up just -- edged up just 0.2%. if the governor house prices here in china for the month of december. you spoke about how crucial property and the entire sector is when it comes to gdp growth. what are we expecting from the numbers? 3:00 beijing time.
number should round up at 6.8%. industrial production and fixed asset is expected to remain in line with the previous months numbers. retail sales are up about 10.2%. ofre is a little bit of link course between the retail and property sectors. in terms of fixed asset investment, it is expected to pick up but slowing overall from the previous month. that may be seen as a good thing because in many people's eyes, too much growth gets powered by investment. 3:00 numbers out at beijing time. arehouse price numbers
rising 57 50 here in china for the nub -- month of. december haidi: top thank you so much for that. going to those december 30 prices, a little bit of a pickup pretty much across the board. let us break down these numbers with the help of nickel. -- nicole. great to have you. not a lot of time to digest these numbers but give me your thoughts. that chinally think property prices are going to go up not just in 2018 but probably in the next five years. the problem with china is that they have run under supply for three years. in some parts of the past three 50% belowre has been sales. that is going to be difficult to turn around. that is why we think this is another year of price increases
and certainly, a another year of price tightening. we were just recently and shanghai, some of those prices are because they are lifting restrictions and price caps in the cheaper districts to deliberately way down the average selling prices. prices would be going up a lot more than what we are seeing now. haidi: as you said, the supply, how under much of a couple getting factor is that/ ? >> the only way to actually take care of it is to increase supply. . this is very much a local government thing local governments perceive
things to worry about. on.e is a bit of that going we do not actually see a solution yet. we think the rental housing policy of the central government which is going on in china, possibly will make rise increases worse. this rental housing basically subsidizing the young professionals for the first 3-5 years of their career. after that, they will become the new consumers. we just think that there is a lot of upside actually. haidi: i want to bring it up this chart. all of us here at bloomberg like this chart. they clearly tells the story of divergence in chinese property stocks.
they go inlain why opposite directions? chinese stocks are a bit difficult to read. when the economy is weak, the government encourages more sales in the property sector so that it can draw more money and investment in to the real economy. whatever the prices start to react positively, then, there is going to be a lot of slowing in the sector. the reverse happens. the government starts to worry about over heating. actually, the regulates the sector. what is different about this rally is that property prices are going up and stocks are going up. that is probably because the market believes that this time around, the government will be less akoni and then in the past
draconian than in the past. they think this is a stable of cycle. -- up cycle. in the last few months we have seen city start to lack. haidi: is that a trend that is likely to continue for this year? >> in terms of volume growth yes. they are actually rather restricted in terms of supply. it accounts for 5% of property market sales. the key is to look at the second for 35% ofaccount the market. the growth there will slowdown from leicester but price growth -- last year but price growth
will continue. last year, it was only a single digit a percent growth. definitely not enough to meet demand other. of goingckel in terms taking the supply issue, that which developers do think will be best positioned the share question mark -- this year? we like collee and shin mao. you can see from all of these numbers that all of these developers actually celebrate these sales by up to 25-30%
plus. they are working about compressing margins. they need to accelerate the top line and also maintain their margins. that would be a very nice earnings growth going forward. thebest thing about it is low multiples. low risk of shared placement. haidi: i just want to throw up this quik-trip that i was tried to -- chart i was tried to bring up earlier. clearly, first through third tier cities are massive. where do you see the pain in terms of some of these outer cities and outer regions? are there areas that are going to hit some sort of critical
point this year? is verythe correction much engineered. the first is slow. it is because of the price caps. their lunches are sold out within just. hours you can see that if there are no restrictions, they are going to go up a lot. i think the first tier prices are not reflective of the real market. the second and third tier are given more flexibility and that is why they are shown more price growth. haidi: fascinating is always. regional head of property research. let's get to the first word news with paul allen. holding fell to an
all-time low in november. 1.1%ngs of u.s. bonds fell from a month earlier to one point $2 trillion. beijing is considering tapering its services. president trump is backing a house plan to avoid a government shutdown. speaker paul ryan and his team have been lighting up support for a stopgap spending bill to keep the government operating. a house vote is likely on thursday. president trump has tweeted a link to the fake news awards. however, the page went off-line moments later.
earlier, republican senator jeff flake said the president was not dismissing media coverage. the enemy of the people is how the president of the united states call the free press and 2017. testamentent, it is a to our condition that the president uses words spoken by joseph stalin. global news 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries, i'm paul allen. this bloomberg. ♪ haidi: china's most inquisitive companies are now getting crushed by the government shutdown. we will have the latest casualties if you will next. this is bloomberg. ♪ noisy, chaotic, and the
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haidi: a quick check of the latest business flash headlines. minor reporting on improved performance. it has put it on target for record annual production. the world's biggest miner cut its output target down. petroleum, this is how they are tracking here in the sydney session. we are seeing a little bit of a downside at 1.5% there. production decline of 11%.
company has forecast reduction between 85-90 million barrels of oil for the whole of 2018. estrada growers say prices are expected to set all-time highs this year. prices are on track to reach 20 aussie dollar's per kilo. affluencesays rising and china will spur demand but it is also targeting significant growth in the u.s.. they are now under pressure from government crackdowns. dave, how the mighty have
fallen. let's start off with h and a -- hna, what we know so far? bow high securities is one of andcompany's security units they have already pledged most of their entire stake against borrowing. what we learned today is that there was a little bit more to scrape out of that so they pledged yet another piece of that stake. what this tells us is that they are really screwed me the bottom of the barrel to raise money here. ais is a company that has long track record of using stakes in companies it holds specifically, to back are owing. when we have had disclosures about bond yields that they have been having, this is a company that is rolling over debt at very high rates. they really need to raise capital in every way they can. the announcements have been
coming on almost on a daily basis. investors are on high alert watching every move this company makes because they are not sure how much money they will be raising. haidi: this is just a band-aid right? it sounds like the company is running out of time. dave: it does indeed. when you are in a situation where you are borrowing against specific shareholdings that you have, it shows that there is an element of desperation. the company has continuously reassured people that they have for example, a 10,000,000,001 credit line that they can tap -- line.lion one credit they have missed payments and they are really struggling to raise capital.
haidi: the pressure is on and intensifying for hna. dave thanks a lot. coming up, a spiritual dilemma for the world most powerful distilleries. shortage,ackle the next. this is bloomberg. ♪ angie's list has collected millions of verified reviews. angie's list makes it easy for you to find top-quality service providers. search for a great pro in your area. fromt the most reviews real customers all for free, go to angie's list.com. ♪
galleries around the world. is really a composer. he is falling together different elements. together.em all ♪ interest is different levels of experience that can be created with sound. the interest lies in perception. the more you play around with that, the more you become aware of it. if you are not thinking about it, it is just about feeling and emotion. it has impact on you whether you are aware of it or not. brilliant ideas. >> high i am the internet.
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>> it is incredibly popular in china. billion dollar company. the company is facing significant natural constraints in producing the slicker. this is a problem for the company because the grain that goes into making this letter can only be grown in this specific town. the water that adds to it is coming from the river that cuts through the town. the they are facing is shortage of liquor. haidi: what are they going to do about it? >> the company knows it has to reduce its liquor. one of the things that it is doing is it is trying to push a premium prestige and. -- end. ¥10,000 per at
bottle. they are looking hard at how they can move this away from the company. the chairman told us they are actually planning three separate public offerings coming up in the next two years. in the long run, the company is to move away from its reliance. haidi: in the meantime, savor the flavor. through thee coming statement wants to ensure there is 2018 growth expected at 3%. low 1%on is to be in the range for some time. these comments coming out of the bank of korea. coming up, waiting on the china
gdp. what to expect. this is bloomberg. ♪ where are your reading glasses? mine are on the back of my phone. these are my thin optics. if you have not heard of them, they will blow you away. they bend, twist, flex. these are awesome. even, when you go to the extreme, you cannot break them. thin optics come with a lifetime guarantee. you get free replacement glasses forever.
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