tv Bloomberg Daybreak Asia Bloomberg November 19, 2018 7:00pm-9:00pm EST
♪ >> good morning we are in sydney. good evening from bloomberg's global headquarters in new york. >> welcome to daybreak asia. ♪ >> the top stories this tuesday. asia-pacific racquets facing decline. they are in their territories. apple supplies will be feeling the heat amid new reports that production numbers are being flushed.
>> it is the end for carlos, onsan board will sack him thursday. >> the stock is said to fall of course. all eyes on the japanese market. as heidi mentioned, we are seeing downsides, wall street to another tumble in -- and tech took a beating. sophie, what are you seeing? refresh theeed to board. this is off by 1.1%, you do have this under pressure. all the shares are lower for a third straight day, this aztec is leading the decline in sydney . you have them dropping in australia. on the eco-agenda, we will be watching for taiwan export orders for october that is closely watched given the emphasis on tech. heartnvestors may take
from reports the ship maker is secured to -- is that to secure an order from ibm. we are closely watching of what will be happening with shares 5.9y after adr dropped percent, sending it to the lowest level since 2016. untreated.started we are also keep an eye on in its vichy -- mitsubishi motors. this is a big story. >> the latest on the son, also offers outweighing bids by 1.5 to one. we are waiting for that stock to start trading in japan, let's .et you going >> thank you, the anticipated revolt against the u.k. prime minister theresa may appears to be running out of steam. her opponent went to the
threshold for a leadership challenge, she appealed for the support of big business, saying the issue is not something little. they reality of jobs. her opponent at home and abroad say the deal must be debated and voted upon. the modi government and the reserve bank of india has official demands for share in capital. the panel began transferring funds to the government, after a board meeting that lasted or than nine hours. the two sides have been sparring for weeks over how much capital the bank needs and how tough the lending rules should be. white house has restored cnn correspondent jim a costas press pass, ending a 12 day drama. cnn is -- has now dropped the legal action against the white house. the ministration has imposed new roles for press conferences, letting reporters to just one question with follow-up to the
discretion of the president or other officials. king salman in saudi arabia has given a major speech on foreign policy, it outlined the kingdom's priorities in the coming year, it was his person -- first public address after the killing of the journalist. the king made no reference to what happened in istanbul last month come he did however discuss iran, the need for oil stability and the war in yemen, and offered old backing for his son the crown prince. stagedts of tijuana, has protest against the joy american migrants, saying may pose a threat to public safety. some referred to trump comments calling people and invasion, it is the busiest crossing in the u.s., it was closed for several hours monday as new security barriers were installed. global news, 24 hours a day on by and on twitter, powered more than 2700 journalist and analysts in more than 20
countries. i'm jessica summers, this is bloomberg. industryobal auto biggest alliance has been thrown into turmoil by the arrest of carlos gone. nissan shares and traded at the moment. the cell offers outweighing bids by 1.5-one. nissan says their board will vote thursday on moving him after he was detained in tokyo for allegedly breaching financial walls. the board will also discuss allegations. the nissan ceo, who was his protege, confirmed the arrest. about theable to talk details, but needless to say, this is an act cannot be tolerated by the company and the experts judge this gives them enough reason for dismissal. >> we're joined from hong kong by our chief north asia correspondent stephen ingle. first of all, walk us through what happened.
stephen: it was an amazing turn of events, we got the news mid evening last night here in hong kong. what we are hearing and what we have learned so far from the ceo at a hastily arranged press conference last night is that he has been detained by police on suspected breach of japanese financial law, this after a whistleblower apparently led to a several month investigation, internal investigation about nissan. thursdayset to meet on to possibly remove gohn as well as board director kelly. the sun saying the two men underreported compensation from securities. during that investigation nissan uncovered numerous other significant acts of misconduct including purposeful desperate this will use a company.
they said they cannot get into more details of the investigation, but the news is reportinggohn may have understated his income by as much as ¥5 billion, that is 40 formally billion u.s. dollars over five years. his renumeration, his salaries over the course of the alliance have been aanies point of contention earning more than 20 million u.s. dollars a year. they say this is an act that cannot be tolerated by the company. >> thank you. not underscore the seriousness feels allegations, it like maybe there were grievances that were on the line, given everything. next the time was fascinating. corporate scandals in recent
years, toshiba, took on airbags , we have seenags lots of the sort of thing happening. there is a standard playbook. a tribute to their good qualities or admission of the bad qualities. that is not what we saw, this felt like a regime change. it literally was talking about the long regime and the negative aspects, there was too much power concentrated in one way and. had to be hard-pressed to say anything positive that all about the person running the company for two decades. that to me, was very interesting. bowthey did not make a deep which you would expect a japanese executive to make after this. having these tensions being rumbling in the alliance for a main job in the moment was trying to secure that legacy that is tensions in the future, it feels like it has really boiled down here. howt was really interesting
he was only talkingg about what good came out ofohn's early years. do we know how much the nissan alliance had to do with this? saying the french company have the best of this relationship. david: i think that is the case. if you look at the alliance as a whole, it essentially breaks at nissan. about half of the net profits in every one of the past seven or eight years has actually come from the share of nissan's earnings. productivity per worker, higher at nissan. nissan has great positions in keep markets like the u.s. and china, where it folks -- focuses on areas like latin america and russia that do not perform so well. share andhave the 43% nissan which means it can control nissan and the french state has a 15% share of reno
which means in some sense the whole alliance is being controlled or has a veto. that has caused great tension. i think we have seen in recent has try to meld this into some sort of form of merger or long term structure that can survive his retirement, he turned 55 in a few months, we have seen from nissan, anonymous comments to the japanese media at thee great discomfort idea they could merge would change the status quote in a way. after that delay in the start of trading, nissan is trading down 6.5% in the tokyo session as we digest news of the arrest. we also see mitsubishi is down under 7% in the early first few minutes. , and the broader
context, how political could things get here? alluding we were just to their, there were some rumblings within the nissan camp , there was an inequitable partnership if you will within the alliance as we rightfully said that reno controlled more of nissan men nissan does of them. nissan made so much more of a profit. but owns 43% of nissan, nissan only owns 15% but they also control 34% of mitsubishi. it is a conflict shareholding and the japanese perhaps have been thinking for some time that they are giving the short -- getting the short end of this stick. and as if we have been reporting since july when carlos alluded to the fact that he might be trying to create more consolidation, perhaps a merger among partners, that is not necessarily something the japanese wanted because that would perhaps lessen the even more there say of the alliance.
>> david, so the question now, healer this will actually some tensions, what are we expecting? that famousentioned line, i stepped in, blood, it would be more tedious to go back then to go forward, it is rather hard to see how you can go back to the status quote after something like this has happened . it is almost more hard to see what could become of this. one option would be, could renault?unch for i don't think so, because it has sort of poisons to the french stake their. could there be a way that nissan unilaterally dissolve their lines, they certainly
cannot kick reynold out of shareholders. could they develop some of those joint purchasing agreements and r&d agreements as sort of the .edrock of the alliance it is hard to see how it could be done but you would think that after so this has happened, the sort of thing that nissan will have to think about. >> thank you so much. david, here in sydney. they're just finding out that nissan spent several billion yen on multiple -- for carlos, who has been arrested. we are also seeing some bullying since nissan has started trading in tokyo, 1400 times the average daily volume that we have seen for that stock am a it is down the damage half of that would expect looking at the futures of the a dnr session. let's look at what has been
happening with equities, a bad start to the day, due to u.s. session, shortened holiday week, volumes are lower, volatility will be excessive rated and the , allselloff continues weighing on the broader market. now from singapore, no shortage of negative tech headlines, particularly after this in this part of the world after concerns about the chinese component makers being asked to come back on what they are making. >> that is exactly it, the one is howorth pointing out big of awaiting textures had in asia, it has -- such a large driven selloff because of what happened in the u.s. a e waiting, that anything that goes wrong is bound to impact asian stock in general. a part of it will be the
sentiment, with the nasdaq falling more than 3% and the s&p 500 dropping more than 1%. there is also the fundamentals of everything we are not so great news coming out of apple, that will impact stocks in asia because there are so many --pliers within asia for a apple. you have suppliers in korea, japan, taiwan, in hong kong. that is definitely that whole carnage that happened in the u.s., that is definitely going to seep into asia today. i think we are already seeing that this morning. >> of course we have the latest headlines on nissan is well. the stock is taking a beating and the market in tokyo as well are falling. aside from all of these news of tech, what else could drag stock further? >> that is exactly it, sherry, i'm not seeing any good news for the stock market investors, there is the tech carnage, that
will -- play a huge impact in japan. of course, bit coin is not doing grey well, you have trade tensions that are not going anywhere, of course there is also investors coming out and saying, not so great things like ray dolly who said investigate -- investors should expect low returns. no good news out of asia,. >> bloomberg news asia equity leader, not a good day for asian trading if you are investing in any automakers trading in japan. nissan is down 6.3% at this point. 1400 is the average daily trading by him this year, it was a delayed start as the markets struggled to find a match with those cell offers outnumbering the buy offers, mitsubishi is also seeing some of treating there as well, all of this on news of carlos gohn's
arrest. we had the stark news conference from the ceo seeking to distance the copy from the allegations. 5% decline atoint the start, close to the session lows at this point. the latest report coming from nhk reporting that nissan spent several billion on multiple homes for carlos gohn. we will continue to watch that story, it will be the major story today trading in asia, also watching out for some of these apple suppliers as tech continues to see a downside. this is bloomberg. this is bloomberg.
important to look beyond short-term sentiment and see volatility as an opportunity. with us is our guest from hong kong. great to have you with us. we are seeing a lot of volatility and also going to to asian trading. and we had the latest headlines affecting investor sentiment. wouldn't this be the right time to be in the market or shall we wait until valuations fall even more? related selloff. fundamentally strong companies could the look value down. pricee bad news is in the that there is a different story in asia. our view is it is deftly timed to start taking a close look at those companies which we know very well which has a
proven history of weathering the cycles. have taken a huge a huge selloff in the u.s. and in asia. is this a factor we should be looking at? >> selectively, yes, there are interesting models. some are coming from china. , and know the story valuations are looking more meaningful. during the holy euphoria in 2017, these stocks have come off a lot since then. -- eachme to look at it individual opportunity by itself. at theow time to look sector and stock picking. emerging markets have stopped underperforming compared to the u.s., for example. would you still be buying into the same demographic growth
story like this time last year? >> yes. our view is when you look at asia within the emerging markets, structural story that will pave the way for the outperformance. the structural side of asia is that is in turkey or argentina that will stand out in the long term. for theseong level economies. in the short term, there will be sentiment due to volatility that will go up. they want to know where it is likely to take off. the slowdown in china never helps. >> volatility when it comes to be yuan. voices,had quite a few even despite what happens to the where itd the yuan and
can hold on, it will be a strong determinant of how asia assets perform? >> yes, exactly. chinese policymakers are well aware of it. when we talk to companies that are on everybody's minds, for the time being, we are not making a currency forecast. china has a range of measures when it comes to going turmoil. is, you know, moving manufacturing to some of the regional economies and also automating and moving the economy upward. we have seen several measures and play in china which will have a long-term impact. >> and china, the stimulus expectation and now sending some investors into the riskiest stocks. we are talking about docs with negative net assets or losses.
how dangerous is this? >> yes, there is one it means to be really focused and do your due diligence well and be on the domesticd support from resources like we have in the inm of research analysts china. it is important to stick to the noise and really focus on doing what you have been doing, sticking to it. volatility and uncertainty are the biggest steps for any active manager. they can throw up opportunities. it is important to make sure we have the fundamental story. >> we are seeing the u.s.-china yield vanishing, essentially vanishing, as we see this divergent among policy kick in. what does it say for the yuan and equity markets? >> china is very clearly on this
policy of easing china is clearly on this policy of easing. a big not saying it is bang like we have seen in the past, but this easing is what we think should fight out and we see the impact of that over the next six to nine months. in the meantime, this is literally being in the eye of the storm where you see the worst impact coming through. we are not seeing a currency forecast. it should point to a better picture in the next six months. now, things are moderating, slowing at the margin and it is something that they are very much aware of. idi: tech and manufacturing, when you talk about the pressures for the supply chain in this part of the world, how agile or resilient or flexible
is it for these companies to and --their investments in strategies and manufactures to avoid the standoff? >> when you look at all the news around it, manufacturing is a great example. china has already been moving manufacturing to markets, especially in asean. taiwan is an example of that come a beneficiary. that has happened over the last few months and years, not something overnight. that is likely to continue. on the technology side, some of the supply chains are very robust. it is not really easy to change overnight. scale.na offers that so it's not easy to replicate the supply chains as people think it is. y: thank you so much for joining us today. now onse, all eyes right the japanese market, especially
as we see nissan and mitsubishi of -- beinge news arrested. the board at nissan is set to meet on thursday. they have been under investigation at nissan for several months after a whistleblower complained about violations, financial violations. we continue to see the pressure on the markets, not only from the sun, but also from text -- tech stocks. haidi: a huge surge when it comes to volumes as well. to be fair, it is not quite as bad as what we were expecting into a looking for 15% for nissan.
haidi: breaking news crossing the bloomberg. ting, more likely an increase, up rather than down. also talking about the trade war and international trade policies a significant risk to the global outlook. but the business investment and army could turn it to be started than expected. the reserve bank of australia saying that unemployed and could fall further. jobs andst sets of market data coming out recently.
there is a degree of uncertainty of how much labor market capacity there is at the moment. not much in terms of anything we didn't know, but certainly talking about trade. he see the reaction, the downside reaction when it comes to the trade wars in this unwinding we are seeing in the aussie, as well as in the kiwi dollars. shery: very interesting to see the rba remain comfortable despite the slowdown. jessica: nissan and mitsubishi opens fell at the tokyo after the arrest of carlos ghosn . fell to its lowest in four years. says there was underreported income and misused assets and he is said to be removed by the board. the committee will look into the structure of nissan's alliance with renault and mitsubishi. >> i am unable to talk about the
details. new less to say, this is an act that cannot be tolerated by the company. experts judge that this gives them enough reason for dismissal. china accused the united states of ruining the atmosphere. for the first time in its 29-year history, apec ended without a document he came. beijing says -- without a communique. beijing says the u.s. was ablaze with anger and made it impossible to come to consensus. israeli officials have criticized air baby'this is -- bnb'sb&b's decision -- air decision to remove rentals on the west bank. it says it knows some people will disagree and appreciate their respective.
hassuperstar taylor swift chosen universal music for a multiyear contract. financial terms were not included in a statement late monday, by variety reported the record company will share proceeds from its expected sale of equity in spotify. set on instagram as she feels motivated by the new opportunities created by streaming. superstar fanese bing hasng -- phan bing reemerged. last month, she was ordered to pay more than $120 million in back taxes and fines. this is bloomberg. ♪
haidi: let's take a look at how the markets are shaping up. we have been watching the face of the automakers us morning in japan. sophie: leading losses, the i.t. led rally on monday, tech the biggest drag as well. shares, a third day of losses. bynew zealand, shares off 7/10 of 1%. the yen is rising for a third straight day. the 10-year treasury yield this keeping steady as investors assess expectations for economic growth and trade tensions, especially after seeing the volatility in u.s. stock markets
that have prompted ray dalio to say you ready for a stretch of low returns. we see the aussie dollar hold steady. we are waiting to hear from the governor later this afternoon. to see will be waiting if there are any clues to see if the currency has bottomed. let's take another look at nissan and mitsubishi motors shares as they look to dismiss both weighingman, the most in the nikkei 225. the thing, checking on terminal, you can visualize that jump in trading volume for nissan shares -- far above the daily average.
we have the one-day to the 180-day moving average. the trading volume at about 1900% above the 20-day average. that is a significant move so far this morning. shery: thank you so much. another company that we are ising a close look at jd.com, falling to its lowest in the last 18 months on lower than expected revenue. weak guidance for the currency. tom mackenzie has the numbers in may g -- in beijing. jd feeling the impact of the cooling chinese economy. tom: these are we are. -- they certainly are. the investors took notice of that. daniel today, almost 50%. -- downs almost 15% today almost 15%.
sales for the fourth quarter came down below estimates. their annual active users fell for the first time since their in 2014 ipo. that will be of concern to investors as well. increased competition, it is a factory-based market in china. and competition from alibaba as well. to face up to that competition, spending on ever structure and talent. they are trying to grow their presence overseas, southeast asia, europe, at some point the u.s. as well. but that comes at a cost. so spending on things like tech and infrastructure and talent doubled to about $500 million usd. the founder of this company is facing clouds because he has been alleged or faced allegations of rape in the u.s. it is something that richard lou
and the companies, something they deny very strongly. that is another factor to added to the mix. he says these investments should start to pay off in 2019. haidi: looking at xiaomi earnings, different story. what are the highlights? this was really about shipments of smartphones once again for this company. their bets on the emerging markets paying off. indian sales doing pretty well, southeast asia -- and also europe is a strong market. mind, smartphone shipments are facing a contraction globally. there is competition here, date competition in the smartphone market. that's why you see xiaomi investing in premium apartments -- ramy markets to improve their margins. premium markets to improve
their margins? you have the weaker indian rupee to face up to and the weaker yuan. they booked a lot of their costs in u.s. dollars. the other key question for investors is what is happening with internet services. they did see a tick up in advertisement revenues, and those using their operating systems. the questions will remain as to whether or not this company is fairly valued, given the founder wants to portray it as this internet services company layered on top of a hardware services company. haidi: in terms of the latest batch of earnings, does it tell us much about the strength of the chinese consumer at this point? if you take into account the earnings and what we saw on 11/11, the big singles' day sale, certainly, you get a sense
that the economy and the data points that this slowing is causing and the consumer is a cautious. we did get that record number for the alibaba sales figures, but that could be because they were stocking up on this purchases ahead of that event. you can see those purchases coal in the next few months. consumers are becoming more -- cool in the next few months. consumers are becoming more cautious. we have seen tax cuts. the headwinds are there. that's why you see these companies invest heavily in that infrastructure coming technology, and shore up their overseas expansion plans. it will be a good stead for companies like xiaomi. for others, it will be more costly. haidi: tom mackenzie in beijing. let's get more thoughts on this.
we will go straight to bangkok via skype. mark newman with us now. great to have you. you have seen the market reaction across the mountains desk opponents supply -- across component supply. is this something that xiaomi has been immune to? it seemed -- it has seen extraordinary strength. >> it is not due to the slowdown in smartphones at all. there volume in china fell quite a bit, down 20% year on year. the china market is particularly challenging for all of the players at the moment. xiaomi is more than offsetting that with strength internationally. they have done well in india and europe. they are now getting some traction in western europe. gainl of that market share
is offsetting the weakness. overall, your point about the smartphone being we, they can't -- being weak, they can't-that. they're gross margin for the smartphone business was a bit disappointing, at least to us. think, partly, the have to try progressively to win this market share. haidi: that is their bread and butter. in terms of services, was that an encouraging metric for you? the -- it is really powered by china smartphone users. bulk.s the main
to us, the key question is overseas internet services revenue, the whole business model is they sell a piece of , at 8%e, a phone or a tv off gross margin, which is about operating margin for a season. and then pop it by selling services. all of the growth now is coming from overseas. however, how much money they are making is the big question. they got the numbers on the for the first time last night. it's about 4%. they are starting to see some progress, but it's really tiny compared to the amount of money they make her phone in china. : completely different story when it comes to jd.com,
underperforming, missing estimates when it comes to revenue. what is going on at the company? jd. don't really cover i don't know how to answer that question. shery: let me ask you about the economy.in the chinese we continue to see this impact in some of these companies, like jd.com, alibaba, and other tech operations as well. >> yeah, and i think the overall economy is showing signs of slowdown. the overall smart so -- smart phone supply chain come over weakness has seen across the board. a lot has pointed at the trade were is the reason. it's more than just the trade tensions. trade tensions could be part of it, but there has been a bit of weakness across the board for hardware, particularly in china.
between this a deal that is being proposed and no deal, i would rather be with a no deal. she is talking with cbi today. they are saying, oh, we like what you got because it is freezing everything in place. for the cbi is just one arm of industry. the businesses that should worry about what has been put in place are the business with innovation, new businesses, with the opportunities shut down by the steel. they: we also got opposition view with jeremy corbyn. >> we will keep our options open. our pressure now is on the government not to accept the deal that theresa may has brought back. we will vote against it in parliament if it comes up in its current form. shery: nav from hong kong, the latest on brexit. we just had prime minister may again speaking to the public.
it seems like we continue to see prime minister may appealing to voters since her brexit plan came out. do we know what is happening to that vote of no-confidence against her? will she be able to keep her job? di: looks like they do not have the 48 signatures they need to get that vote of no confidence started. she appeared to be in imminent danger the of the day that it could come to a number of votes anytime. but it looks like that has stalled somewhat. clearly, she is fighting for political life and this is a very fast-changing situation. but what was happening at the end of last week as ministers were leaving and people were saying they had enough votes to start the no-confidence process, that looks like it has slowed somewhat. it once was. asiously, it -- it is not
imminent as it once was. shery: we continue to see the markets impact of this brexit chaos, whether it is on the pound or on expectations for another rate hike by the bank of england. two years have passed. we continue to see the negotiations. bet the economic impact will against staying? jodi: the u.k. government says they will now way that impact. they were -- will npow weigh that impact. they will do a report on the economic impact. discussing,een businesses very much want some certainty. some of them are backing this plan, saying at least they know there will be a transition
period. and for many corporations, the hope is that there will be some future relationship with the eu in terms of a customs union and therefore they want to see that possibility. so for businesses, they want certainty. the uncertainty is the worst for them. haidi: the flowchart us to what the possible results could the, right -- could be, right? one of those possibilities could be a second referendum. do we have any thoughts on that? jodi: theresa may has continued to really fight against a second referendum, saying that would be a worst-case scenario. they've got a contract. they've got to move forward. they've got to vote. but we heard from jeremy corbyn who said he would keep that option open. there is a lot of support for this in the public in the u k -- in the u.k. there are hundreds of thousands of citizens who took the streets
in protest, saying they want a second referendum. that appears to still be on the table. jeremy corbyn saying he would be willing to look at it. but theresa may is saying no way, let's move forward with this deal. and it looks like that is what will happen, at least in the short run. she will try to get this deal through a very divided parliament. so much uncertainty on how this will turn out in the end. jodi schneider in hong kong with the latest on the brexit drama. in the meantime, to another with declines in the tokyo session. an unidentified nissan employee struck a dealhosn with prosecutors. at peopleking familiar with the story to get ofe details on this in terms
whether this is the same person to have brought forward the entire case in the first place. we know this came about as the result of and i do -- an unidentified whistleblower. shery: it is really hard to gauge at this moment how this developing stories unfolding. we some reports are the different media outlets. now we are hearing from nhk, saying that nissan provides with multiple residences outside of japan, paying billions of yen to buy and renovate them. that was not disclosed in their annual security's report to regulators, saying that nissan provided ghosn with a residences in places like rio de janeiro, beirut, paris, even when they did not have any business reasons for those houses. so we are seeing a variety of reports. of course, nissan is such a huge giant in tokyo. carlos ghosn a titan of the auto
industry. haidi: 20-year association with the company. n throws the -- it throws the lion into chaos. see a negativee that measured response when it comes to the markets so far. is give this context, this the only second deal bargain made after rules and laws were changed in japan. isn't lackingan familiarity with some of these corporate scandals and events, you have to wonder if there will be more these cases to come. continue watching nissan in the story. lots more to come. this is bloomberg. ♪
: it is 9:00 a.m. in hong kong and shanghai. this is bloomberg markets china weakness in big tech after concerns about the trade war. david: nissan is a drag arrest.g carlos ghosn's the board will sack him on thursday. rishaad: and the revolt against theresa may seems to be running out of steam. they do not have the votes to topple her.
carlos ghosn arrested along with greg kelly, a representative director on the board of nissan. this was the company saying that the lines between nissan and between nissan and renault is something that needs to keep going. david: we also heard from the trade and ministry -- from japan. yvonne: we have been watching k, pretty much indiscriminate when it comes to the apple suppliers. feeding through to the asian session. we did see the u.s. session with the tech wreck with the likes of apple falling close to that bear
market territory. line,ore coming back in down one and 1%. malaysia and indonesia are closed today as well. they did not take part in these markets. in the nikkei 225, down from 1% right now, the tech heavy stocks -- benchmark, like the taiwan taiex also down. about the dollar not doing a whole lot with the aipac tensions.- apec apple saying they have slashed their production on all three of .heir iphone models apple suppliers falling out of favor. basically see tech bearing
the brunt of what we see in japan and korea. samsung down 2%. still some green when we see lg display and sharp your asian tech shares have lost quite a bit of pricing and there's risk already this year. this nissan-renault alliance in question. nissan off some of the lows. and fell 6%. -- it fell is percent. -- it fell 6%. overnight, we did see the renault shares down 8.5%. it suggests the end of the carlos ghosn era. 2000% busier today and
then this time of the session. this is actual volume. this is where we should be based on all-year averages. 2000% for this time of the session. let's get more on this as investors reacted what has been happening in tokyo. stephen engle is with us. fluid story. what do we know? stephen: there are so many layers to the story. as to what it means to the i alliance best of the allies the carlos ghosn has been building and consolidating into a possible merger. . we will know much more thursday when the nissan board lands to plansnd perhaps vote -- to meet and perhaps vote to have carlos ghosn ousted along with greg kelly. this led to a several-month-long litigation within nissan. ghosn detained by police last night after this investigation
was handed over to the police, suspected of reach of japanese financial laws. according to the ceo who had that hastily arranged press conference last night. the nissan board is set. to meet thursday. nissan says the two men underreported their compensation to securities regulators during the investigation. nissan uncovered "numerous other significant acts of misconduct, including personal use of company assets." not a lot of the details or what the financial law breaches were. by kyoto news reporting that hisn may have understated compensation. rishaad: he reportedly had two briefcases. one was his nissan case and the
other was renault. david: what about the mitsubishi one? rishaad: let's look at this mercilessly. how much of this is about the structure between renault and nissan. nissan has a 15% stake in renault in nonvoting shares where is renault has 43% stake in nissan. n: and the french government has a 15% large stake in renault. rishaad: nissan is much better. stephen: nissan contributes much more to profits. they were not in favor of a merger or a further deepening of knot thatex ghosnian carlos ghosn had created between these three companies. maybe this was somehow a rejection of that. rehaad: is it the
-japanization of this. -- this? there has been some jealousy, if you will. yvonne: a fault line. : and compensated the directors and half of them are foreigners. lacken: he said nissan of transparency was the ticket because power was too concentrated at the top and repeatedly questioned carlos ghosn's legacy has a turnaround artist. he wondered whether it was the her oaks of one man or the hard work of many -- the her relics -- the heroics of one man or the hard work of many. let me give you some comments.
i have so many notes. the french economy and finance telling theary nikkei newspaper france plans to remain renault's top shareholder no matter how this transpires. the french government has no plans to share it best to sell its shares. france has -- no plans to sell its shares. the companies have a balanced relationship as it stands right now and the integration wouldn't be right, meaning the further merger. so the french like it right now. maybe that something that the japanese at nissan were growing resentful of. yvonne: and we have a board meeting later tonight as well in japan. meeting we have a board on thursday in yokohama. but renault is likely to meet tuesday night, tonight, in
france. yvonne: stephen engle, thank you with the latest on nissan. let's look at the setup, with china's looking like here today. we could be following the downtrend with tech stocks in focus. the hang seng futures are down 300 points at the moment. the china a 50, we did see losses as well when shanghai opens up. yields have been pretty much flat on treasuries as well. 6.9384hovering around . here is another interesting chart about what is going on in china. the market volatility on the u.s. side, relatively speaking, china is looking a little bit stronger. let's look at some of the stocks in the shanghai composite. 81% of the shares on the benchmark are trading above their 50-day moving average. 17% above the 200-day moving
average. speaking, you can find a little more comfort as a look ahead to the china markets. rishaad: absolutely. we can't not talk about trade. let's have a look at what is going on. what is occupying your time these days more than anything else? [laughter] >> biting my fingernails, looking at how everything -- you know. it's not worth a lot, but better than some of the alternatives out there. you look at what is happening in brexit, in apec, or with the looming g20 and this confluence of worrying events. w2onde -- wonderful confluence. storm.: a perfect
david: what kind of market events should we expect? it's not doing well anyway. >> we are not seeing any markets price any of those things in actuality. the chinese stock market is coming up at the moment, purely because, on one hand, people think in china there will be a deal in the g20. they believe there is a huge stimulus coming through. if there is, there will be a huge devaluation in the renminbi. on the brexit front, things will get uglier and uglier, it would appear, in the near term. things will get much worse before gets better. and maybe the fed will get the message that the market is trying to send them with the bongos going down instead of up. yvonne: everyone earlier this year was saying what will be the
catalyst for things to turnaround? none of those things have turned around. earnings did not help. midterms did not help. what else could turn it around? if the g20 is not the answer, is the resolution the only thing we could get? >> brings it wrong, trade going badly wrong, that may be the -- brexit going wrong, trade going badly wrong, that may be what is needed. david: much more to talk about. be staying with us. paul allen is with us in sydney for an update. nancy pelosi is facing internal opposition to her becoming speaker of the house. representatives say they will not some court her and call for new leadership. pelosi for her
service and say that it is time for a change when the democrats take a house in january. the melody government and the reserve bank of india have called a truce and will jointly studied official demands for sharing capital. the r.b.i. will farm -- will form a panel after a board meeting that lasted more than nine hours. the two sides have been sparring for weeks on how much capital the bank needs and what lending rules should be. ben solomon of saudi arabia has given a speech on foreign policy of saudi arabia has given a speech on foreign policy. he made no reference to what month.d in istanbul last he did talk about the need for oil stability and the war in yemen. israeli officials have chris's airbnb'save criticized
decision to remove rentals in the region. critics have long accused airb profiting illegally. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm paul allen. this is bloomberg. ♪ up, tech causing trouble across the markets. are there any bright spots? theresa may face -- rishaad: theresa may facing a tough brexit battle. this is bloomberg. ♪
is on: -- yvonne: we did see the 692, a little bit of weakness coming through here for the yen. take a look at this terminal chart. now that we see the trade tensions weighing on the currency, one thing to note is the one-year treasury bill yield 12-month.e it could bode that live in the currency moving forward because, with the fed still hiking, that pboc easing when it comes to policy, the gap could continue to grow. it could help them offset some of the impact of tariffs from the u.s.
david: astounding how u.s. stocks are trading. bearishnessames of on the chinese currency, 8.5%. here is the thing. the economics do point to the yuan weakening further and the dollar strong. why haven't seen -- why haven't we seen the outflows? >> because you can take the money out. the gate was broader in 2010 than it is today. it is almost impossible. everybody is allowed to change $50,000 a quote and from renminbi to dollars a year. it's not impossible. .t will continue
one of the easiest ways to buy diamonds and swallow them and get on a play and go to the bathroom in a country that's in another country. the outflows will pick up again at some point, literally and biologically? -- biologically. rishaad: it just have to match withople putting money in those who are taking money out. >> we see the yield differential continue to increase and roll down the curve. stimulus more and more to save the economy, the renminbi has no where to go but down. david: brexit? rishaad: yes. what kind of a deal is this? >> it is brexit in name only. you actually stay in terms of what happens day-to-day and how things
operate. you just a have any say in what is going on. you say -- you can say politically that that is the only consensus achievable. so many people want to stay. so many people want to leave. it is a compromise, but it is a really rotten compromise. is all member read, including the united kingdom. only got to six and you have come across that. what it does say is that it will not get through parliament. if you do the math, the brexiteers won't go for it. even people who want to remain won't vote for it. says thatrticle seven the u.k. will be in the eu without any mps or commissioners or court of justice judges.
and excused from attending summits as well. if you want to take the temperature, read what the tabloid papers are saying. it's not too positive at the moment. the more they read down and get to article six and seven, you just mentioned the arctic -- the angry they are going to get. david: will the vote take place this year? it is only big mess. i'm try to understand where we go here next. >> so does everybody. there is such a limited timeframe for this now. the way i tried to describe the decline, from the beginning, the u.k. and the eu have been playing chicken and driving toward each other. forinstead of preparing hard brexit, we have dropped our glasses to the floor. rishaad: arriving at meetings with the european commission
without one's briefcase to note. >> exactly. in serious terms, raw power politics. the eu has the power. the u.k. don't. they either have to bend or walk out. rishaad: thank you. you can watch and interact with the charts that we use. you can use them for key analysis and save them for future reference. ♪
--id >> societe generale >> david: societe generale has agreed to pay fees for the sanctions for doing business with iran. rishaad: spacex is hoping to raise $250 million. initial guidance of the original , yielding 45 basis points above libor. yvonne: we are coming down to the open of markets in hong kong. we are extending the slump in the asian markets. a-shares not looking too good either. down.ina 50 a futures
a little more weakness for the renminbi, hovering at 6.94. we see what is going on with movers. xiaomi earnings have been front and center. a mixed bag, but they did swing back to profit. their revenue climbed 49% from a year ago, thanks in large part, no surprise, to smart phones. the operating profit slumped quite a bit. stock up about .4%. they announced a partnership where xiaomi will take over much of the smartphone business. this is the photo app company. still watching that tech fallout. tencent and aac technologies all falling more than 2%. it is pretty ugly how things are shaping up, not just the the trade tensions, but the apple
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$5,000. reporter: basically, everything is $5,000. down. , moving into the open here. everything is looking -- at the moment [inaudible] offloading when it comes to stocks. tencent, down. a-shares also down. looking ahare market little better than the rest of the region. about 1%w following by today. see,ost tensions we did that would be what is to blame here. sent shockwaves across
the net sex overnight come a but take a look at some of the movers we are watching. i have been watching at some of the luxury stocks as well. analysts were saying they are seeing a slowdown when it comes to demand. overnight, the likes of swatch dropping 5%. we are seeing a little bit of a downtrend when it comes to luxury stocks year. after we heard from the wall toldt journal, they have suppliers to/some of the orders for the latest iphone models. you are seeing the chinese suppliers here.
-- down 3.5%. tech stocks rebound yesterday. we are really erasing some of those gains that we saw yesterday. i think more than 50% of the revenue comes from apple itself. the head of china liquidy's joins us now. again, what has get a discount off -- case this one off? beene tech sector has under negative sentiment for the whole year. there was quite a bit of concern. we are seeing not just a trade
war concern, but also a down cycle. for us, the tech sector is a very big sector. subsectors, -- anchor: especially long-term investors. everys a question we ask day. do you see them now as attractive and wish you bought them now question mark -- bought them now? subsector of hardware is the difficult one. good ones, but very few of them are companies for a substantial time, so that has been the biggest challenge for the
hardware, but if you look at the consumer, i think there is a higher possibility of finding them in other subsectors. one or we could find better needs and opportunities. hardware is the one where we find difficulties. anchor: what is the problem with hardware? is it the lack of pricing power? what is the problem? >> what we have seen is the same thing in china. a lot of manufacturers, phone .akers there is always pressure on pricing, it has always been difficult and you know there will be competition coming up. we are talking about one
company which is essentially a hardware company. they are trying to say we are an internet company. companying about a which came out yesterday. to give them the benefit of the doubt, i think investors , you cannot fight against currency impact. your pricing power continues to weaken. with these, it remains questionable about how much that
can so. the revenue was breakdown? they rely mainly on hardware sales and internet profit is very high. anchor: the bottom, not the top. >> correct. you never know how much they should then from hardware because they never show the breakdown. company continues to depend on selling and marketing and advertising as well, so they spend a lot to promote it. profits,to boost their you can never tell how much they are making. up to: how does it stack a company like tencent? >> i think tencent doesn't have
the burden of hardware. also susceptible to [inaudible] more so in europe now. in the basket of moving currencies that they have managed to hatch, the company has real change. we will wait and see. anchor: all of the funds have a percent eight holding in tencent tencent.olding in that is where you are going, towards the internet valuation side as opposed to hardware? >> i think it is one thing in china we focused a lot on. differentnitely very than their parents.
consumer companies do not see it as a technology. time to playore more games or for leisure and to do things on their phone. you could see them as a proxy to the long-term. there is a lot of noise going on. if you look at the business difficult to replicate in our view. >> when you construct a portfolio, there is an assumption we have seen that all the way down to soaps and shampoos. in longer-term, we are talking about these things. does any of that affect basic
assumptions that we now have longer-term of the chinese consumer? driver of the growth is the exports. growthger driver of gdp is going to be domestic consumption and it is driven by the millennials. this is where we are trying to moderation, however if you look at the stock market, it .ends to be rather inefficient they tend to over by and oversell. most pricing is in the doomsday event. the consumption is pretty ok.
i'm not saying it's going to be as rosy as in the past, but we must see negative growth. with that, we are still positive on the stock market. it has been a bit too negative. have an a share portfolio. are you doing anything? ismost of the portfolio structured in a way for a longer term trend and that is where we want investors to be involved. if you have a longer-term they can buy and hold for a very long time. some of the names you mentioned early on, these are the ones
that are able to capture the longer-term growth. to worry about environments, social and some of these companies as well. it takes a lot of hard work. theor: i want to return to tech team -- texting -- tech theme. what they look through as well. >> you heard that story is last year from apple suppliers. consumers.me for most of the network will be
commercialized until 2020. next year could be very difficult. are optimistic about it so if the sentiment was , still there -- still there stocks got selloff. now that the clients are not you, well, 5g will help but the shipment will be so small that the impact will be significant. very quickly, the 5g is a space that we are still exploring right now. we are still looking at
traditional operators. interesting. it could be more of the high-end manufacturers. we meet heress again in 12 months and have a look. thank you are much from bloomberg intelligence. this line here, mitsubishi noors, the ceo says there is need to review. we have more details on that one. tokyo, a substantially higher volume. overnight, we will talk more about this.
out what iss find happening, first word news. then, the latest on attempts to leave the european union. revoltanticipated against theresa may appears to be running out of steam with opponents yet to reach the threshold for a challenge. she appealed for support saying it is not some political theory. must be the deal debated and voted on. >> it must be clear to our british partners that there will be no renegotiation. the text has been negotiated and talks are at it british colleagues pesticide, but there will be no renegotiation. reporter: the white house has
restored gemma costas trespass, ending a 12 day talks are at drt began with a heated confrontation. cnn has dropped legal action against the white house, however the administration has imposed new rules. residents of tijuana have staged a protest against central american migrants, saying they pose a threat to public safety. they call the caravan of people in invasion. several hours as new security barriers were installed. a disgraced chinese security reappeared after being gone for weeks after being accused of tax evasion.
ispopularity in washington based on [inaudible] you get caught by the fluctuations up and down. ♪ anchor: now for a look at some of the stories trending. journal subscribers are reading about the insider trading of a former ubs officer. she used a so-called burner phone. on tictoc, a history of black friday and how it became america's greediest holiday. and, why billionaire investor
ray dalio seems a parallel between today and the 1930's market. dalio, speaking of ray he says he is not worried about the debt situation in china. he said china can handle a debt crisis and still has the place to invest. >> chinese debt is mostly in their local currency. the amount of debt is very small. now, you are dealing mostly with an internal issue. also, the lenders to china are in their system and like i said, the capacity to handle that crisis by spreading it out in one way or another is quite large and they have the expertise to know how to do that.
i think when you look at that cycle, there were four cases in which the united states had major debt crisis and they were able to be managed. in themple i gave 1982-1988 crisis was the ability to spread that out. china has that ability. i think everyone is focusing on that and -- to focused in on that and they are not focused on their productivity growth and how they are making changes. i think a bad year of growth will probably be twice as good in terms of that productivity and if you look at indicators , quality ofvity infrastructure and those kinds of things, they have reasons to
continue to have high productivity. to me, it looks like their version to do a restructuring. it as a proactiveas basis and most of the other crisis andad the then you had the reactive. i'm not worried about the debt situation.he debt i believe it is going to be a very good place. that was ray dalio it speaking exclusively to bloomberg bear earlier. talking about movers here, it is hard to pinpoint a storyline, but we're -- we are watching these. they came out saying that perhaps the smaller cities could be the property prices that
fall. perhaps, it is actually coming to an end and we actually have optimism around these of late yesterday. they are mostly higher here because there is a lot of expectation that they will have to loosen up on some of these. these atke some of half of percent today, it is interesting how big this is at the moment. mortgage rates are starting to .all as well at least in the margin there, we have seen some in china cut their mortgage rates. this is bloomberg.
♪ let's get you a quick check of the latest business flash headlines. forproduction orders iphones two months ago. the washington journal says it is slashing forecasts. up to one third of the 70 will have prices reduced between the launch and february. anchor: jd.com falling for a second day. sharef or earnings per almost half the level a year ago. over $15evenues over the25% increase year, the also the slowest
growth since draghi listed in 2014. since jd listed in 2014. reporter: stock performance of e.m.'s over mobile devices. in september, seeing $16 million. xiaomi has entered [inaudible] on emergingmore markets like india and southeast asia. anchor: coming up, we will be talking about brexit and discussing what it means. reporter: internet and xiaomi was basically better than expected. we will break down the numbers. it is it an internet, phone
rishaad: almost 10:00 in singapore, welcome to bloomberg markets. stocks slide as big tech weakness spreads to asia. investors pessimistic about the trade war. david: following the understanding -- the arrest of understanding millions of dollars and the board will suck him on thursday. -- sack him on thursday. rishaad: theresa may did not get enough support to -- her critics to not get enough support to topple her vote.
david: the three market stories, tech, apple, talk about the brexit and nissan. rishaad: and trade. yvonne: it is interesting when brexit is the better news of the it showsn the fact -- how much bad news is what we are focusing on. rishaad: this has not been priced in. all of this bad news has not been priced in. there could be more turbulence for the markets which we have seen all year. but talking an hour ago. you see red out there. let's check in with the price tag. down your1.2% weakness for what is happening in tokyo. this is something people have been labeling the tech wreck because the nasdaq was
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