tv Bloomberg Markets Asia Bloomberg October 16, 2016 9:00pm-12:01am EDT
have a look at the current see .arkets, a dollar run-up 98.14. back to levels of last month. have a look at dollar-yen. the fixing comes out in about 15 minutes from the pbo see. c. the pound is continuing its grind lower. that's the biggest drop so far across g 10 currencies. offshoresia, the renminbi at a fresh six-year low. again, it is about dollar strength. if we get a fixing north of that , don't worry.
cut. let's get to first word news. >> china has sent a rocket into orbit. it was the third launch of the year with two astronauts heading to the local oratory. -- the laboratory. send a crew too the moon by 2025 and land an unmanned vehicle on mars. died and24 people have floods in central vietnam, with eight more unaccounted for. a week of torrential rain force more than 100 houston homes into floods and cut links between the north and the south. they are now bracing for a powerful time soon -- typhoon, which has swept to the philippines. the people of thailand have been
told it may be 12 months before a successor to the king is named. his son the crown prince is the heir apparent, but has asked for time to grieve. for thehas been set e king's a new cbs survey shows women in key battleground states increasingly prefer hillary clinton. they give her an overall 6% lead. donald trump acknowledges he has lost women, but blames the media for rigging the election. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. haidi: thanks. shares in crown resorts
slumping with 18 employees to attain for suspected involvement in gambling crimes. haidi: let's get the latest on this. paul allen has the story in sydney. it all began to unfold late last week on thursday and friday. authorities raided crown offices and rounded up 18 employees, three austrian and nationals, including the head of vip gambling. china often, so that raises questions about the .iming of the raid as for the official line, australians are under criminal detention for suspected involvement in gambling crimes. what has been the
reaction to all this in australia? ace batemanput out confirming the detentions have happened. crown is still waiting to hear details on what the charges are, if any, so not much the crown has said. the government has taken an interest. thatre saying they hope consular staff might be allowed to visit those detained in the middle of this week. what kind of financial ramifications could we see for crown? paul: crown the worst performer on the asx today. crown it's in the process of building a huge new casino in sydney, their first in the
state. it is targeted at chinese gamblers, so the question is that with the crackdown in macau , is this part of a track down on a listen -- on you listen funds going into gambling broadening out. all this uncertainty is not helping that and playing into that poor performance were sing in crown shares at the moment. haidi: paul allen with the story in sydney. china's president warned the global recovery remains fragile. summitthe annual presented a united front on terrorism and reforming the global financial structure. summit host indian prime minister says he wants to see trade between the nations double
to 500 billion u.s. dollars by 2020. group of countries that account for a quarter of a global economy. is economicg this malaise and political angst. you only need to look at brazil and recession, south african political woes, russia battling against sanctions, and weak oil prices, then there china and the slowdown here, the law often exports, and the chinese ,resident addressing the summit giving a gloomy outlook on the global economy to take a listen. >> the economic recovery remains fragile, global trade and investments have slumped, and commodity prices are fluctuating. the underlying proms which could trigger a new financial crisis have not been solved. >> the president called for
economic global cooperation and focus on increasing competition between brics.ntries in the there's also a developing deal on a gas pipeline shipping gas from russia to india. there was an agreement amongst brics nations to set up a ratings agency. those were some of the things that they looked at during the summit, and there was focus on trying to change the governments of bodies like the imf and world bank. rishaad: terrorism high on the agenda. -- prime minister saying no surprise that india being the host of the summit and
the victim of multiple terrorist attacks wanted to put it high on the agenda. they wanted a united front for this, the reality of courses that there are great divisions. china has a strengthening relationship with pakistan, india's historical rival. india is rankled by the fact that it sees china putting roadblocks in place when it tries to tackle terrorism. that is how india sees it. we saw china blocking a ban on a pakistan military group. china has stopped india from becoming part of the nuclear supply group. india is looking to russia as an alternative, growing its ties their, signing deals with russia to buy helicopters and an air defense system as well. that raises questions about india's relationship with washington. had wantedter modi to strengthen ties, but u.s.-russian ties are frosty
trading week, the latest business flash headlines. >> china construction bank has agreed to a $743 million swap. it is part of a larger framework deal to cut the debt ratio. it is the second debt relief program revealed in the past week. chinese policymakers release guidelines reducing corporate debt. will set theyushu price for its ipo, expected to be $23, and would be the top of the range. the company will list in tokyo on the 25th. the company seeking to raise $4 billion and reduce reliance on japan by investing in residential and commercial property across southeast asia. evolution will buy a mine from new crest. agreed to by
the copper and gold project, but the deal needs regulatory approval. foras raised its outlook 2017. rishaad: japanese equities heading for their worst year since 2011. guest has been rotating out of emerging markets into tokyo. let's find out why. great to have you. explain your strategy of getting out of emerging markets. >> it is a short-term call for now. emerging market equities have benefited from falling interest rates and a weakening u.s. dollar as fed expectations for a
rate hike got pushed back. with the dollar in proving again , the u.s. dollar coming back up , that should have a negative headwind for emerging market stocks versus japanese stocks, where strength in the yen has held back the market. positive. be a still a markets are favorite in the portfolio, but given the trends in the u.s. dollar for now, some rotation out of emerging markets, which is becoming a bit of a consensus trade come into japanese stocks shorted and underweight makes sense at this stage. rishaad: you have in your notes that you are not searching for yield.
yield is expensive, but risk is cheap. having a truism, but said that, as that part of the reason why you have this lurch towards emerging markets? >> absolutely. if you look at the whole space chasing yield, it has just become one take momentum crowded trade. has been on the back of years of monetary easing, quantitative easing to compensate for fiscal policy. that is just too crowded, and has not been that cheap in many years. so staying away from bond proxies which have benefited from years of quantitative easing and low interest rates. december isay that
a given for a hike. that you see if we get a donald trump in the white house? >> first of all, if you look at the u.s. data and inflationary pointres, we are at a where they should be at a rate hike. we had a soft patch recently, and there seems to be a broad-based rebound the, but globally also. it seems like we are past that and inflationary pressures are showing up. even if we get a rate hike in the u.s., it's not in the a significant monetary policy diversions that we have seen over the past few years, so right now central banks in japan are looking for
ways to taper back on those quantitative easing programs. we are past the peak of that monetary diversions trade, which means a rate hike by the u.s. is unlikely to have the same effect it had last december when growth was weakening everywhere else except for the u.s. and monetary policy diversions was extreme. a rate hike in december will surprise the market that much. rishaad: just getting at the , 6.71, something along those lines. also reports that 50 billion yuan has been introduced into the system with a seven-day reverse repo. that concern you given the
lack of liquidity in the system? >> lack of liquidity in the concern,s been a especially the bond market and some currencies, but at the same time, the direction in the yuan fixing is on the back of the dollar appreciating. against the basket, it is actually quite stable. we've had six days of yuan weakness, and the fact is coming with the chinese data in proving , that doesn't worry me as long as growth is improving, and that's obviously in china. it has been set weaker, i apologize, 6.73. had 6-7 consecutive
days of weakness when it comes , does this just come down to the dollar affect we are seeing at the moment question mark -- moment? absolutely the dollar affect, and the dollar is depreciating ants the pound, the yen, and more solid currencies, so it's the dollar effect. haidi: thank you so much. next, apple's push for a brighter screen that could dull the outlook for japan manufactures. rishaad: the reasons why. that is on the way. ♪
.3%re-trade, losses of adding to this mixed session across the region. have strong earnings from the u.s. expected. the big banks and tech, 25 percent of the s&p market cap is expected to report this week. dominating thebe trading floor across the region. the aussie dollar looking like this, downside after coming up as the strongest performer last .eek rishaad: passengers will have smartphone samsung note 7 confiscated. reporter has more on this. why weren't these measures brought in sooner? they have been cracking down, but it looks like now that the
phone itself has been canceled. it is almost impossible to distinguish between a good phone and a bad phone, so the band reflects this total shutdown of the device, which can cause damage on a flight. this is what safety regulators are afraid of. apple, perhaps you could argue they are the main beneficiary. how do they plan to change their screens in the next iteration of the iphone? 7 has an organic led screen, not that that has to do with the recall, but does represent the cutting edge of technology. most high end the smartphones feature oled. the iphone doesn't. apple is trying to shift towards
arrow. slight down going onok at what is in the broader context of the asia-pacific good we have the shanghai and hong kong open on us. week: we are coming off a when markets attracted a lot of inflows. started for the asian trading week, we got of fairly weak fixing out of the pboc, spreads widening. when you look at the chinese renminbi, it is strengthened against its other peers. to 6.74.g today closer there we go. we knew look at the open here in , three things i want
to mention. , retail busy week, gdp sales, factory output, money supply, new credit data come all out at some point this week. eventsre a lot of risk did will they support the narrative that the economy is improving? that is one. the second thing is you have toulators in china looking create restrictions. into friday,gh seeing it climb further this morning, that gives you an indication what made might see. one trading debut on the chinese mainland, different day, same story, live it up, doesn't matter what they do, doesn't matter what the company is priced at, there we go, 44%.
that's the same thing we see day in and day out, ipo's go through a trading debut on the mainland. the difference between regulation in price. rishaad: thanks a lot for that. haidi: let's get over to first word news. crowne resorts plunged on news that china may have launched a criminal investigation. review says ff onhave detained stamp gambling related crimes. --y's president has warned china's president has warned that the global economy is weak. speaking at a summit, he said the underlying causes of the 2008 crash have not been fixed and the threat remains of a repeat. halfroup represents worlds
population and a quarter of the world economy. the economic recovery remains fragile, global trade and investments have slumped, commodity prices are fluctuating. the underlying proms which could trigger a new financial crisis have not been solved. >> the tough talking president of the philippines says the south china sea is off the agenda as he leads a business delegation to beijing. vowed to take his jet ski to reclaim a disputed reef in the area. it's the first time that president xi jinping has invited of philippine leader for one-on-one talks. >> i will go to china. i have a feeling we are ok with them. let's not talk about
disputed islands. i need to talk to china first. i will tell them to let our fishermen do their jobs. apple's desire for new screens is pressuring japanese suppliers. has -- samsung has 90% of the market. is raisingays also its game, shares are surging. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. chinad: we are looking at focused hedge funds bouncing back as the stock market recovers. mean that the industry will soon be making a comeback? have seen a difficult environment for hedge funds, but what's happening with the chinese market? market shocks, volatility,
especially for china-focused hedge funds. they have trailed global peers for the first time in five years , so it has been pretty tough. bloomberg ag on the slight rebound starting around june, a gain of more than 5%. slump of 8.8% during the market rout in january. some more positive signs coming from the fact that market volatility in the chinese stock markets plunged to the lowest in two years last month. rishaad: where do these gains come from? shery: mostly tech sectors, materials for some hedge funds. you're going to see that this hedge fund is one of the biggest assets of more
than $1.5 billion under management. they have had some bullish bets on hong kong listed firms like tech firms, internet firms, 3.3%mer stocks, gaining after a steady increase since june. they've also had some bearish bets on some hong kong listed companies they did not mention which ones they were. they saw some gains from hong kong and china listed stocks, specially mining, metals, chemicals, and more. haidi: does that signal a turn around or recovery for the industry? down 1% forr it is the industry as a whole. it could be a positive sign that china-focused hedge funds have been gaining for three months.
example, greenwood's asset management saying this fact that the hong kong-shenzhen stock connect is coming online, that could be a positive for hong kong listed stocks. rishaad: were looking at chemchina and sinochem denying a reported merger. sent sinochem shares soaring. haidi: they responded by saying there is no such thing. stockold us shanghai exchange that companies have received no information from the government. rishaad: this does, again the push for reforms at state owned companies. that always worked out well for investors. let's get more from our
gadfly columnist. speculating, but what would be the point of these two companies coming together? create a national giant, and i think that is the point a lot of the reforms, getting companies to join with profitable, big companies in creating national giants. i heard that they denied the speculation that they will merge , but it makes sense in light of the recent mergers that have taken place in the state owned enterprise reform. i would not be surprised in a little while we turn around in here that we were right and this was happening. rishaad: how does this all play into chemchina's bid for syngenta? >> syngenta is a massive company, bigger than both chemchina sinochem and sinochem.
it has 8 billion in equity, where as chemchina 1 billion and sinochem has -- it is good for the perspective of the merger going through because there were some reports saying that chemchina was having trouble raising financing for the acquisition. them, ainochem beside profitable company, would help them complete the financing and get the deal done, so it is good news if you're looking for the syngenta deal to happen. talking winners 'sd losers, where do sinochem bondholders fall. >> they are the biggest losers. they were buying into a company rated as a minus, and if it incorporates chemchina, which is
a basket case for a lot of bad companies, they're looking at a potential downgrade. they are also looking at leverage being added to the balance sheet. the same goes for stock investors. up,chem international went but from a stock investors perspective, you have more assets, but they were not be profitable. thank you so much for that from singapore. rishaad: our next guest things china will continue to weaken its currency and stick to easy monetary policy into 2017. haidi: that's in just a moment. this is bloomberg. ♪
we are still seeing declines across casinos here. along, crownings resorts down due to the rest of some employees. tepco once to restart its nuclear facility in japan. reactor, it restarts a that is about 97 main dollars per month. -- $97 million per month. cnooc down to the oil price. what is oil doing? 51 and some change? new six-year low for the renminbi.
,t is stronger against the euro won, so on and so forth. it's really about dollar strength driving everything. rosneft witht, i le buying aium of firms $13 billion firm as they struggle to cut debt helping them to reduce liabilities, the largest foreign investment in india and expected to be approved by the end of the year. haidi: pressure growing on theresa may to reveal her brexit strategy before she triggers formal negotiations. demand of thehas government submit its plans to a parliamentary vote. that have been raised efforts to curb immigration could cost access to the
european market. accountant took in 24 point $7 million at the top of the north american box office. the movie is directed and stars ben affleck. the girl on the train fell to third place. haidi: let's get a head start on the economic data moving markets this week. earnings, and that third debate. great to see you. you have a really strong print here. the gdp figures should just
confirm that the pumping of money and fiscal stimulus was enough to get it to target or above for the whole year. haidi: at what expense? >> leverage. we see of that, corporate leverage moving elsewhere. we have had news about her peerhmarks -- p thehmarks which point to banks not bearing all of that risk anymore, moving all the way to asset managers, leverages moving slowly but steadily towards the households. i think that is important. fine this will look
weeks,ut over the months, years, we see more leverage on the household. is part of the china bowl argument. china household that is very low, but you're seeing these trends starting to change. >> that's right. this means that the consumption story is ok for now, but it will be less assured once that leverage has to move from the corpus to elsewhere -- the corporate's to elsewhere. rishaad: what is the transmission for that? and at the danger here, least two bank ceos from state banks in china have said you have bad debt, but if you convert that the new converting bad debt into bad equity. >> they are now trying to clarify because everybody relies
berealized that it would saddled with nonperforming loans with no capital left. will turn that into the rest of the sector, asset management companies, and most importantly, insurance companies. insurance companies will then sell backed by this equity, which they will hold. cdhaad: it seems like dodgy o's at the end of the day. >> i didn't want to say that, but there is a big difference. the u.s. had household without any savings. here there is a huge buffer.
i can understand this because there is a buffer there. household isf the a way to dilute across the whole system. remember, they don't have foreigners to dilute to because they don't have external debt. , it is just the only way to go. haidi: what is the timeframe for these transitions? >> it has been accelerated. , leverageat growth continues to grow, see can't wait forever. you need to move those losses away from the corporates. it takes time, but it will happen. rishaad: a quick word, we did not get to talk about japan, but you were questioning in your research the sustainability of abenomics. >> two things on that, of course
it is unsustainable. i'm not even talking about reforms, which we have already discussed it now they have themselves in the situation of so thatero rates or others would suffer out of negative rates. by doing that, they need to decelerate the purchase of jgb's. now the dollar is king, but if it weren't king, you would not already see that. the boj will need to buy other assets. they've already done quite a lot on equities, 2% of their balance , and that could create losses for any move.
think the end of with a bojill come inquiry into losses. boj, soo refinance the this is why they have themselves ratesorner by doing these plus trying to keep the yen as weak as possible. i think that's why we will see for the next meeting that they will probably revise their inflation targets. they will never get there anytime soon. much. thank you so we have to leave it there. great inside. a lot more ahead. rishaad: more on japan. we will be discussing the shinzo abe. to
haidi: this is "bloomberg markets: asia.". rishaad: china launching a manned spacecraft. haidi: we are at the launch site for the liftoff. it looks spectacular. how did it go? >> it went pretty well. it was quite a success. it is rising ever upwards through space. over the next two days, it will rise 393 kilometers before docking with the spacelab they put up their last month. rishaad: how does this work. what would they be doing once they are well in deep space? >> the main thing they will be
experiments,t of testing out equipment like the bicycle.ed sickl there are three projects from hong kong high school student they will be working on while in space. this is aknow that source of national pride when it comes to the chinese government to what does this signify for the chinese space program? >> it signifies the attempt to be the same as anyone else, and even better. china unlike russia is not ,llowed to cooperate with nasa so china's responses to build its own rockets, owned manned space agency program, and now i once to build its own space station. they eventually want to get to mars by 2040, so it's about
best issues that have not been fixed. rishaad: a somber mood following the death of the king. a look at the movers so far in this monday morning. it is a big week ahead. very, very slow start to the markets. rishaad: it comes on stream in about 50 minutes. the recovery taking place after days of negativity. then we have the news of the king dying every solid rally take place after that. in many ways it removed the uncertainty. that is the argument that is being put. haidi: that's coming in. he wanted calm and stability when it comes to financial markets. the thai market closing up. a nice gain in the friday session. trading elsewhere in southeast asia is getting underway. in jakarta. haidi:
rishaad: a look at investor sentiment. >> it was all looking so positive for a monday morning on the first trading day of the week. asian stocks rally for the second session. the likelihood of the u.s. rate hike in december. much on the table following janet yellen's comments on friday. you are seeing a switch upcoming for most of the markets across the asia region. still some flatness on the nikkei and flatness in shanghai which is helping of the overall regional index. most markets have turned negative, led by hong kong. on friday hong kong had its first win of the week. back in the red today, led by a lot of casino stocks under pressure on the back of the crown resorts story. galaxy off by 3.5%. you can see only one stock is actually in the black in early trade. up by 7/10 heavily
of 1% and korea is weaker by 2/10 of 1% in the morning session. still seeing upside from engine shipping. the nikkei pretty flat. the yen and focus. a little upside from some of these exports stocks. casio computer is a front runner but also we have seen a little bit of both gains pared back. industrial production numbers are coming out of japan later today. yearng about 4.6% year on for the month of august. the other thing we are looking for is the data out of china. gdp coming through on wednesday. it's risen slightly to 6.7% of the year. still a lot of weakness coming from new zealand. the global milk rises continue to fall and having quite a bit of an impact on that market. a look at some of the currencies. we have the yuan fixed once
again today. low,holding a six-year down by 1/10 of 1%. then the japanese yen, which had been weakening on this dollar strength story rising now, up by 1/10 of 1%. certainly that has started to turn around a few of those gains we have seen on the topix index. rishaad: janet with a look at what's going on. haidi: let's get the rest of the first word news is making headlines. trump is taking a hit in the polls is allegations of sexual misconduct damage his bid for the white house. a new cbs survey shows women in he battleground straits increasingly prefer hillary clinton, giving her a 6% lead in those states. trump blames the media for
"rigging the election." president ofking the philippines set the south china sea is off the agenda as he prepares to lead a business delegation to beijing. before he was elected he vowed jetski it just the -- a to reclaim the area. this is the first time the chinese president has invited a philippine leader for one-on-one talks. >> i will go to china. i have a feeling we are ok with them. let's not touch disputed islands for the time being. we can get mad if they want, but it will all be in the wind. we need to talk to china first. i will tell them to let our fishermen do their jobs. two chinese companies have denied the reported merger. soaring.hares representatives responded to the
report by saying "there is no such thing." they told the shanghai stock exchange the companies have received no information from the government. evolution says it will buy a mine. 7.6 greeted me of two million u.s. dollars of the copper and gold project in new south wales. the deal still these regulator approval. they also reaffirmed production 32017. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: thank you, roslyn. resortshares in crown are slumping after 18 employees were detained in china for what is being called suspected involvement in gambling crimes. rishaad: let's go over to paul allen. what happened leading up to these arrests? it all began to occur on
thursday and friday when chinese authorities raided crown offices across china in a number of locations, and in some homes as well. grounding of 18 employees. three of them were australian nationals, including crown's at of the apia international gambling jason o'connor. that is interesting because he is not often in china. it raises all sorts of questions about the timing of this. was it a coincidence or a deliberate shot across the bow of crown as china looks to expand its crackdown on illicit funds flowing into offshore casinos? all of that is in the realm of speculation. always now from authorities is australians are under criminal detention for suspected involvement in gambling crimes. what has been the reaction we have seen so far? paul: crown has put out a statement but it's not a very long one. it confirms the number of employees are being questioned,
they have not been able to speak with them or get much more information at a chinese with regards to the reasons why these employees have been detained. the australian government has taken an interest as well. there is hope that the consular officials may be able to talk to those detained sometime around the middle of the week. -- it's too early to tell what sort of financial impact this might have on crown. we have seen the share price movement of water people telling you? paul: it's too early to tell. the prevailing wisdom is when in doubt, get out. we are seeing something of a hemorrhaging in the crown share price. one of the reasons is crown is in the process of building a new and impressive development a few blocks from me. this is one of the largest buildings in sydney. it will be crowned's first casino in new south wales.
its target market with the chinese highrollers. highrollers make up about a quarter to one third of crown's revenue. is australia the new macau? this is one of the questions in the vacuum of information. we are seeing the cell down a crown shares. rishaad: thank you very much. paul allen. haidi: the world's largest markets have vowed to boost trade. china says the global recovery remains fragile. rishaad: they also had a united front on financially that fighting terrorism. let's kick things off with trade. is. is what this body what do we hear on that front? at a time of slowing global trade volume the host of the summit, the indian prime minister called for the six
nations to increase trade. he was to see trade at 250 billion u.s. dollars doubled to $500 billion by 2020. the group of nations make up about a quarter of the global economic pie. that is valued around $16.5 trillion. this summit comes at a time of political and economic malaise, particularly for brazil which is in recession, south africa which has political problems, russia which is trying to grow its economy and is settled with the sanctions -- saddled with sanctions and weak oil prices, and the slowdown in china. those came through last week. in that context the chinese andident said at the summit gave a rather gloomy outlook for the global economic picture. take a listen. recovery remains
fragile. global trade and investments have slumped and commodity prices are fluctuating. the underlying problems that can trigger a new financial crisis have not been solved. tom: the chinese president also calling for greater global economic cooperation. they were moves between india and russia to look at developing a gas pipeline. there was an agreement amongst the brix nations to set up a ratings agency. they don't think they are doing a good enough job rating the emerging markets. there were other moves to try to improve trade volumes. of course there was an fda being discussed -- fta, a free trade agreement between russia and india and other nations. it's really getting into the politics.
we have different alignments when it comes to the geopolitical situation. terrorism high on the agenda. ? what progress having made there is any? india, andiority for they wanted to present a united front on this and everyone to work more closely together. the reality is india is one of for what he sees china blocking its attempts to tackle terrorism through moves in united nations. it is concerned about china's growing ties with its rival pakistan. you are seeing india developed and improved its ties with russia. if signed eels are helicopters and air to surface missile defense systems. called vladimir putin an old friend. what that means for u.s. ties is a new question. ties between moscow and
♪ rishaad: can i get a report on the gdp this week and it will see if the economy has stabilized. haidi: looking out for the impact of the beginning yuan which fell to a six-year low. tony.d: let's go with great to see you. what is your view here? tony: hi guys. the chinese yuan has been undermined by some recent trade
data. pretty weak data. we saw export data fall 10% of the month of september. it is the sixth consecutive --th of that monthly decline six consecutive monthly decline. they are likely to remain subdued in the third quarter. the gdpus will be on numbers coming out to give us a bit of an idea of the economic growth scenario. for all intents and purposes we expect china's annual growth levels to hover around that 6.7% to 6.8% level. have seen quite a lot of resilience when it comes to the aussie dollar. i you expecting any sort of move given china's gdp? we have risk of an upset surprise. tony: absolutely. the aussie dollar has been
supported. before we get into the chinese data we have to be mindful of some figures coming out beforehand. tomorrow, tuesday, we have september board meeting minutes from the rba. that will be looked at very carefully to garner a bit of interest about inflation and timing of interest rate moves in the future. on thursday we have the all-important employment numbers coming out. they will be camouflaged by the chinese gdp figures as well. the aussie dollar is a well supported in recent times. in the last 12 months we have seen a range trade between 68 and $.69. until the u.s. residential election is out of the way. aussie sterling is that a three and a half year high. what have a great story
about the dilemma facing chinese authorities today. weakness against the dollar because the dollar is strong, but a surging as the rest of basket of currencies. tony: it is interesting. we believe that weakness in the yuan will probably continue. looking forward i believe the inclusion of the yuan in the imf reserve basket will help strengthen the yuan by as much as 5% of the next few months. but we are seeing is short-term weakness of the yuan. we have got six-year lows against the dollar. look for that trend to reverse over the next few months as the yuan gathers a bit more strength. haidi: we haven't talking about what would happen if we get a trump victory when it comes to the white house.
what sort of risks would you see and how do you position yourself for that? been the u.s. dollar has firm and will remain firm this week. the market is pricing in futures at the moment at 70% chance of a u.s. rate hike in december. we have also seen the volatility spike higher around the 16 level. will he keep the u.s. dollar the flavor of the month until we get the presidential election out of the way. with the u.s. dollar firm we believe this is an opportunity now for importers and australia to take advantage of all the other currencies that have weakened like the yen, the euro and the sterling pound. it is quiteard interesting because you have got the situation in the u.s. where janet yellen recently came out and said the interest rate hiking system will be only gradual, which means any
significant upside in the dollar will be limited. that, but howt far does that play into this one? obviously nothing is happening in november. the market is 70% pricing in a rate hike in december. 0.25%. we have spoken about it for 12 months. it will probably come to fruition but we will have to wait for the u.s. presidential election to eventuate forget a more clear understanding -- before getting more clear understanding of the timing. fromad: thank you tony compass global markets. haidi: let's get a quick look at the headlines. passengers he tried to take the samsung note 7 on u.s. flights will have been confiscated and could face fines. the order significantly expands restriction on devices that are linked to about 100 incidents of overheating and fire. singapore airlines and dragon
air are the latest carriers to ban the note 7 from the cabin and the hold. samsungtaking a look -- down about four to 1%. rishaad: russia's biggest listed refiner is expanded in the india. they are buying has or oil for $13 billion. to cutve been struggling debt and this will help them lose their liabilities by more than 50%. it will be the largest foreign investment in india and expected to be approved by the year's end. haidi: pressure is growing on theresa may to reveal her brexit strategy before she starts negotiations to leave the eu. a group of lawmakers estimated the government put its plans to apologize rate -- put its plans to parliamentary vote. a so-called hard brexit scenario. rishaad: airlines and trouble.
♪ the people of thailand have been told it may be once before successor to the king is named. haidi: the crown prince is the heir apparent but has asked for time degrees. daniel, you are a frequent visitor to thailand. rishaad: former bureau chief for us. haidi: how long will the need? daniel: there is the constitutional process and what is the actual coronation. what they said so far is the coronation, he has asked for time degrees and they don't want that to happen for at least a year. the other funeral rites, the morning period, the cremation
and the coronation. there is a constitutional process that has the government notifying the parliament to formally invite the crown prince to be the king. they could do that process at any time. they could be weeks or months away. rishaad: what is the mourning period me? a new constitution as well. the timing of any elections should they need them. daniel: the government says everything will go ahead as normal as if the king were still alive according to the prince's wishes. there was a regent in place that can sign all the bills. these are jobs the king would normally do is head of state. from the government's perspective a timeline for a return to democracy will still happen. they can improve the constitution and potentially have elections at the end of 2017. haidi: and we have this one year mourning period.
they are calling it an avoidance of joyous events. how does this affect businesses? with -- its compared was uncertain before this happened how it would impact business. what we have seen is wanting to maintain continuity and not disrupt the economy. they are still -- they are avoiding a lot of joyous events, but bars are still open, hotels are still open. in a lot of ways it is business as usual in bangkok. rishaad: thank you very much daniel. the latest on thailand. haidi: some of the other stories making headlines. at least 20 more people have died and record floods in central vietnam, with eight more unaccounted for. authorities say a week of torrential rain has flooded 100,000 homes in three provinces. the rate has now stopped but the
region is now bracing for the powerful typhoon that is what the philippines and is heading west. rishaad: iran has invited potential investors to submit documents to prequalify as developers of its energy field. nioc is ramping up efforts to attract foreign business in january. the companies have until november 19 to list qualifications and the government will publish a list of eligible bidders in december. like a bit looking of a mixed bag. japan was on the way up and remains the case. shanghai composite still fractionally in the plus column. giving back some of the recent rises. haidi: we have sold looking like this. eoul looking like this.
the 2008 crisis have not been fixed. china's policy makers facing a plungingver the yuan, to new lows against the dollar. the exchange rate climbed last week against a currency basket even as it fell against the dollar. weakened today's fixing. north korea may face sanctions after firing a rocket. the u.s. and south korean defense officials say it was a midrange defense missile able to reach targets in japan and guam. it was the 23rd launch this year, and it also conducted two nuclear weapons tests. global news 24 hours a day powered by over 2600 journalists
and analysts in more than 120 countries. this is bloomberg. rishaad: this is "bloomberg markets: asia.". haidi: let's get the latest on the session. >> it is all about the casino stocks. we had that big plunge in sydney from crown, down 10%, the biggest slide in eight years on news 18 employees have been detained in china. you're seeing that followthrough , startbiggest competitor entertainment. that has filtered through to the macau can see no gaming players, taking a shine off the overall market sentiment and asia. galaxy down 3.5% in hong kong. others heavily sold off. ahead of that open in hong kong,
we had been seeing some upside for asian stocks continuing that rally from friday, but now weakness in the casino players dampening sentiment. hong kong off to the tune of .1%. southeast asian stocks coming under pressure as well. there is upside and again coming through in china gdp, the big focus for the week. tipped to comedp in at 6.7%. career looking better than it did, pretty flat. the yen weakening, export stocks looking quite good. .2%nikkei 225 up by . weakening, down .1% , 6.7420.
the yen,at there for 104.20. rishaad: thank you very much indeed for that. haidi: russia's biggest listed refiner expanding into india. trafigura oil.ng rishaad: tell us about the background. >> this is the biggest investment in the sector for a long time. rosneftion, the amount ish an investor consortium paying to pick up the second largest refiner in india. to the tuneeir debt of $10 billion. trafigura is a large
conglomerate. , they have gone on to record saying they saw value in this transaction. this comes on the weekend of the brics summit, underscore india's relationship with russia. it is fast becoming the third largest oil consumer in the world. what are they planning to do with the money? >> there are two pieces, deleveraging. they have seen value in this transaction and want to buy as .uch as $10 billion a large part would go into deleveraging.
this is becoming an increasingly competitive market. does not have deeper pockets to compete. attractiveing an oil-producing nation and the fact there is a large consumer global oil majors are looking at this as an attractive destination. more transactions in the sector the agenda. rishaad: vladimir putin was no doubt smoothing the wheels for a deal in the future. what was the overall sentiment surrounding that some of the just finished? >> the headline coming out of that was clearly what is going with issues concerning pakistan and terrorism.
prime mr. modi called pakistan the mothership of terror, trying to highlight the significance india is playing on the developments across the border. modi left nor stone unturned using this opportunity to highlight the challenger india is facing. rishaad: thank you very much indeed. with china-focus hedge funds bouncing back, bullish bets on china listed stocks paying off, does it mean we will see recovery? rishaad: let's have a look at this. what he you seeing? bit of a rebound starting from the middle of the year and continuing right now. focus hedge funds
have seen deeper losses than their counterparts. data from eureka, hedge funds focused on china are starting to recovery. it is a solid recovery. you can see the rebound of almost 6% starting june, and 8.8%after a slump of during the january route. . markettimism given volatility plunged to the lowest last month. haidi: where did the gains come from? shery: some tech firms doing well in hong kong, some consumer stocks doing well. this one hedge fund worth $1.5
see the fourcan months of consecutive gains, a gain of 3.3% in september. they say they made bullish bets on hong kong and u.s. listed internet firms, energy, consumers box, and some bearish bets. are seeing some gains from materials companies listed in hong kong as well as china. mean forwhat does this the industry as a whole? shery: for now, we have two months less to go for this year -- left to go for this year. the hedge sign is for fund index, gaining for three consecutive months, not to mention the number of funds that
have positive returns has tripled since june. analysts have been more given the hong kong-shenzhen connect. haidi: thank you so much for that. curtail itsk may u.s. operations. it could be part of a broader strategy. rishaad: su keenan has the details for us. su: deutsche bank continues to be in the spot light, the latest headlines, the ceo under pressure to cut costs as the legal woes continue to build. over ae bank mulling partial retreat from its u.s. presence according to people close to the matter. the pullback has been discussed with a supervisory report according to published reports. of the bank most affected are said to likely be the investment bank. $14 billion offer
to settle the pro put the bank under pressure. probe put the bank under pressure. talks are said to be ongoing. if you look at the 30 day stock chart, it is off that record low when the settlement offer was first announced. deutsche bank said to be looking at reducing its presence in the u.s. looking ahead, more bad , the note 7sung band by airlines as the crackdown looms. the latest on overheating gate on the overheating phone. that is next. ♪
who try tossengers take samsung note 7 smart phones on u.s. weiss may have them confiscated and pay fines. rishaad: it expands restrictions on the devices linked to 100 incidents of overheating and wires. haidi: why weren't these measures wrought in sooner? part of it is due to the fact that we went from a recall of the first batch of phones to essentially the entire production line being shut down. is impossible to distinguish a good phone and a bad phone. through an abundance of caution, u.s. authorities are h banning of them. rishaad: is there a sense of diminishing impact with these bad headlines? haidi: does this make much
difference. the stock is actually not down that much today. >> the main concern is the spillover effect. every time the word samsung and turn it off, not allowed is mentioned on a flight, that could impact sales of samsung's other devices, so that's something we will have to keep a close eye on, especially when we get earnings results later this month and for the last three months of the year. essentially it is like a negative campaign ad. time this announcement comes out on an airplane, it's campaign negative ad of the season, only this time it is samsung. move to apple, the main competitor in the smart phone market. they are planning to change the screens on its next iphone.
it has some japanese manufacturers scrambling. most high-end smart phones these days, including the note seven, feature oled screens. the exception is the iphone. apple will change that and come smartphone next year. the main competitor is samsung. apple is in the search for a new supplier or suppliers, and that has put the focus on sharp and japan display. they are at a crossroads. they will have to make and try to plant up test modules for apple. that represents a huge opportunity because it is a chance to expand their product a consumer ofinto
a lot of oled screens. on the other hand, it represents a pretty big risk. if apple decides it does not want this green's from any particular supplier, they are left with little maneuvering room. of pressurekind does is place on suppliers? ,> for example, japan display they have not yet made the commitment, but they are looking for financing for $1.5 billion. sharp is already committing to $1 billion for an early test run, and so essentially it is a gamble. they will have to try to make sure that it pays off. haidi: thank you. theaad: a quick check on latest business flash headlines. china construction bank agreed $743 million debt to equity pact
. it is saying it is part of a larger framework deal to cut yunnan tin's debt ratio. chinese policymakers have released guidelines for reducing corporate debt. haidi: italy's biggest bank merger could be a one off for now. combination was approved by shareholders on saturday and marks the first up in a process of consolidation urged by regulators, investors, and politicians. rishaad: jr kyushu will set the final price of its ipo today, expected to come in at $23 and would be at the top. the company will list in tokyo on the 25th. seeking to raise
markets: asia.". next. what's coming up >> we are talking to a guest ataking to us in singapore the seventh world bank singapore forum. talk aboutre we will infrastructure development and investment and the current economic environment, but what about the challenges we face in this region. china hedge funds making a comeback from the largest china focus head comes reversing losses this year. the stock market recovers, and then the weakening yuan continues to weaken for another day, all the impact and fallout next hour on "bloomberg markets: asia." china successfully sent
a manned rocket into orbit to establish its own space lab by the end of the decade. days: they will spend 30 carrying out experiments, food.ing testing space rishaad: they will try to land an unmanned vehicle on mars. andi: coal capital unlikely poster child for green energy. asia auto editor joins us now. what lessons does it offer for the rest of china? it is a typical industrial , one of china's major coal
producing provinces. as such, it has benefited from industrialization, but also suffered the effects of that, dirty air, once ranked below beijing in terms of air quality, and that takes some doing. it has become the first city in china to replace it its entire taxi fleet of 8000 vehicles and making them run just on electricity. they areme time, cutting red tape to allow more up,ging stations to come and the results so far have been quite encouraging. air pollution by some measures is down 18% in the first half of the year, and the number of charging points have been increasing. private operators are setting up charging stations, but is there a enough business to go around?
i think the idea here is to create a base of demand by , theg a big fleet of taxis classic chicken and egg question, so the government has decided to put the vehicles there, and in doing, hoping it will create the supply, the electric vehicle charging stations. charging is one of the major roadblocks to adoption. for this to take off, a private buyer has to come in. haidi: thank you so much for that. air pollution has been a huge concern for china. bloomberg got an inside look. ♪ >> what were looking at now in
largest vacuum cleaner and the world, cleaning the air on the nano level, then releases the clean air into areas like these. i am an artist from the netherlands. we are in beijing showing the first tower. this is beijing smoke, the stuff we are sucking up from the urban sky. this is in our lungs right now, incredibly disgusting. is made from carbon. if you put carbon under high pressure, you get diamonds. this is the first smog free ring. it helped to build the first smog free tower.
air technology has been around for 10-15 years, but always it has been into her and focused on filter systems. filter systems are not really that good. so we focused on positive ionization. we teamed up with scientists and engineers to make it more robust to handle more volume, and basically it is the largest one out there right now. china will invest billions and billions of dollars in their war on smog. ,e are definitely part of that making more of them all around china, hundreds of them, but we will know where it will take us. a bag of carbon. that does not make me feel very good at all. should we talk movies? rishaad: warner bros. the million,t taking $24.7
now topping the north american box office for the weekend. haidi: the movie is directed by and stars ben affleck. it beat estimates and overtook the thriller the girl on the train. rishaad: the accountant beat to other new releases as well. asian markets are falling on the first trading day of the week. equities lower, the msci asia-pacific is at a one-month low, the south korean won the weakest in three months. ♪
strengthening against other peers. david: tourism in thailand racing for a slowdown following the death of the king. let's start there. we are coming off the best day for the equity markets there in five years. i will be back with you in just a bit. we are seeing a pullback across global asian equities. every single market on the way , with the exception of the philippines and mongolia. the dollar continues its run-up. leadingysian ringgit declines.
up oilty story, most are , gold, unchanged at the moment. as with the dollar, yields on the way up across the region. 10-year, have a look at g 10, i get that up a bit later on. the story is risk off, everything going back into the dollar, yields on the way up. very heavy data week coming up. let's get to first word news. has one thenping global economy is weak and fundable to problems that could trigger a new financial crisis. he said the underlying causes of the 2008 crash have not been fixed and the threat remains of a repeat.
the group represents half of the world's population and a quarter of its economy at $16.6 trillion. set the final price for its ipo today, expected to be about $23. that would be at the top of the indicated range. the company will list in tokyo on the 25th. the company is seeking to raise $4 billion and aims to reduce its reliance on japan by investing in residential and commercial property across southeast asia. trump is taking a hit at the polls as allegations of sexual misconduct and an old tape of him making vulgar comments about women damages his bid for the white house. says women iney key battleground states increasingly prefer hillary clinton, giving her an overall 6% lead. has lostnowledges he women, but blames the media for
"rigging this election." global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. angie: shares and crown results slumping after 18 employees were detained for what is being called suspected involvement in gambling crimes. david: for more details, let's get to paul allen. what happened leading up to these arrests? paul: it's a big don't know really. there's not a huge amount of information. raids were conducted at crown offices on thursday and friday, 18 employees rounded up, including three australian nationals. among them was the head of the vip international gambling department.
in the absence of other information, analyst are looking at this and saying was it a coup incidents or did authorities wait for him to come to china before they conducted these raids. we have this line from chinese authorities to say that all strains are under criminal detention for suspected involvement in gambling crimes. what is the reaction in australia? crown treading very carefully here. they did release a statement this morning basically confirming that 18 employees have been detained. speakave not been able to with those employees or head much clarification from the chinese authorities about exactly what the nature of the suspicions are. when all strains citizens are detained overseas, the government takes an interest as well. it is investigating the matter and hopes officials will be able to speak to those all strains
sometime around the middle of the week. david: what sort of financial impact might this have? paul: you are seeing pictures of one of crown's newest projects currently under construction of a few blocks away from us in sydney, the new six star consent asino. if indeed the macau experiment and the crackdown on illicit gambling is expanding, what does that mean for these big developments, so a lot of unanswered questions. were seeing crown shares suffer today. and dragging down asian stocks. thank you so much for that. story is having quite an impact on markets right now. what is the update? >> as you can expect, quite a bit of week is coming through from the casino stocks in hong kong.
and we sawong open the casino players plunge, that had wide effects on the rest of the index. we had been tracking higher before the hong kong open. all coming under selling pressure. this is the picture on the australian casinos. that plunge for crown is the biggest fall in eight years. some of the among smaller casino players, in jim china listed in hong kong up 4% -- mgm china listed in hong kong up 4%. it has said quite a lot of impact on the overall market. hong kong and australia under the most selling pressure. there is upside from other markets, so that has seen the regional index come off the days lows, still on track to close at the lowest level in months.
were seeing weakness coming through in the yen, more a story of dollar strength. some upside in seoul, korea, and some gains in in china. a downbeat mood from the rest of southeast asia in terms of consumer related stocks. thailand close higher on friday, off by .3%, but at the volatility we saw last week. other thing to mention today is the fact we are seeing weakness coming through in emerging-market currencies. at its lowest level since july. not the best start to a trading week. angie: thanks. may be plunging to new lows against the dollar, but is
holding its own against other currencies. advancets biggest against the trade weighted basket last week. matche more on this next -- mismatch. this surging dollar on the one hand, and they need to adjust the fixing to make up for the surgeon the dollar. -- the surge in the dollar. a couple of weeks ago when china was on holiday for a week, the bloomberg dollar spot index was about one cent. we saw the pboc weakening the fixing. they avoid weakening me yuan -- the dollar.inst that is causing domino effects on its positions against other
currencies. this is a problem for the pboc. let's not forget that currencies do trade in pairs. has been draining funds, so what does this have to do with it. >> they have been in the market aggressively, so they have tried to strengthen the hold on the currency and the money markets, so they have moved to add daily open market operation. they've been doing it every day since the beginning of this year, so they have tightened it read the good news for the currency is if they are draining money from the money market, the currency will not decline to much. that said, the money market
rates don't seem to be reacting a lot. it had risen a lot before the chinese holidays, but has come back to reasonable levels. i think what the pboc is doing is managing fx markets. there are people saying the pboc has let the currency go. if you look at the past week or so, they haven't relaxed a lot of control. there -- l leave it angie: we will leave it there. david: were talking hedge funds. chinese-focused funds bouncing back. these bullish bets on china and hong kong listed stocks are starting to pay off. does this mean the industry will be making a comeback or has it made a comeback? let's take a look at some of the big players here. what you seeing? releas relief for the
china-focused hedge funds. they had a tough time. peersre trailing global for the first time in five years , so finally some rebound the continues through september. how there has been an uptick since june. that's where the data is coming from. we can see that in january, losing average 8.8%. some more positive. just the last month, the lowest bowl until the in chinese markets in two years. where do they gains come
from? shery: a diverse range of sectors. the tech sector and hong kong and china listed shares as well as u.s. list it shares as well as consumer stocks. one hedge fund worth more than $1.5 billion, if you just type it in on the bloomberg, you can see how they done in september, gaining more than 3% after surging around may or june, four straight months of gains to they had bullish bets on tech firms, energy, consumer stocks, also bearish bets on hong kong companies. they did not say which. we are seeing them perform in those sack. willller fund has done well by investing in mining , natural resources companies, and china and hong kong. rbi thank you so much.
it is gaining strength. we are seeing that yield curve steepen. she said that she would be willing to let the u.s. economy run hot to support the labor market. do you think these comments suffice? it has very much swung towards optimism that there will be a rate hike, where as a few months ago it was not so obvious. i think it is not clear yet. the market is feeling quite happy about this. we do think there may be some turbulence between now and the themeeting that may cause to think twice about what they're going to do. david: i was looking at your notes, the dollar index is above 98. the previous two times that has happened, this risk rally hit a
wall. are we third time unlucky at this point? >> it is telling us that we should be preparing for a moderate risk off here. the concern here is very much about what is going on with the renminbi. next week we have the pressure-opec meeting. oil, most of the soft commodities are fairly much on their knees and no real urgency to raise interest rates at the moment. angie: still u.s. dollar strength, how will that play out for asian and emerging markets? reasons for the dollar's strength is the rise in the money market rate. i talked about the fact that the money market hike at done the job of a fed rate hike.
so what we are expecting is a lot of economic surprises. the emerging markets economic surprise index is already nearly its lows. so we are expecting a lot of the to turn moreata negative, especially export orders. this function shows you every currency has fallen against the dollar. the question is will it be a false positive? are we going to see inflation pickup simply because of the currency effect here? dollar isy a strong the deflationary phenomenon. when you have the renminbi
devaluing, that is also a deflationary phenomenon it -- phenomenon. basically showing that were getting to the point where the bond markets are becoming very stretched against the renminbi so either this relationship is about to break down or bonds need to start rallying again. basically, a 1% devaluation in the renminbi has led to eight basis points off the u.s. 10-year bond yield. the taxi quite strong. david: when you look at the yield spreads, everything else has widened except the jgb market. what are you looking at a particular? >> i think there is a lot of
interconnected moves. whenever you talk about why is the 10-year doing what it's doing, people take a look at the jgb market, the bull market. overall, there is a feeling that high oil prices are leading to a bit of a race inflationary expectation. there is talk about the meeting ,his week and around tapering but the future prediction of inflation is still below where started -- the ecb so at the moment, were not seeing any significant reason to be raising rates. what could happen over the next few weeks is that the markets selloff, giving
policymakers room for pause. at the moment, i would not too hawkish on the u.s. dollar. angie: how does it affect your strategy? >> it makes us more cautious, turning cautious on what is going on in china. right now, we have 1.9% inflation friend -- print. happens withs what this property market and whether you can control bubbles when they are forming. we will see in a few weeks time whether it is time to step on the accelerator or be cautious. pick this up with
angie: welcome back. this is "bloomberg markets: asia." thailande people of have been told it may be months before a successor is named. let's ring in our east asian government team leader. houston will the new king be named? are two processes, one constitutional and one ceremonial. the coronation would not take lace for at least another year. they will have the funeral rites that go for a year, the cremation, and the official coronation.
there is another constitutional process that requires the government to notify the standing parliament at the moment, and they will invite the king to ascend the throne. once he does that, he is the king. beckett happen in weeks and months, but we do not know that. the government has not officially made the notification. again, it comes back to what this means for the elections. >> the government has said everything will go on as normal. they will stick to the roadmap or democracy. have an acting region and place it can sign legislation and do the things the king normally does. from that perspective, there is not much change. constitution,this one was approved by referendum in august and has not been signed officially, so the region can sign that and pave the way for elections. maybe late 2017.
how are businesses dealing with this question mark -- this? >> a lot of businesses are cutting things off. it is a sensitive time in thailand. participating almost voluntarily shutting down. bute: no joyful events, what about the hotspots where that stuff does go on? , a lot oft in bangkok the bar areas were closed the neon lights are turned off. there is no music going on. bars, restaurants, hotels, and the airports are open. the government has basically said we want business to continue and don't want to disrupt the economy.
>> the latest first word news. casino shares down after authorities detain 18 employees of australia's crown resorts. it included the head of its international highroller operation. the index is down more than 2.5%. panasonic and tesla to collaborate. sign apany say they will nonbinding letter of intent contingent on shareholders approving the acquisition of solar city.
if that happens, panasonic will start making the cells next year. china's policy makers facing a dilemma over the yuan, plunging to new lows against the dollar. the exchange rate climbed last basketainst the currency even as it fell against the dollar to a six-year low. week in today's fixing by the most in a week. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. >> checking the markets midsession and nation, those casino players weighing on the regional index the casinos under the most pressure. melco crown in the red.
elsewhere, mixed movement, more upside drum shanghai. japan coming out of its lunch break and adding to the morning session gains as the yen weakens against the dollar, all a story of dollar strength following janet yellen's comments on friday, increasing the likelihood of a rate hike in december. there's also been a turnaround coming through on the kospi index, up .4%. that's despite the fact were hold athe yuan its weakest level since july. it is still holding at its lowest level in about a month following that weakness we have seen coming through from the and also other
sectors such as financial and utility stocks. weaker, down .8%, the offshore renminbi holding at first six year lows following the yuan fixing. welcome back to "bloomberg markets: asia." deutsche bank may shrink its u.s. operations. it may be part of a broader strategy. to keenan has the details. headlines, the ceo under pressure to cut costs as legal woes continue to build. deutsche bank mulling a partial retreat from its u.s. presence. the pullback has been discussed with the supervisory board according to published reports. the parts of the bank most
affected are likely to be the investment bank. the initial offer to settle a probe into mortgage-backed security issues set off a selloff in the stock that has put the bank under pressure. aside $6bank has set billion for the litigation, and their efforts to bring the proposed find lower are ongoing. if you look at the 30 day stock chart, it is off that record low when the settlement offer was first announced. deutsche bank was said to be looking at reducing his presence in the u.s.. \ david: we are expecting another third-quarter growth reading from china. retail sales figures are also do. we have been asking our guests what they are expecting.
our next guest see signs of a shift. steadily towards the household, and that is important. fine, but overed the weeks, months, years, we see more leverage on the household part of the story. this means the consumption story but once that leverage has to move from the corporates to elsewhere, that's you monger is. room tohina still has maneuver on credit, but does not see that as a long-term solution. >> i think they can continue to increase credit growth for a while longer, another year or two at least, without a systemic financial crisis. used todit is being
settle existing debt. risks are there to growth, which is why we have started to see the government when it's comfortable with near-term growth numbers, pick up the baton again on reform. david: and one guesses he's not overly worried about yuan weakness. >> the lack of liquidity is a concern. time, the direction in the yuan fixing is modeled driven and on the back of the dollar appreciating. if you look at the yuan against euro and other currencies, it is quite stable. ofhave had six days in a row yvonne: -- yuan weakness.
that doesn't worry me as long as growth is improving. angie: welcome back. let's pick up on china here. the concern is that you have the property market curves, you have a possible curve on infrastructure investment, and whether not we will see the liquidity continue through the second part of the year is a question, and it's reflecting your concerns as well. >> i think we heard it on the tape there, a lot of foreign investors have been bearish on china and now is the time when they need to pay more attention to these things happening there. they are saying they are not concerned.
the crackdown in the china , but the china property market is ordered percent of their gdp. it is representative a lot of the growth. falling, the are currency is starting to devalue. prices,are pushing up the elasticity is not there on the other side, some people are not prepared to pay higher prices. it depends on which city. >> in terms of the property tiert, it depends on which you're talking about. from talking to guess this teiier isome think that still on a tear. >> that means they will have to crack down harder. is it a change in stance
or down to normal market operations? >> they are feeling pressure from the stronger dollar. they have been in this time weather has been relative calm on the renminbi. that has now resumed. we've had two days in the last wasweeks where the renminbi fixed by more than .3%. rishaad: this is the dilemma. on the one hand, weakness against the dollar, but a surge against the rest of the basket, so where does that leave them? crossesollar-renminbi the one they need to keep an eye on. the most important thing -- rishaad: the eurozone is its biggest trading partner. it is.
in terms of the financial markets, the one that seems to matter most is dollar-renminbi. seem to berkets ignoring the impact of what is going on. >> looking at what exports are doing, do the benefits of a tradeg the yuan on weighted basis offset the risks of capital outflows? the think the renminbi vibration will probably not help their exports much, but i think they feel they need to be doing something. it is almost an inevitability that the renminbi will be divided. the capital outflows so far are stable. if those pick up, then it becomes a far bigger concern for markets. >> we will leave it there. thank you so much. we talked yellen, china, good to see you. coming up next -- asia remains a hot spot
countries to be toppled -- doubled to $500 billion by 2020. the backdrop was economic woes and political angst. is in recession, south africa in the middle of a political crisis, russia's struggling with sanctions and china whiches, and has seen its exports long. whoeard from xi jinping gave something of a somber outlook of the economy and also a warning. take a listen. >> the economic recovery remains fragile. global trade and investments have slumped. commodity prices are fluctuating. the underlying problems that could trigger a new financial crisis has not been solved. he also called for greater economic coordination between countries.
we saw india and russia talk about a host pipeline, $25 billion pipeline between the two countries. they said they will try to fast-track the duration free trade agreement. the countries called on europe to give up two seats on the executive board of the imf copart of their challenge to the global economic institutions to include more emerging markets. david: right. asia remains a bright spot for infrastructure projects, but government and investors are working to plug a funding gap. david: right. bring in our southeast asian correspondent. what are the challenges facing infrastructure? when you think of the it'se of the industry,
because of a lack of viable infrastructure projects. what is the reason for that? about a lacklking of bankable projects to why is that problem persisting and what is the world bank doing about it? infrastructure is complex, big, many aspects, and it includes several components that you have to address to make an investment ready for the private sector to take. it also has to be at the risk appetite level that the public can take on. you are looking at the three levels that have to be addressed. haveirst one is how you well-prepared projects in a regulatory environment that is
dependable, and so this is the first thing. cases, even if you get this right, there are risks in the project. a long-term project involves a sometimesiables, so you have to have a guarantee like credit enhancement or something that will give more assurance. >> is this what the world bank is trying to do. what kind of products are you coming up with? wherecific guarantees some project depends on the government, the bank will pay something if it goes wrong or if the rules change, then you have a dialogue with the country so that you get this stability that is necessary for any long-term project. finally at the third level, we are addressing some needs that
investors have, especially portfolio investors. sometimes there will be an index you can benchmark against. sometimes they look at the regulations that may hamper investors to get in because they may want to get a project. ,hey may even like the project but there are some regulatory things that make it almost impossible to take this type of risk, so the world bank is working on these three levels. markets: in asia, which are prepared to be tapped? projects for the much in every one of the countries. some countries have a more global project and are developing instruments that facilitate and gives this a comfort to investors. great number of
pieces that put together and facilitate the interest of the private sector and the investor, but in vietnam, where the state owned companies, one of the things that is fundamental is the ability to charge for the service. have someyou have to changes so that people see the benefit and are ready to pay at an affordable level. i would say most countries are in good shape. they have to continue to address specific issues, but the potential and the appetite for these countries is very big, and the government gets it and is working to address it. bank has they world been criticized for being too --upied with property poverty alleviation and not
infrastructure development and what is your response to that? yes, you have to have a long-term, ambitious view. >> infrastructure is a very effective way to address climate change. when you think that in india we are going to create a massive new electricity generation capacity, the way you do it could make a huge difference for the next 20-30 years, but you also have to think that human capital are the most important things, ensuring education, health, that is the way to get balance growth. i think we are committed to that. seems to be the poster boy for infrastructure development, but a recent oxford they suggested that despite fact that chinese infrastructure project seem to be delivered on the expenseome at
of quality, safety, environment, and costs. what is your view on those conclusions made by the oxford study? >> let's take a step back. infrastructure is complex. sometimes when you put something in terms of a safeguard, it is good because you face some problem that is inevitable. you are more prepared to deal with them. things at when you do higher speed, any project will have things that are unexpected, so we have to look at each project and have to understand this is where governments sometimes have a role in reducing the risks to the private sector, because any project can face unexpected they are wellf
structured, well-planned, and in some cases the government has to be ready to take some of this risk, and you have to look at governance. governance is important for any infrastructure project because it often involves people and , andts the lives of people we want it to be in positive ways. is anda: currently there increasing anti-globalization sentiment in the world. is that the new normal, or will there come a point when the sentiment dies down? >> i think globalization has done tremendous positive things we can world food question in some country the and the globalization' distribution across all segments of the society being used to support some dislocated for a
number of reasons, but you also have to remember that most of the incidents are due to technological change, other changes in the labor market. sometimes people focus on trade because it is easier to talk about trade, but you have to look at the gains of trade were distributed and if trade is really that source of the dislocation and some labor markets. we thank you for your insights today. david, back to you. appreciate that very much. a lot more coming up next. david: russia's biggest refiner looking at expanding in india. we are live for those details. this is bloomberg. ♪
development. refiner biggest listed expanding into india. oil for buying essar $13 billion. david: we are tracking all those developments. what is happening here? >> the single largest foreign investment transaction in the sector. billion, rosneft with a consortium of investors. deleveraging their billion. $10 rosneft is making a big bed in the indian market.
india is emerging as an important oil producer in the region. it is expected to be the third-largest oil consumer in the region. david: i know what i would do with $13 billion, but what will they do with the money? large part of the transaction will go to reducing their debt. steel,d interest in power, and ports. part of the proceeds will be investing. they will invest in the refinery and the power plant. transactionne this because they see considerable value in the assets.
there is interest in the oil and gas sector in india because people are betting on the consumption of india's oil story. thank you so much for that. well, bloomberg markets: middle east coming up. david: what you have in store for us? >> as always, a jampacked show. we will look at rising liquidity pressures and saudi arabia, having an impact on the earnings from the big banks. we will break that down for you. you the latestt developments on the deutsche bank story. we will see whether they will shrink u.s. operations in the face of mounting legal costs.