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tv   Bloomberg Daybreak Asia  Bloomberg  December 22, 2016 7:00pm-8:01pm EST

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>> the asia-pacific expects a quiet day. as traders look to the holiday. over: barclays sued mortgage backed securities. a boost for the world's biggest listed copper miner. and seeing red.
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a special report from the city whose polluted air makes china good. yvonne: this is the second hour of "daybreak asia." after 7:00s just p.m. in new york. i am betty liu. as you have been mentioning, it seemed as if we were heading straight toward dow 20,000. with the markets having a bit of a change of heart. this rally isof going to last, particularly as the donald trump election becomes a reality. seene: it is a typical we volumes this thing. it kind of makes you wonder if we have topped out when it comes to the santa rally we have seen. let's see how things are kicking off with the opening in s eoul. david: not really expecting any
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big bets to come through. trading session in australia. in new zealand, new zealand shuts in about 30 minutes. australia has roughly four hours of trade. korea, flat. watching the currency closely. before i move away from the equity markets, we do have hong kong coming online, 90 minutes. the philippines could injure a bear market which would be a little bit ironic the weekend before christmas. poised for the worst year since the global financial crisis. extremes we have been following, the pound, it has been quite a year. 122.83. what else do we have here? south korean currency, pushing higher.
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1200 right now. the u.s. dollar, takes you all the way back to march of this year. let me wrap things up. where is my aussie dollar? aussie, where are you? let me get that up for you. thate back to levels of -- is a key support level. we head back to january. this is about zero point to the cents..s. -- 0.68 u.s. quiet for good reason. banke: the china central has taken steps to attract more foreign investors to the domestic on the market. haidi with the
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latest. this taper tantrum when it comes to the bond market. it is important to point out that has no policy setting powers. a continuation of a lot of rhetoric going through about improving and extending china's domestic bond markets. essentially they are saying they want to open up the bond market to create conditions for the yu an bonds to be included in major international indices. paymentsoving china's as well as monetary transmissions. allowing hedging of interest rate risks. clarifying investment and tax rules.
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basic practical things. there are about 370 institutional investors. they want to expand that. part of that is to create a reliable yield curve. there is a lot of distortion in this market where the government has been providing support. they really need this reliable yield curve in order to accurately price other securities. you take a look at some of the issues we are talking about, a reserve situation where they are continuing to fall. we saw the biggest fall since january. the pressure coming onto china's fx. getting more international investors in the bond market is expected to alleviate that. this comes at a
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precarious time for the bond markets. haidi: interesting timing because there have not been good headlines for the bond market. still the pboc doing tightening. stealth tightening. 40% of that is invested into chinese bonds. that has created something of a bubble if you well in terms of asking companies to issue debt. also encouraging financial institutions to buy up a that debt. betty: thank you so much. on the bond markets, in china
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which we have been watching closely. let's get to the first word news. haslinda: president elect donald trump says the u.s. should greatly expand its nuclear arsenal. and camerses policies hours after president putin reiterated his call for russia to reinforce its own nuclear forces. tomp has said he wants strengthen the u.s. military while keeping costs under control. lockheed martin shares falling after another trumped week. this one says taste on the f-35,dous overruns of the -- earlier this week the boeing president elect the cost of a new air force one
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could come down. president putin has suspended his annual news conference so he can attend the funeral. the event has been put back 24 hours to allow the president to pay his respects. his killer was shot dead at the scene. e italian government has approved support -- the plan has the eu's backing. for statee appealed aid after failing to secure a sale. they now value the bank at $520 million. italian banks are struggling $375bad loans valued at billion. amin.aslinda him betty: are please being sued in
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this.s. for allegedly -- lawsuit is rare for big banks, which typically cut a deal. su keenan is here with more details. u: the u.s. government has called barclays bluff. saying, yes, they deceived investors. see barclays stock took a 2% hit at the lowest points today. barclaysdown suggests is willing to take its chances with the new trump administration. the u.s. attorney said in a statement, very clearly, jeopardized billions of dollars of wealth for practices which were plainly irresponsible dishonest.
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the attorney general said with the filing, the u.s. is sending a clear message the department of justice will not tolerate defrauding investors. interesting to point out barclays is one of the last major institutions that has not settled. the u.s. has managed to extract 46 billion dollars from six institutions regarding the mortgage backed securities dealing. yvonne: what is the response from barclays so far? as to the response from barclays, it was swift and unequivocal. they are planning to take the government on, toe to toe. they consider complaints disconnected from the fax. we have an obligation to defend ourselves against reasonable obligations and demands. linedys is said to have
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up an aggressive lawyer career they were a handful of european banks who are believed to be at the bargaining table. those others that have yet to settle did not want to comment on this latest development, even as they negotiate just how much they will pay. the british bank, according to barclaysnment, repeatedly deceived investors about the qualities of the securities they sold between 2005-2007, more than half of which and the defaulting. they already tried to prepare for summary like this. looking ahead, we are going to be live in the world's most polluted city. we are not talking about beijing or anywhere in china. up next, a real estate mogul gives us his prediction for the trump presidency after having
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met the president
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."tty: this is "daybreak asia yvonne: a quick check of the latest is this flash headlines. an australian company says they are rejecting a takeover bid. they say the offer is an adequate, contains inadequate assumptions, and is not superior to a former bid. the consortium offered more per share. iran air has signed an order for 100 airbus planes. ehran doesn't expect to pay more than $10 billion. deliveries are set to begin
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early next year. confirmation comes about a year after it was first announced, following lifting of sanctions against iran. mcdonald's may be planning to sell its outlets in hong kong and china. says the deal may be worth as much as $2 billion. announcement could come in the early year. they are also considering selling a portion of the stake in mcdonald's japan. betty: our next guest is someone familiar to us on bloomberg tv. portfolio ofas a over 6 million square feet. he recently met with donald trump to discuss the president-elect's business plan. joining us from sunny miami. first question, what did you and
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donald trump talk about? about of varying issues. we focused on what his plans were in terms of moving the economy forward. we spent a lot of time talking about ideas, how to provide better opportunities for women and african american entrepreneurs to make the system a bit more fair. we had a good conversation. i was actually very pleased with how open he was. he was a great listener. good conversation. of our viewers may not know this, but you and i have talked. a year ago, you are saying, watch donald trump. don't count him out. here we are with him having won the election. you were spot on early on.
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did you talk about position for you? don: donald and i know each other. the president-elect knows i have run a large development company around the u.s. i am focused on my business. not to say, if i were going to work in an administration, i would not be resistant. i would be honored to do it but it is not something that would work for me right now. i think he would be happy to have me if i were interested in the circumstance presented itself. i like being a business person. if i ever go into work for anyone, it will probably be the citizens of new york city. betty: you have been in the news -- either way, have you made a decision yet? on vacation.t i am i'm working on vacation. giving a lot of thought to it. betty: i will circle back with
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you on that after the new year. speaking of working on your business and your peers in business, we have a lot of titans. the various people who have excepted positions in a trumpet administration. i am curious to hear from you, what you make of the cap net position so far and the people he has put in their -- cabinet positions so far and the people he has put in there. ross is an amazing person. he has given me advice in terms of how to raise capital. been out there, he is a great business person. i think he will be a tremendous addition to the commerce department to have him. selection of his
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team members for the economy, the economic areas of our country, treasury, commerce, council of economic advisers and other positions are all very solid. he is bringing in people with real business experience. current business experience. one of the greatest investors of our time, i think are all very good things. will help move our economy forward. that is why this stock market positively over the past months since he has been elected president. speaking of carl icahn, we know he has just been named special advisor on regulatory issues. we interviewed him earlier and i want to play for you what he said about regulations in business. what i think is very sustainable, is show business we
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are getting rid of a lot of the regulations that are strange ling you. going to getre cash and capital invested is to get a rid of these, i consider to be, crazy regulations. where he stands. what would you want him to get rid of? don: i think the banking regulations should be reformed immediately. there are americans who want to buy a home cannot afford to buy a home, only because of the down payment burden. the significant reduction of loan-to-value and loan to cost regulators have imposed. my business. lenders are so constrained in terms of financing job creating real estate projects.
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i think those areas real estate to be reformed right away. i think you would see a significant jolt to the economy. more jobs generated. ownership, at home right now in most major cities, it is more expensive to rent them to own. betty: that is becoming more true in new york. you mentioned earlier about the cabinet and how it looks and how it is good for the economy. you are with the congressional black caucus. you are a leader in the african-american community and you have also championed women's rights. is his makeup right now diverse enough? : it is not necessarily what the race is of someone holding the office. just because someone is african-american doesn't necessarily they are going to engage in policies that will remote equal access. one would make that assumption but that is not always the case.
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i think it is more important to look at the commitment that starts at the top. donald trump made it clear to me when i met with him on monday he was fully committed to using business and entrepreneurship as a way to increase access to economic opportunities for african-americans. that is a very strong and powerful statement and one i believe in. i believe the pathway to a greater life is equal access to economic opportunity and educational opportunity and educational choice. i look at where he is and what he has said. the fact that throughout the campaign, he made it a point to talk about empowering african american entrepreneurs. providing jobs. i look at him there. ben carson is one appointment. i think ben carson is an who has ag person
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high degree of character. i think he has the capacity to do a good job at hud. looking at to look at quarter's of who was brought in. i would like to see more diversity but the president-elect is not done yet. betty: appreciate your time, don. don peebles. we have breaking news regarding the italian bank, the government approving the decree. we are now hearing from monte paschi saying they will ask for state aid. this really means is, it is e step closer toe nationalization. after the private funding didn't generate too much demand.
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we will continue to watch that one out of italy. more to come here. copper miner freeport hits paydirt. this is bloomberg. ♪
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betty: indonesia will continue to allow mining companies to unprocessed ore. let's get details from our southeast asia correspondent. is this a turnaround? haslinda: no turnaround. the moratorium stays in place. indonesia is allowing miners
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to keep exporting concentrate. approval from the very top, the top man, the president no less. great development of companies like freeport, the largest publicly traded copper miner, in indonesia for a long time. it owns a huge mine. earlier this month, there was a resolution to the moratorium. it would have to cut back operations. in recent years, indonesia has been up in arms and expressed concern over the effects of mining on the environment. the issue of security arrangements. that has caused a lot of fiction rs in theine indonesian government. yvonne: up next, news of a golden listing and hong kong. we have more on that.
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this is bloomberg. ♪
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yvonne: it is 8:30 in singapore. half an hour from the opening of trading in the lion city. also expecting inflation numbers this afternoon. betty: you are watching "daybreak asia." let's get to the first word news. haslinda: the u.s. justice allegedly's suing for deceiving investors. the lawsuit is rare for the banks, which typically negotiate
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a settlement rather than risk a trial. the justice department alleges deceivedatedly investors. extended trade after finding a bug. oftenitch overstated how towas used and is the latest shake confidence. ed clients who placed ads. constitutional court has held its first hearing into the legality of the impeachment of the president. the judges have up to six months to decide whether park should step down or be i
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reinstated. saudi arabia has presented the most detailed budget in its history. cutgovernment says it spending by 16% this year, narrowing the shortfall by more than expected. the kingdom expects revenue to inp more than 46% from oil 2016. hours a day,4 powered by journalists in 120 countries. new zealand, closed for the day already. how are things looking? david: it has had a mini run. , it is going to be shut for the next few days. 0.4%.
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a shortened session in australia. let's look at how the breakdown is at the moment. on this side. keeping things relatively afloat. is a fairlyee, it broad-based selloff. some of the big names. 2%, 2.5% losses. rket i want to focus on, south korea. there we go. consumer goods, you have the big construction names and financials on the way down. the currency has been very much in focus. it has crossed the psychological level, the first time since sincesince 1201 bank --
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march. won. you are so going to be following the hong kong markets closer than usual. david: a few things i want to note. let me bring up my chart if i can find that. hang seng. entered a correction yesterday. juste still more or less underwater for the year. 24,000, about a 10% decline. that is one reason to watch it very closely. the other reason i am watching this, let me break this down for you. hang seng, my pie chart. one group of stocks i am watching closely will be the brokerages. there was a report that was out
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after the markets closed yesterday. a local report out of the securities journal, the regulators in china are looking to perhaps tighten their grip or increase their supervision of these brokerages. we will be group following very closely later on. these guys right here. down 0.7%. betty: certainly focused on that. david ingles. departmentmmerce released a flurry of numbers. the question is, what do they mean for monetary policy makers and for the economy as we head into next year? numbers coming out on the gdp. tell us more. we saw a very solid gdp number today. significantly above what analysts were expecting.
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for central bankers, that is good news. the sunnier side is businesses started spending. we saw a pickup in corporate investment which is one part of puzzle that has not fallen into place. there was a negative side to this. consumer spending did not match expectations. if anything, that is what took the shine off. betty: what is this mean? nna: the fed has a lot of uncertainty because there is a lot of data coming between now and their january meeting. there is also going to be a ton of fiscal uncertainty. what the fed can take home's growth is basically matching expectations. they were looking for growth in the 2% range.
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as long as the first quarter see growthe should match expectations. if you are the federal reserve, the data is saying we are basically on track for where we thought we would be at the end of 2016. yvonne: this all calms against the backdrop of a tightening fed. how does this play into the picture for growth and spending? na: we saw the first increase and only the second in a decade. we saw financial market repricing. that came on the heels of a solid job in the wake of the november 8 presidential election. if your home buyer looking to take out a mortgage, it is going
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to cost you a little more than in october. that could be a slight downside. the other thing that is going to be important for the fed is we have seen a strong run-up in the dollar. the bloomberg dollar index. it has moved up sharply since the fed increase. of bad news for janet yellen and her colleagues. you are going to see slower growth and potentially lower inflation. yvonne: our economics reporter joining us live. thank you. ininitial public offering hong kong, but it may not be the goldman that comes to mind. goldman safe. electrical an subcontractor. they have decided to go for an ipo in hong kong and have
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changed their name. the name sounds similar to goldman sachs both in english and chinese. why did they change their name? tell us more about the company. >> it is hard to say for sure what is in the mind to the management. what we do know is an attractive name is really important for ipos in hong kong. every deal has to have a portion set aside for retail investors, a lot of whom are going to make a quick buck. decisions based on uckiness ofd the looking u the numbers. the one they have chosen means prestige and integrity. betty: why it is important for
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them, other than it sounds great? investors choose what to buy just based on the name. perhaps the industry is not as exciting. they wanted to find something that would attract people. isir basic is this installing wiring for hospitals. that is a little scary. you are picking a stock just because they have a great name. have other companies do this before? have far as i know, there not been any other ideal candidates choosing the name goldman but it is a popular target. there is a company across the border that does financial leasing and call themselves goldman sachs financial leasing.
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they have no association with the investment bank. ahead.much more we hear from another investment strategist who says tech stocks will have a big reality check next year. this is bloomberg. ♪
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."is is "daybreak asia asi betty: a quick check of the headlines. huber says they are taking self driving cars to arizona after pulling them from california. cars wills a taunus be rolled out in arizona in the next few weeks. it's burke is the only city
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where the service currently operates. -- pittsburgh is the only city where the service currently operates. details willcial be released later. the nikkei news since the deal could be worth about $600 million. betty: nintendo hoping to work players back to pokémon go by bringing it to the apple watch. perform ineople to game activities but also allows capturing monsters. enthusiasm has died down cents the summer release but they have another hit with super mario. years truly included. let's check back in with the markets.
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peter, good to see you. we saw how thin volumes have been. shouldn't be this then this time of year. what do you make of it? is it a signal of a meaningful pullback? t has been an event full-year pre-brexit caused a lot of role until it he. we then had the u.s. election and markets on edge all year, waiting for the that a reserve. they did not move until december. many traders are standing back, looking to 2017, and aggravation. seeing -- in on duration. innaguration. so much has happened this year. it is not surprising to see traders standing back and taking
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a breather. yvonne: you mentioned the run in commodities as well. commodities are still looking pretty good. i wanted to get your take on what this means for stocks. we do have this kind of relationship. quite a bit of divergence of late. is this painting for more pain ahead in 2017? >> it depends which stocks and which induces. sitting and australia, we cannot wait for commodity prices to pop out iceause we have an ind that is exposed. i think energy converges the most. when energy prices are rising, bond yields are also rising.
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we would love for energy and commodity prices to continue rising. particularly in this country. particularly the government in australia. yvonne: you mentioned about the runs you have seen. you have reached those 17 month highs. japan, overbought signals for much of the market. is it now time to start de-risking question mark how are you hedging before inauguration day? asian markets have a lagged of the rally in the u.s. the u.s. equity markets are at historically high levels. it has been a beautiful run since 2012. the asian markets have been railing. japan is an exception because of
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the huge impact that monetary policy is having. if you look at this market and australia, for example, it is still well below where it was pre-crisis thousand 7-2008. we are playing catch-up. continue to bell years where emerging markets and asian exposed equities play catch-up. you might have more consolidation in the u.s. europe is a bit of a funny one. there are balance sheet risks for equities. i don't know if that has been priced through. maybe we will see recapitalization in 2017 and they can start playing catch-up in the second half of 2017. you mentioned about the emerging markets. i thought it was interesting, given how strong the dollar has
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been. which would impact emerging markets. there is a strong dollar and a stronger dollar which could be an issue. when does it start to hurt? thet starts to hurt when currency goes against you, the bond market goes against you. the cost of debt rises. as an equity, a market of equities, you cannot then grow your earnings to offset that. i think businesses that are really weak are going to struggle. i think 2017 will be a time of realization. the gaps between the so-called growth stocks that do not earn money and the equities that have been neglected. resource equities, for example, that have been completely discarded. i think currency will play an
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impact. at the end of the day, if the earnings are not there, all bets are off. you've got to follow up some of that fluff with substance. i want to get back to the oil markets. the bullies performance we have seen in oil prices. i want to pull up a chart which shows the relative performance of wti crude. see, finally after two been years of underperformance, it is actually going to outperform other commodities this year. how does that change the game next year for oil and exposure to energy? >> a lot of those large energy exporters have been repricing since september. at a lot ofa look
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the malaysian exposures listed on the market, even if you look at the u.s., major oil producers and energy producers, there has been a repricing. caps have notll benefited from that. where energy prices are at the moment, they basically provide enough of a buffer for the large names to do well, but not enough for the small and emerging names to ride off the back of that. for theplaying well large equities, the large producers. they can dominate, drive out competition in the industry and help insulate earnings. what i will look for is the wa y they invest. are they bunkering down and waiting for more stability? to me, that will be a sign of where the wheel market is likely to go, when they invest. betty: thank you so much.
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up next, the smog returning with a vengeance to shanghai. however, the situation is far worse elsewhere. we are going to be live in mongolia. this is bloomberg. ♪
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."tty: this is "daybreak asia quick look ator a
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what is coming up. what are you watching? rishaad: this italian banking debacle unfolding before our eyes. it looks like the state will step in and support them. the oldest bank in the world. with the government plans to do about it and what it means for the rest of the banking industry and italy. looking at the u.s. dollar, the rally continues. also looking at the oil market. talking to us about how he thinks opec will adhere to the output quotas. also, we are going to be with another person. to talk again, more broadly, about commodities. believes gold, though it has been a dog in 2016, could turn
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around in 2017. that is what is coming up. thank you so much. subbing else here we have been talking about. china's pollution problem to rate talking about that all week. it has returned in shanghai, the 10. consulate's reading, times higher than the internationally accepted safe levels. authorities have warned people to stay at home. china facing an week of choking smog. pollution can be bad but things are worse across the border in mongolia. smog five times worse than beijing at the height okings chugging haze -- ch haze. tell us more about this problem.
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it is tracked in 11 different locations. the pollution level is for 61 -- 461 micrograms. higher than the level where beijing canceled flights. six levels were moderate and one is clear. the main problem is where people have to burn coal for heat. yvonne: wow, looking pretty
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scary out there. joining us from: bu the mongolian capital. before we wrap up, sign of the continuing weakness in the yuan. aluing china's currency on par with the dollar. the hong kong dollar. is move shows how the yuan less attractive to held. three years ago, it equaled about 1.3 hong kong dollars. i think we should start splurging on the slushees. bloomberg markets, coming up. ♪
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rishaad: it is a :00 a.m. in singapore. mid day in sydney. i am rishaad from bloomberg's asian headquarters in hong kong. his is bloomberg markets: asia. is bloomberg markets: asia. ♪ rishaad: italy uproots a bailout for banks struggling. but it might be too little too late. raising the stakes. australia's betting drama.


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