tv First Up With Angie Lau Bloomberg May 18, 2014 7:00pm-9:01pm EDT
to the celebrations, the work begins in earnest. the prime minister starts to fill those governments. the name cracks down on anti-china protests. chinese nationals leave him thousands. a special report on how the survivors are struggling to rebuild their lives. welcome. in for angiert lau. thank you for joining us this monday.
newa is repairing for a government after would have the biggest election results in decades. on abjp for our own when i landslide victory. we report on the challenges ahead. good morning. there is already a lot of buzz happening. for starters, nobody thought they would get the kind of majority. they were expecting it would not come to pass. -- even though they were expecting it would come to pass. along with the west, a significant majority is not something that most people were expecting. completelys been launched out in 2014. they have not even managed to have enough to be leaders. that will be an interesting game.
it will be the next prime minister of the country. he conducted a mega roadshow in the capital of the city. he had attractions with the media as well as people of the country. watchay really want to out for now is the parliamentary board meeting. decide thee this to course of action. in a few days, we both have this great when it will take place. welcomingmarkets are the resounding victory from bank stops to the repeat. investors hold of him -- handed him a total seal of approval. john dawson joins us with the details. it has been on fire. >> it really has. is goingthe reaction through the markets. the rupee is a two-day performance, 1% performance.
prior tonificantly this forward. pointu have this five five percent difference. this isdifference in ahead of today's trade in about four hours time for now. really in the leave their. banking up six percent. all the bigs industrials there. about 3.5%. the bse capital goods index is 32 months high. it shows you it is away from the defensive lays. they goes up to the really strong economic stories which are these companies. that is where they make the most of that. a 60 month charge of 15.5%. this also shows later met again as now.
it is really one direction and one clear-cut trend. ticketn an economic throughout the economy. that is why he has a resounding but three. it shows great evidence of success under his leadership. the economic recovery is what he can do. whether he can add one state is a big challenge. stocks, all the big ones, are all seen gains. mcquarrie raising the census target. deutsche bank did exactly the same. upgrade it. have not mentioned that that you may see that upgraded. overall, both. as a being named candidate, he is seeing the indian stock market rise 37%
billion ines to 371 the relation. >> a lot of investors wondering if this will last. many are surprised by the prime minister. who is the favorite? >> no names yet. we also have the former r.b.i governor. lost this. he deserves a seat in the upper house of parliament. he is the favorite. do watch out for him. important post when you're on the ticket for economic recovery. >> absolutely. they have a lot of recovery and challenges ahead. >> yes. >> thank you for that. you can get more on india and all today's top story were ever you are with the bloomberg app. you can download it from the itunes app store and watches life.
let's get you a check to the markets. we have trading in new zealand today. this is what we're seeing out of the gate. it declined about a fit of 1%. you're seeing the kiwi dollar advancing. 86.37. you have -- .8637. we're cutting down to the open of japan, korea and australia. this hour we are expecting machine orders of to japan. the latest numbers expected to show a gain following a decline. to gains at the open. let's look at where the japanese yen is opening. modestly higher. tour other top story, china is evacuating thousands of citizens from vietnam after last week's deadly protests. agents have canceled towards.
good morning to you. thank you for joining us. will these now subside? i think this'll subside. they showed that they were able to control these things with advance warning. they were taken by surprise last week. i do not think they will be taken by surprise again. the problem is this will rig is in disputed waters in china says they do not plan to remove it so the middle of august. that will be a continuing point of tension in muscles as a result of my liquid. >-- diplomatically. >> do you think china can do it themselves to politically? -- diplomatically? >> this is the problem. china has always preferred to neighbors
bilaterally. in nose in a room with two of them it will hold the ponderings of power. this can be resolved diplomatically but it will take work. you have seen individual statements by the secretary-general, by the indonesian foreign minister that they are not happy about this. they need to take a more unified stand if this will get done. >> what do you think it would take to force china to make china remove this drilling rig that is the source of so much controversy? why one thinks china but the rig there to begin with. it really was just about this particular patch of land, it is going to be very hard. forceentioned, the only that could push back against them would be a fully unified on the on -- asian.
if you think this is not about vietnam at all, then the question is what can the u.s. do it ise clear where willing to defend in asia and how far it is willing to go to based order that china seems to be violating. tolet's turn our attention another issue front and center. this is the situation in ukraine. vladimir putin in china this china hasou think been emboldened by his success in the crimea? >> that is what a lot of people are saying. that is partly what may have encouraged china to take this step. not saw that the west has taken any great action or reaction -- in reaction to putin's moves in the ukraine. i doubt that myself. i think the two countries are very different. tona has been very difficult
stay in on the sidelines. dispute has not come out in support of russia. there'll be plenty of handshakes and joint able exercises. there will be a lot to talk about the great unity between these two countries. china understands that the future does not lie in a pure partnership with russia. >> a lot to discuss this week. we will certainly be following the tensions and the south china sea and the russians president to china. thank you for joining us live from singapore. despite the tensions in the south china sea and concerns of china slowing growth, emerging market stocks posted a third game last week posted primarily by indian shares, rising to a record on the edge of modi's win. in friday's session, surging over 6% early in that days straight. check out the markets in dubai over the weekend. shares in the middle is not
faring as well. dubai's benchmark fell for a third straight day sunday. shares have rallied after the united arab emirates upgraded to emerging markets that is. investors can see -- appear concerned that it was overdone. it is time for a check on some of the other stories making headlines this monday. are blustering the financing ahead of and ecb area. deutsche bank plans to raise $11 billion in fresh capital. almost a quarter will come from selling a state to the qatari riyal family. for thee raised this second time in the hopes that more cash will assuage concerns about the takeover. for 117 billion dollars in the biggest ever acquisition of a geek a company. pfizer says this is the final offer and they have until 5:00 p.m. time date. a tv merger in the u.s.. they have agreed to acquire directv for close to $50
billion. it has been approved by both companies and is expected to close the next month or so. they're taking on rivals and time warner. >> that is the headlines. i am mia saini. >> tilde come on the program, after 30 years, an end to politics in india. our next guest is not changing his outlook on the country just yet. we'll ask him why when "worst close -- "first up" continues. ♪
for russia to supply natural gas here this has waited in to moscow. football and wine come together on wednesday. selling ferguson is this from his personal collection. it is the worst that may raise $5 million. many will have this from the legendary career. midterml hold the briefing. it tumbled after these price or cast: none now -- another annual lot. himbriefing will be had by is under increasing pressure to turn this around. time championnine this. this is happening in lisbon is the first time they have.
and the i know. let's get more on the week ahead. he is with capital economic. or.s live from single thank you for coming in. there's so much to discuss. given to start with india this very important election. he will take power. expectation on the key priorities. what did they need to get to work on now. is trying to fix all the bottlenecks. that has been a real factor in the growth slowed down. this is one thing they can tackle. of government has a lot majority in the lower half of
parliament which could be a bit of a game changer. it does not have a majority in the upper house. thel probably need to push executive orders. we know the government does not have a leader road ahead of it. this is dispersed in india. there are many voices that need to be heard. how difficult will it be for him fort and these key reforms business and foreign companies and the structure of the economy? >> it is not going to be easy. the majority is being held. doing a chance of unreasonably well. sorry. we have seen paralysis among
india's leaders. i want to turn our attention to china. it is a busy week in china. over the weekend we have the eight is property price data and the housing market. what is your read on this? we have home prices flowing in china. this seems to be spreading. property curves are being relaxed in some cities. what does this tell us? that chinaproblem has is that has been so much oversupply in recent years. 10 million new properties developed last year up from 6 million in 2006. a really sharp increase. i think some commentators have ofn saying the rate urbanization can be a jive or a positive demand. the rate has already slowed quite sharply. it is likelyecade
to only slow further. there is going to be a problem with supply overhang. >> even if the government does relax some restrictions it is not going to save it. you can reduce mortgage rates. the more likely thing is that it will slow. these are things that can do, inject stimulus. they are finding other ways of boosting growth. boosting private consumption. it is a difficult balance. >> i have heard various scenarios. landing?edict the hard there are two muslims and -- doom and gloom scenarios out there. this is not the primary forecast.
it was a real concern and that's a are. it has been a real problem. because this control so much of the banking sector, they can just loosen the restrictions. it means that they can probably avoid a hard landing. it keeps pumping money into the tour. >> we are out of time. first that today. this is daniel martin. he is an asian economist at capital economics life from singapore. let's check in on some other stories. china southern has signed a deal to buy new planes from airbus. they have a list of value of $7.3 billion. the carrier wants 80. the demand for travel continues to grow. in 2016.s were set for 737 from a discount
carrier last week. japan is said to be looking to boost capacity at the two airports in tokyo. they said the government may build more runways to increase air traffic over the next 15 years. the report also says the government may ease restrictions over residential areas. coming up next, we are back in the philip to find out how you are rebuilding their lives after the typhoon. we will have a special report after the rate. ♪
>> welcome back. it's month since the typhoon it dedicated parts of the philippines. back to sees been how things are now. ingles sent us a special report. haiyantyphoon took almost every the nickel. >> my wishes to earn a living. we cannot rely on aid anymore. we need to start rebuilding our lives. >> she is just one of the thousands relied on the fishing
industry, one of the main sources of income in the areas devastated by the storm. the yuan estimates that just in the provinces, got 25,000 fishing boats were destroyed. they forecast it will take at least one other year to bring things back to where they were before haiyan. >> it is not only the boats at the motors. it is about the nets. also the supply chain around that and where they bring the fish in, what they do about the markets. what they do about refrigeration. >> the sheer extent of the damage was such that the response from the private sector or has been just as credit will of the government and the ngos. ella, use their resources to jump start retail trade in the grounds. likelihood or the 500 here. we gave them phones. we gave them capital. including signage and rebuilding is about $300 for one sort like this.
-- for one store like this. >> within this month i was able to sell $100 worth of things. now i can use him of that money to buy more merchandise to sell. overall, the country's finance ministry estimate that nongovernment aid has so far topped $3 billion. >> we're working closely with the biker financial organization that are present in the region. we are using the landmark of the philippines to do this. this is something we hope to launch within the next month or so. >> in many cases here, it is not enough to simply give them fish or teach them how to fish. giving them the tools to rebuild their lives. bloomberg. will have reports all week from david on his remarkable trip to the philippines and the
recovery that continues there. checking some other stories making headlines, north korea has offered a rare public apology after the collapse of an apartment building under construction in pyongyang. state media showed officials with grieving relatives at the site. the number of victims has not been released but it was described as "serious you." it may have house more than 90 families. three people have been charged with negligent in connection with a mine explosion in southern turkey. survivors claim the mining company ignored safety concerns and that government inspections have been superficial. it can lead to sentences of up to 15 years. we will be back in two minutes. ♪
slow. connecting the unconnected. they launch their own tablet computer. welcome to this half hour of "first up." thank you for joining us. big has won a resounding rate in the election without the need to form a coalition. john dawson joins me here with the breakdown. >> high inflation is slowing. this is what he had under the leadership. the country turns a bit. the r.b.i is about to raise their rates. this is the plan going forward. otes [indiscernible] it is the first of the party's
majority since 84. held back by coalitions. 432 romans received. 272 needed to form a government. the concern here is the upper of 245here they have 61 seats in the house and need the upper house to clear the laws of constitution and investments. that is a good blog going forward. the lower house a strong, upper house is weak her. the rupee is 16%. all the stock markets are seeing gains. construction stocks are driving forward. analysts [indiscernible] they are forecast for the
main benchmarks. movies could see an increase in the rates. watch out for all of these of thesens -- all reactions. we can see what they do react to. these are the ones you can see on friday. a bank of 5%. the bank of india up 5.9%. all the stocks are seeing gains. also attempts in gains today. hianwhile, this is in new del to discuss things with his party. they are getting close with the adulation, market response. a really strong support. deliver, has to clearly. there is a lot of talk in the markets over his choice for
finance minister. who is it? lost his seat in punjab. he has got a seat in the upper house of parliament. eligible to have a cabinet post. jaitley is the favorite. 61 years old. [indiscernible] a bit of a setback. not in a too devoid him of the opportunity. >> we will see how they respond today. thank you for that. of thes check in on some other markets. you can get more on the indian election on all today's top stories on our website bloomberg.com. with no let up in china's property slow down days after the government asked lenders to
accelerate mortgages. how beijing may manage of the housing cool down. it appears to really be across the board. >> beijing has spent the past five years trying to prevent prices by increasing too much. now they are sensing the labor almost to the negative. it could contribute to a further slowdown of the chinese economy. you saw home prices rise in april and 40 or out of the 37. by comparison, if you look at the month of march, it was six cities. taking a look at the two big cities. prices in the beijing rose compared to the large in shanghai. they were falling from a month earlier. we all than -- we often talk about this on the program. you see developers coming in. they're offering this. they want to lower more homebuyers to market.
you are seeing less construction. there's no incentive to build new contracts. this is being extended. how they wantg on to put more pressure on lenders to break celebrate these mortgages. it goes back to creating more demand. connected, specifically if you look at how the government is reacting. >> it is counterintuitive. we see so much of a slowdown. when it comes to the housing are trying to encourage lending. it is a vicious cycle. people think the markets are going to crash. is how you have to look
at these three constituents. among theevelopers consumers are doing. it is a sense of what they are doing it. property market is on a very dangerous bring. a chief economist says this. the only effective measure to ease this is to accelerate credit growth. he goes on to say the government shows the credit easing. clearly they know which to never poll. it matters to which extent they are going to pull it. when are they going to pull it? that is pretty much how you summarize what you expect to see from the chinese government. mia saini, thank you for that. we will be getting more with our guests in the next block at about five minutes time. some stories making headlines. the ceo of credit suisse may step down as the company tries
to solve a criminal investigation over tax evasion. plead guiltyuld and paid $2.5 billion in fines as part of the settle agreement. it could come as early as today. are enjoying their longest rally in seven years. it has surged for eight straight as as president putin repairs to meet with china this week. they have sanctions over ukraine. gazprom says it will allow the delivery as much as 38 million cubic liters of gas by the end. they are recalling more than 150,000 cars in china. they are both from january to
september 2 thousand 11. inspectors say the recalls are due to faulty part that maybe to fuel leaks. has entered the tablet market with a range of homegrown devices. they're not exactly tracking samson or apple. they will allow some in the reclusive state to become a little more connect did. what north korea is not the kind of country to let -- let something like a lack of internet access to get in the way of a budding mobile vice industry. four companies are now available in north korea. they were on display at the international trade fair. we are selling with a lot of applications including a lot of literary and artistic works which are widely read by our own. also, the textbook and reference books which help people study. recently among tablets, the tablet with tv function is the
most popular. >> the smallest tablet includes a retro antenna offering improved recession for state run tv. restricted.y users of these devices can only connect to north korea's own local intranet. officen the homegrown software which is strange as a much of microsoft office. hardwaree four import from china and taiwan and modify it. components in north korea. we areeducational developing and producing has an operating system adapted to our own style and useful application. more than 400s multimedia resources including textbooks and reference books for primary and middle school and has the function of dictionary search, handling multimedia, and handling
documents. it is just as capable as a computer. >> the devices have been surprisingly well reviewed. of the line top model are a bargain but only for those not earning the average north korean wage. on theng up next program, another side of china's slowdown is pessimistic about the property market and expects the downturn to continue. we will hear from credit suisse after a short break. ♪
>> welcome back to the program. top stories out of china. the government has ordered a new move to rein in banking. the interbank market has more than tripled over the past five years as a way of sidestepping government lending restrictions and capital requirements. a slowdown in china's new home prices is continuing to spread. prices climbed in 44 of the 70 cities tracked by the government. offer easing. it calls on the biggest lenders to be the process of granting mortgages. my next guest is rated on some of the biggest names on china's power. welcome to the program. the price slowdown.
>> i think this only started because the price just started. early to focus this. if you compared to the previous ones right now it has the market. it is still much higher. i think there is room for the downside. home sales fell 18% that month from march according to statistics reported last week. a seems to me that this is
bit of a vicious cycle. you have confidence diminishing in terms of home buyers prices are falling. fix the the government situation? >> this continues down. the warning and the price go down at the same time. the level right now for the price in the volume are much higher. say if the government looks at the data, they would not be too worried at the moment. especially as they try to stimulate this. the investment in real estate. they have also increase the investment in the housing construction. >> we know the property market is a primate for the chinese to invest. that is were he can make big returns. is a counterintuitive that the
government seems to be encouraging some lenders to dole out more loans at a time when we hear about credit growth being reined in china? how do we make sense of this? that is not the demand to loosen it. the government has made it fair that for the first time homebuyers, if they fit the criteria, they should be allowed to take a mortgage. that is for more like the basic requirements for the mortgage loans. allowed the banks to pull out more credit. they are very different. talk about stocks now. you are top rated on the developers. you write that property stocks start to underperform significantly when higher -- when housing prices become more whites read. who is most at risk in terms of developers? haver those stocks that
pretty a landa bank in remote areas, they look more vulnerable in the big old cities. it is more like two different groups. >> which means would you be favoring, would you be recommending investors to buy it once it appears they think and whether it? >> sure. we're looking at two names specifically that potentially could do better relative to the rest. one is [inaudible] it is a stock that usually in the past down cycles better. there is another stock that is a little bit different in the sense that they are not really in the housing market.
>> as you go forward, how does this play out? will homebuyers confidence be going? i think it gets worse before it gets better. >> definitely. that is what is happening or any structural reform. china is going on with structural reform. diversityl have the or that for sure. >> is there a diversions between the main cities, beijing, shanghai, shenzhen, and second and third tier cities? we cannot group everything in the same basket, can we? >> there is a widening gap dust betweens in cities. i think it is much more complicated. now beijing is doing ok.
even for some of the later news right now. there has been this prices. it has been falling for many projects. >> where are you most optimistic? any surprises as you challenge -- as you travel? any place that is performing to the upside? of these are doing much better than the others. i will say that this is what is happening right now. if you look at the dynamics, the homebuyer sentiment continue to reclaim them. we are out of time was a breaking news japan. we appreciate you coming in and helping make sense of the latest price that's out of china.
we will be watching it closely as the market gets underway. yankee for your time. you breaking news out of japan. rising 19.1% in march from the previous month. but this in context. 5.8%mists were expecting a increase. quite a significant beat on that number. they were 16.1% compared to estimates of 4.3% gain. we will be looking ahead to the japan open in just a few minutes to get some perspective on what this all means. singapore traded futures are pointing firmly to a higher open today. the nikkei to dubai five finished the session friday lower to 1.4%. the yen right now slightly weaker. 55 levelsding at 101 against the u.s.- dollars. u.s..55 levels against the dollar. coming up next, it is the first
>> welcome to the stock exchange. we are taking a look ahead to the open in japan, south korea, and australia. our reporters are here to tell us which stocks we are keeping an ion. >> there's usually two of us. i'm cheating. i'm watching three stocks. they are both supermarket chains now. he is said to the listing both of these. they are going to put them in a cold in company. it will be formed by the spring of 2015. it will then the list is essentially by having the three
supermarkets under one umbrella. they will be able to leverage skills. they're going to hold 70%. these three stocks are expected to move. this fell 30%. it closed five percent. it impacts the cigarettes. this is the richest company. it has significantly outperformed of a .5% this year. the months taken in before this increase. down 3.5%. there are currently 20 buys. eva dimensions where there.
it is underway. more buys. it is a egg drop. >> we'll be watching this. interesting tidbits. all right. we will be checking the stocks in about an hour's time. you got three today. figured [indiscernible] >> thank you for doing it. we will see you in about an hour. our reporters highlight the stocks based on new events. before we go this hour, the box office this weekend. it is a take on the 1950's japanese classic here at a rate in more than $93 million. godzilla mark the second
>> a standoff at sea as china and vietnam's are for maritime dominance. we have a special report. doing gods work. india's new prime minister sets about reviving his country's fortune. why teaching a man to fish sometimes isn't enough. how the survivors of the typhoon are struggling to rebuild the lives. will come to this monday edition of "first up" coming to live from bloomberg's asia headquarters in hong kong. i'm zeb eckert in for angie lau.
let's begin with the escalating tensions between china and vietnam. beijing has sent ships to evacuate its citizens following a violent protests sparked by an oil rig in waters claimed by hanoi. foreign businesses were attacked into -- and to chinese people died. vietnam has deployed to kurt enforces to maintain order and then protests in hanoi and ho chi minh city over the weekend. however, there was a small demonstration outside the chinese embassy. chinese travel agencies have suspended tours to vietnam. bloomberg was right there when rival ships clash at see. our hanoi bureau chief brings us his first-hand account of the rising tension. chinese antinomies ships have been locked in a tense cat and mouse chase about 149 miles off vietnam's coach since china hauled in this billion dollar explanation rig earlier this month. both countries claim tell it -- territorial rights to this area.
this clash occurred last week as a vietnamese boat got close to the rig. it did amuse coast guard said their boat was idle in the water when the chinese vessel rammed it. there was minimal damage, but nobody aboard was hurt. chinese government says its boats have also been rammed while legally protecting the rig's operations. a radar screen shows there are about 60 boats in the area. that is more than double the number of vietnamese coast guard ships and fisheries surveillance boats. this one are daily occurrences as both sides blast horns and blair recordings ordering the other side to lease. vietnamese vessel is about seven nautical miles from china's exploration rig, which you can see in the background behind the. chinese ships have created three perimeter rigs -- rings around
the rig. what happens, chinese vessels give chase, and this is exactly what has happened behind us today. while the two governments are locked in a diplomatic standoff, the turf battle at sea is likely to continue. remarkable video from our hanoi bureau chief. let's get more on this. our correspondent is in singapore. it will these tensions subside? >> i think on land, they will. it you have already seen yesterday that the vietnamese government was able to bring planned protests to heal, and i think they've they understand that is not in their interest anymore, to allow these things to go on. i don't think you'll see too much more of that. you've as you just saw, got all of these ships out there, and vietnam cannot really afford to back off now. the chinese say they aren't leaving until the middle of august. you've got several weeks if not
months of this ahead still. question is, can vietnam and china resolve this on their own? through bilateral talks, through diplomatic relations, come to an agreement to end the standoff? problem with bilateral talks, this is what china always prefers to do with its neighbors, is that come in a room with the two of them, the chinese hold all the cards. you have seen so far that there have been high-level meetings between chinese and vietnamese officials that had in a statement of their positions and have led nowhere. the only way that vietnam is going to be able to bring a diplomatic -- diplomatic pressure on the chinese if asia can unite behind them, which is something you haven't seen up until now. the non-needs to convince the rest of the group that this is -- vietnam needs to convince the rest of the group that this is in their collective interest. >> what would it mean for china
to remove this rig? it is hard to believe one oil rig could cause such widespread protests, but that is what we've seen. disputedis in the waters off vietnam's coast. what would it take for china to take it away? lot more pressure than vietnam is going to be able to bring realistically. i think if you believe the chinese really care about the oil that is supposedly down there, and there are conflicting reports about how much oil there is in that region, if it was about that, perhaps you could have some sort of talk and come to some sort of agreement on joint development of resources and so on. it also seems clear that the chinese are doing this to send a message to the united states, about the united states' prese nce in that part of the world. if you look at it that way, the chinese have no interest at all in backing down. the americans, because vietnam is now -- not a treaty ally,
have very few options other than rhetoric, which is what they've been using so far. >> thank you for joining us. turning out to india. the incoming leader says he is doing gods work and represents a break from the past. modi celebrated his election victory. he will be number naked as prime minister later this week. his party's overwhelming winner boosted stocks as well as the rupee. jp leader is seen as a pro-business leader after his time in gujarat, and sources say he has selected the man he wants as finance minister. john dawson joins us with details. >> the favorite is a former trade minister, and the interesting thing is, he actually lost his seat in the lower house. he does not have a seat in the lower house, but he is still eligible because he does have a seat in the upper house, which the bjp didn't do well in. she is the favorite.
also, the former r.b.i governor is a candidate. experience in finance. has been the reaction in the financial markets, notably the rupee? >> the rupee has seen significant gains. the best-performing currency in the world, -- of the 17th -- in the world, of the 17 major currencies. see from this two-day chart, significant gains the last two days alone. certainly last week, as well. the rupee strengthening significantly since modi was put forward as the prime ministerial candidate back in september of last year. it has risen by about 13%. it shows you the impact and the doength of hope that he will change to the economy.
inflationbless, high situation. the current account deficit. all of that needs to be addressed. withs a strong cache gujarat, which clearly he repaired, but can he translate gujarat into the entire country? it's anonymous challenge -- an enormous challenge. the rupee significantly strengthening in the last week, in the last six months. >> most importantly, he has a mandate handed to him by voters. will he deliver? >> the same mandate that obama got, for example, the economy. >> john dawson, thank you. time to check in on some other stories we're following this monday morning. >> i'm mia saini. it is monday, may 19. these are the top stories. japan's factory floor is showing signs of recovery. machine orders smash estimates, rising more than 19% in march as
compared to the previous months. economists were expected an increase of around 16%. the yen jumped on the news. new homeown in china's prices is continuing to spread. in april, prices climbed in 44 of the 70 cities tracked by the government. that is the fewest in a year and a half. it comes as developers offer discounts and property curbs are used in some places. last week, the central banks called one biggest -- the biggest lenders to speed up the process of granting manages. pfizer raise its offer for astrazeneca for a second time, all this in hopes that more casual will assuage british concerns about the takeover. billionbid of 117 dollars would be the biggest ever acquisition of a u.k. company. a finalas said this is offer and it is valid until 5:00 p.m. u.k. time next wednesday -- next monday. >> thank you. coming up next, we will take a global view, including developed or emerging ones and
>> let's get straight to the markets in the asia-pacific. to australia where the index is seen a decline of about 0.5%. the aussie dollar is seeing some modest upside. we will be watching the dollar -- the aussie dollar as it reacts later this week to china's pmi figures. moving to japan with the market has opened, and this is what we have. initial indications are again gain for the nikkei 225. we did have the latest machine orders numbers. they blew past expectations. we will be getting you more on that a little bit later in the show. and south korea, the cost be -- kospi is just getting underway. it is down 0.5%.
the korean won looks like it is strengthening modestly. well, let's stay with the markets. my next guest oversees the investment policy for around $2 trillion in assets. joining me is ups wealth management's global cio alex friedman in from zürich. >> thank you for having me. >> welcome back to hong kong. i have a bit of trivia for you. i bet you didn't know that either yesterday or today, we are still trying to work it out, is the 40th anniversary of the rubik's cube. >> 40th? i think i might've actually known that. i actually just wrote about it. >> you did, and that is why we are talking about it. i want to get into this. you are out with your latest cio monthly letter. that fascinated to read you're using an analogy of the rubik's cube to describe the markets. i'm curious as to how we take that forward through the next of your. tell us what you mean.
>> if you think about the markets today as i do, there are three drivers in each region of the world that are determining markets. one is economics. is the world getting better or worse? the second is essentially central-bank policy. the third is geopolitics. you have to apply those three drivers each reason -- each region, china, u.s., and europe. as you twist it and turn, you come up with different views. that is probably why the equity markets are saying one story, and the bond markets are saying another. >> as we move into the second half of the year, it is hard to believe we are already through the first half of the year, how does it affect your asset allocation? is it the case of equities overweight or out perform in? >> it is a really good question, which i would be overly confident to say i knew the exact answer to, because this is a period where a lot of the professional investors are stepping back and saying, why are the bond market telling us that growth is going to be muted for a long time, where is the equity markets are saying -- staying at all-time highs?
if you have to choose as an investor, which we do, i would overweight equities. overweight equities in the united states and europe. haveally, markets where we some convention about how the central-bank policy will evolve, and we think there is room for increased acceleration. second, we are pretty sure that the dollar will strengthen against the euro, which is not what has happened. there may be disagreement about that. at the end of the day, two things determine what currencies do. central-bank policy and economics. states,in the united central-bank policy is normalizing, and we know the economy is growing and recovering. >> let's talk about geopolitical risk, and then we'll conduct to central banks. how much does this factor into your decision making? certainly what we see in ukraine and other places around the world -- is this as big of a risk as the market makes it out to be? >> it is always an unknown. it is kind of the unknown unknown. just like a fatal disease
outbreaks, like murders, if that becomes a huge deal. we look at it into do -- in two directions. the short-term psychiatry -- psychology of a short-term to clinical event is bad. they go risk off. the second dimension is long-term economics. what does it actually mean for the economy? in the case of russia and the ukraine, until we see oil increased by about $20 a barrel for a sustained period, it shouldn't affect the overall growth of recovery. closer to home, the tensions we see in china with japan or today, it shouldn't be an effect on the markets unless it looks like the u.s. by treaty with japan, for example, have to get involved in some way. we are nowhere near that. i don't think the markets will react in a fundamental way yet. >> i know you're based in zürich, but you take a global view. the tension we have seen in thailand, for example, southeast asia -- how worrisome is that in terms of your investment outlook? many are saying, we are at a crucial phase in thailand. the economy is suffering.
i the emerging markets, when take china, are a tiny portion of the overall global gdp story. as a global investor, it actually doesn't matter that much. i know it might not be the answer that people are looking for. you have to get the basics right, and the basics are china, u.s., europe could do it in china is going to have a hard landing? no. do we think europe is going to spiral into a deflationary dynamic? no. do we think the u.s. is recovering? we do. you can remain overweight inequities. you can remain overweight and other forms of credit. >> a three-part question before we go -- china, do you believe they are getting the policy right and they will avoid that hard landing? >> i think they will avoid a hard landing, but i think the policy evolution will look like a seesaw. they're almost always an equal -- almost never in equilibrium. we go up and down could investors say, i thought growth was 7.5%.
investors may react negatively. in the longer term, this is a positive for china. they are rebalancing towards a sustainable consumption dynamic. >> japan, does this worry you? is abenomics delivering? >> there needs to be new boj easing. there needs to be new fiscal stimulus, and they need to cut the corporate tax rate to 25%. >> we are out of time. it is always great to talk to. alexander friedmann, global chief investment officer for wealth management at ubs, joining us live in the studio. coming up next, six months after typhoon haiyan, we take you back to the philippines to witness the massive rebuilding effort. it is a bloomberg tv special report when "first up" returns. ♪
>> i'm john dawson in hong kong. these are your fx headlines. the leadership change in india's boosting stocks in the repair. electiondra modi victory sent the rupee to an 11-monthh high -- an high. signs of recovery on japan's factory floors is boosting the end. the currency jumped up. machine orders smashed estimates. economists or expect in a 5.8% increase. isiland's first quarter gdp out this morning, and will give us a sign of whether the
tensions and stability are taking a toll on the economy. fall oforecasting a 2.2% in the fourth quarter. that would be the steepest drop since the end of 2011. some economists believe the country may fall into recession this year. this again. look at the markets and direction. first of all, the most important currency, certainly for the last week in the last few months, the rupee. so far this year, i 5% difference. point 78. a way off the record low last year of 66. it shows you a dramatic old of what modi can do in regards to the economy, expectations again. the machineryen, orders, the factory floor, very important indeed. 3.5% strengthening this year. is not, abenomics
helping to weaken it. political tensions in thailand. the cause for concern. jp set default 2.4%. -- gdp set to fall 2.4%. 0.5% is the difference. 32.49. those are your fx headlines driving the markets today. >> it has been six months since typhoon haiyan devastated parts of the philippines. the storm left millions of people homeless and took away their ways of making a living. bloomberg has them back to see how things are not. david inglis sent us this special report. her family survived the disaster, but typhoon haiyan to almost everything they owned. >> my wish now more than
anything else is to earn a living. we can't just rely on eight anymore because i will eventually run out. we need to start rebuilding our lives. >> she is one of the thousands who relied on the fishing industry, one of the main sources of income in the areas devastated by the storm. the u.n. estimates that in just provinces, -- the thousands of ships were destroyed. it will take another year to where things are back to where they were before haiyan. >> it is about the nets trade >> it is the whole supply train. >> what do they do about markets? what do they do about refrigeration? >> the sheer extent of the damage was such that the response from the private sector has been just as critical as the governments and the ngos. quote telecom used the resources to jumpstart retail trade on the
ground. >> we immediately deployed livelihood for 500 stores in tackle them. capital.hem phones, the total is about $200 for one store like this. month, i was already able to sell about $100 worth of things. now i can use some of the money to buy more merchandise to sell. overall, the country's finance ministry estimates that nongovernment aid has so far topped $3 billion. >> we are working closely with micro-finance organizations and micro-insurance organizations that are present in the region, the funds.using this is something we hope to launch within the next month or so. >> in many cases here, it is not enough to simply give them fish or even teach them how to fish.
giving them the tools to rebuild their lives. dividend glaze, bloomberg, tacloban. >> let's check in on markets trading in the asia-pacific as we begin a new week. in japan, you're seeing a gain for the nikkei 225. we had a blowout number on the latest machine orders. we will get you that later in the show. is declining four tens of 1%. in australia, a modest decline for the asx 200, 0.5%. we'll be tracking the aussie-dollar later this week as china reports flash pmi numbers, and we will be watching, of course, thai gdp and hong kong jobless figures later today. the commercial cargo ship has returned to earth at all -- after a month-long stay at the international space station. dragon was released above the south pacific and splashed down five hours later off mexico's baja peninsula. it brought back to tons of scientific experiments and equipment. nasa is paying spacex to make
the deliveries to the iss. spacex is also competing for the right to ferry astronauts into orbit. "godzilla" monster the opposition of the north america box office. the movie is a take on the 1950's japanese classic. it raked in more than $93 million, well ahead of expectations. it marks legendary entertainment second original big-budget production after "pacific rim." is expected to generate $250 million in the u.s. and canada. coming up next, the australian prime minister takes a hit in the first opinion polls after last week's budget. we will take you live to sydney when "first up" returns. ♪\
>> you are looking at a muggy hong kong. we are expecting more rain today, and that is the story all week long. the forecast calls for unsettled weather straight through friday. highs of 30 degrees celsius and humidity hovering around 90%. is it: 30 a.m. and hong kong. we are an hour away from the open of trade. you are watching "first up." norendra modi repairs to take power. the bjp leader says he's doing god's work in india. trading fortunes. plunges, butating
he says it's not a popularity progress -- contest. it is cease-fire for now. apple and google put some intellectual property suits to the side. this half hour of the program. i'm zeb eckert in for angie lau today. check in some other stories making had lines around the world, the south korean president says she is ultimately responsible for the ferry disaster that killed at least 300 people. she also says the coast guard failed to manage the rescue operation, and the system will be dismantled and overhauled. blames collusion between business and government for the disaster. the ferry captain and members of his crew have been charged with homicide. north korea has offered a rare public apology after the collapse of an apartment building under construction in pyongyang. state media showed officials with grieving relatives at the site and the number of victims hasn't been released, but the incident was described as serious. reports from seoul say the 23-story building may have housed more than 90 families.
chargedople have been with negligence in connection with the mine explosion in southern turkey. disaster, died in the and survivors claim the mining company ignored safety concerns and that government inspections had been superficial. the charges can lead to sentences of up to 15 years in prison. the last victims were brought out of the line on saturday. the entrance has now been sealed. closer to home, india is preparing for a new government after one of the biggest election results in decades. the bjp won a landslide victory, and later norendra modi says he is doing god's work. tanvi shukla reports on the challenges he faces. >> good morning. i met the bjp headquarters in the capital of the country, and there is already a lot of buzz happening here. for starters, nobody really thought they would get the economist or a -- get the kind of majority. seats just by themselves.
allies, a their significant majority of 339 seats. it is not something most people were expecting. side, hason the other been completely washed out in the elections of 2014. they have enough seats to relate -- to really be in opposition. that is going to be something interesting to watch out for. will be the next prime minister of the country. over the weekend, he conducted on that the roadshow in the a multipley and had interactions with the media, as well as the people of the in gujarat as well as deli. of course, what we will watch out for is a parliamentary board meeting of the bjp that will take place on may 20 to decide the further course of action -- the future course of action. the first opinion poll taken after last weeks tough
australian budget has seen a collapse in support for tony abbott's coalition government. let's take you to sydney where paul allen is standing by. good morning. let's talk about how bad this poll result was. it was a pretty shocking result. there were actually two polls conducted post-budget, a nielsen poll and a news poll, but they both should pretty much the same thing, really have a collapse in support for the government after that very tough budget that they handed down. let's take a look at the numbers. first of all, the two-party preferred vote, we have the coalition on 44%, down 4%. the opposition labor party, 56%, up 4%. they have opened up a 12-percentage-point lead. take a look at the primary vote. the governing coalition, 35%. labor, 40%. tony abbott, 40%, and the opposition leader bill shorten, 51%, putting him in the
lead for the first time since he got the job. a pretty stunning reversal for a government that was elected with a very, very large majority. this tough budget saw people taking to the streets in most of the australian state capitals over the weekend. really, a lot of broken promises contained in this budget. a lot of new taxes and a lot of pain pretty much shared evenly across the board. the prime minister tony abbott reacted to these polls this morning. he said, this was never going to be easy. we weren't elected to take easy decisions. my job is not to win a popularity contest but to govern the country effectively. is it this harsh budget that has impacted ordinary people in has turned off voters, or is it the broken promises of tony abbott's administration? >> it wasn't a poll question, but it does get to the nub of
the matter. it is interesting that tony abbott said he wasn't there to win a popularity contest, because that is what an election is really. it is a popularity contest, and a won it by putting trust is central issue. all through the election campaign, he was pointing at the outgoing government, the former labour government, for introducing a carbon tax when they said they wouldn't. he campaigned on an issue of trust and then went on to break a lot of election promises. if we take a look at this one sentence from september 23, about a month out from the election, he said, education, to health, no change to pensions, no change to the gst, to the abc or sbs. there are four broken promises in that single sentence and probably a fifth on the way. it seems pretty likely that the goods and services tax will be increased at some point because a lot of health and education funding cuts that have been passed on to state governments. the is what is really at
heart of this, not to mention no new taxes. we have this death levy, a fuel indexation surcharge. there is a word for these things -- it is tax. >> no doubt. paul allen, we will continue to monitor those polls in sydney. certainly, tony abbott facing some headwinds. let's turn our attention to the tech space. apple and google have declared a cease-fire in their intellectual property wars. mia saini is tracking the story for us. what is this all about? >> these are the two big tech giants in selecting valley, and they have eventually said that they are done. they are tired. they are going to drop all the lawsuits between the two companies. they look to move on and actually focus on reforming patent law. what do we know? we know that the patent suits drop concern the motorola mobility patent suits. 20 patent suits were fouled -- filed in the u.s. as well as eu.
they will still battle it out, not in the courtroom, but when it comes to mobile operations, mobile maps, as well as online music. of course, they are duking it out mainly because of the fact that they felt they needed to show consumers, show the law, show the consumers -- the courtrooms who was right and who was wrong when it came to certain patents but also when it came to certain technology they had thought they owned the rights to, especially when it comes to the license point of view. the question is, how big of a deal is this going forward? should you put all of your legal -- google said they spent close to $35 million -- should they do this for something like mobile -- motorola mobility, which many say isn't a competitive product? >> what does this mean for apple's legal fight with samsung, which is really the blockbuster fight in courtrooms around the world? >> you should see this very symbolically. apple is saying, hey, we are not going to go after you, google, but we are going to double up
and go after samsung. if you think about rivalries, it is these two giants, samsung and apple, that have gone head-to-head when it comes to the smart phone space. last month, i was reporting to you that apple is seeking $2 billion from samsung. they only got $120 million out of that. samsung only had to pay -- apple had to pay $158,000 to samsung and by far, samsung is the largest android phone manufacturer. of course, android operated by google. them saying that they are going to go and fight samsung and the next part of the ruling is whether or not certain shipments should be banned from the united states. >> it is complicated and a story we are going to continue to follow one burglar -- on bloomberg. it seems that everyone is launching tablet devices. later in the program, we take a look at the latest player to launch a new computer. it is for a very exclusive clientele. we will take you there.
it is time now for a look at some of the other stories making headlines today here on bloomberg. recalling more than 160,000 cars in china. john dawson has more. the models were built between january and september he of 2011. chinese inspectors say the recalls are doing -- are due to faulty parts and may lead to fuel leaks. china has -- china southern has signed a new deal with airbus. it has a listed value of $7.3 billion. 's as arier wants a320 delivery -- as travel continues to grow. order only last week. the ceo of credit suisse may step down as the company tries to resolve a criminal probe of its tax evasion in the u.s. that is according to a swiss newspaper. at the bank may plead guilty and
pay $2.5 billion in fines as part of a settlement with u.s. authorities. the announcement could come as early as today. those are the top corporate headlines this monday. i am john dawson. thanks, john. coming up, we will be taking a closer look at the bjp's landslide victory in india. we will look at the challenges ahead as norendra modi prepares to take power. ♪
>> let's do a quick check on the markets around play -- around the asia pacific. the nikkei 225 looks like this. the index is modestly lower. if you're looking at a live view of the imperial palace. have machine orders from japan. impressing to the upside. the asx 200 on a sunny day is trading lower, 7/10 of 1%. ospi looks like this.
we are seeing the index generally lower. the declines continue with a -- 1%f one percent drop drop it we are 50 minutes way from the start of trade in singapore. heavy thunderstorms this morning in the lion city. it looks cloudy. futures indicate a pretty much flat open for the singapore futures. let's take a closer look at the bjp's landslide victory in india. let's go live to singapore where the senior research fellow at the institute of southeast asian -- south asian studies is there. first off, i want to get your sense of just how momentous this victory is for mr. modi, and will he be able to translate it into effective and meaningful reforms in india? >> this is the first time in 30 years that a party has won a majority on its own in india. in that sense, it is a
significant victory. thatroblem for mr. modi the expectations for he and the bjp party will be huge. there will be a huge burden of expectation, and he will be expected to deliver very quickly. >> i was stunned to learn that this was the first time in india's history that any other party in the congress party, led by the gandhi family, has delivered such a defeat. what does that say about voter expectations in india and the kinds of change that ordinary people want to see in delhi? >> as i said, i think expectations are huge. that is why mr. modi has won such a resounding mandate. i think some of the expectations, in terms of growth, employment, controlling price inflation -- there'll be all sorts of expectations on the bjp, and i don't think voters will be to patient. i think they will be expecting
results very quickly, very soon. >> there has been some criticism of his style as heavy-handed. i saw one report calling it "dictatorial." how effective will he be intransigent some of these big picture projects? a pro-business, initiative, in a country where you have many diverse voices. >> of course, mr. modi has been a three-time chief minister of gujarat, and he has done reasonably well. he has administrative experience, but he does have an image of being somewhat autocratic. fights leader who really the opposition. when he is governing at an all india level, i think you might have to change his style. to carry along the rest of india , other members of his party, the regional parties that are part of his coalition. i think he will have to change
his style if he is going to be successful in india, but as i was saying, the perception of economic superman might be a hindrance. he did well in gujarat. however, there has been criticism, of course, from minorities in india over a difficult past. i'm curious how he bridges these gaps. india is a big country, a very diverse country, and certainly, he wants to appeal, i would think, to all members of society. how does he get over lingering resentment among some ethnic minorities? it is a real blot on his record, and he has not yet publicly apologized for the violence in 2002. in the bjp were fairly ofeful to avoid any mention rights, as well as they didn't
try to antagonize the minorities. now, it is a real question as to how mr. modi will handle the minorities in the coming months and years. the minorities, i don't think, are very trusting of mr. modi. he has to be the one who has to reach out and make them feel comfortable, make them feel like they are part of the experiment that the bjp will embark upon. 's andreally mr. modi the bjp's responsibly to make minorities still comfortable. leasttainly, or at anecdotally, we know muslims face discrimination in india. we have to believe that they worry about their position in society. just an extension of that, are there places in india where you think mr. modi will face the biggest challenge is as he tries to carry his agenda forward? where will he have to try hardest? i think assuaging the
minority sentiment is something that has to be top of his agenda. the feeling within the bjp, it seems, is that if they can deliver on jobs, on growth, on development, they think that will makeising boat the muslim minority in christian and christian -- minority happy. i don't think they will be putting in place programs that will be minority-specific. i think their idea is if they can deliver on the other issues, they will be able to make the minorities happy, too. that is the sense one is getting. >> thank you for your views. dr. sen is the author of he is as of faith," and senior research fellow at the institute of south asia studies at national university of singapore. time to take a look at some of the stories we will be following this week on bloomberg. as we take a look at the week
ahead, president vladimir putin starts a brief visit to the region on tuesday, meeting his chinese counterpart in shanghai. sign apresident xi may 30-year deal for russia to supply natural gas. the crisis in ukraine has raised beijing's importance to moscow, as western sanctions bite. football and one come together in hong kong on wednesday. retired manchester united manager sir alex ferguson is selling fine wine from his personal collection. it is the first of a series of auctions that may raise $5 million. bottles will include memorabilia from his legendary chimeric -- career. sony's stock tumbled last week following a surprise forecast of yet another annual loss for a sixth year out of seven. the briefing will be held by the president who is under increasing pressure to turn the company around. the to football, the end of
week, saturday sees a nine time european champion real madrid tackle city rival athletic oho in the final -- athletico in the final. it is happening in lisbon, and it is the first time that the teams -- that teams from the same city have appeared in the final. coming up next, it is the first trading day of the week. you'll find out what our reporters are watching as the markets get underway. it is our popular stock exchange segment, and we hope you will join us in two minutes. ♪
you mayis a tech story find unusual. north korea has entered the tablet market with a range of homegrown devices. they're not exactly threatening samsung or apple, but as paul allen reports, it will allow some in the reclusive state to become a bit more connected. >> north korea isn't the kind of country to let something like a lack of internet access get in the way of a budding mobile device industry. byr tablets marketed
separate companies are now available in north korea, and all were on display at the recent pyongyang international trade fair. , we are selling them with a lot of applications, including a lot of literary and artistic works, which are widely read by our people. also, the textbooks and reference books which help people study. recently, among tablets, the tablet with tv function is the most popular. right, the corporation's smallest tablet includes a retro antenna, offering improved reception for state run tv. international internet access is heavily restricted in the secretive country, so users of the devices can only connect to north korea's only -- own a local internet. the software is strangely similar to microsoft office. two of the four companies selling tablet import hardware from china and taiwan and modify it, but pyongyang technology ies import components and
assemble them in north korea. >> the educational tablet we are developing and producing has an operating system adapted to our own style and you select locations. than 400et has more multimedia resources, including textbooks and reference books for primary and middle school, and has the function of handlingy search, multimedia, and handling documents. it is just as capable as a computer. >> the devices has been surprisingly well reviewed, and at a mere $260 for the top-of-the-line model, they are a bargain. only for those not earning the average north korean wage. paul allen, bloomberg. ♪ >> before we come to the end of today's program, it is time for the stock exchange. time to check on what our reporters are watching with trades underway in the major markets in asia. i'm joined by mia saini and john dawson.
>> merger monday. i'm looking that mori exit. it is a supermarket chain that operates and sells groceries and food. it is up 19%. out of the gate, up close to 14%. nikkei reporting that e.on, retailing giant in japan come is going to form a conglomerate with this company, as well as consume me, holding company, and as a result, they will be one of the largest japanese retail chains. this stock will be relisted -- delisted. the holding company will start in spring of 2015. >> japan tobacco, sarah -- shares in march following. 20 buys. one sell. the stock has gone down this year so far. an under performer. it is off about .25%. >> not a big move. we will leave it at that.