tv On the Move With Rishaad Salamat Bloomberg May 26, 2014 9:00pm-11:01pm EDT
we will start with some breaking news. a chinese ship has sunk in a be a mimes -- a.b. in the maze of fishing boat -- a vietnamese a fishing boat. >> we have very little information coming that yes, a chinese vessel attacked a.b. at mimesis ship -- i tapped a vietnamese ship. sank, he says, and it was random by a chinese and oat -- boat. it happened at about 4 p.m. yesterday. the fishing boat had 10 people on board. other vietnamese boats in the story thatding to a came out in the newspaper in vietnam, the vietnamese ship
operating was encircled by force chinese fishing vessels. what vietnam regards as its exclusive economic zone. it is not a lot -- we are following the story. we have a chinese ship ramming a vietnamese fishing boat at about 4 p.m. yesterday. four people were onboard. we have more information coming from the foreign ministry in vietnam. that is all we know so far. we will follow the story. >> malaysia airlines is carrying out a full review of its business following the disappearance of flight 370. it has been following up with losses but it aims to break the next year. bankruptcy is not an option, we are told. are we buying into this turnaround story or not? is tough for malaysia
airlines reeling from mh370 zero. . malaysia looking like a less attractive tourist destination. if you take a look at the financial woes, they go back way before the incident. this is the country's national airline. it is long relied on the government for funds. it has had a long restructurings. it has been over stuffing and tremendous union resistance the cost-cutting. agreed 2011, the chief to help relaunch, rebranded malaysia airlines but that didn't happen because unions were blamed for the deal. malaysia airlines in deep financial problems. bankruptcy is not the option right now and that is according to the commercial director. take a listen.
>> i don't believe we had excluded any consideration at this stage. now is the time to take a close look at all aspects of our business model and find out of those who are cauhgght to it. those are the cores we believe other groups can do it more efficiently and we should start looking at it. no decision has been made yet. let's bring in deborah to discuss this. the stock has been pummeled but what is happening right now? underperformed its peers in the category of the airline space thacross asia. you see again for malaysia airlines so recouping from those losses we have seen but it is down about 60% give or take on an annual basis. on the business of malaysia airlines, as seen a consistent decline in profits in recent
years. this has nothing fuel cost and maintenance costs rising. basically wiping out revenue. that was the story -- last year, the company missed its targets and it has lost a total of about 5 billion ringut. take a look at the profit numbers. this is u.s. dollars. these are the final net income figures. i have taken a look back at 2010 -- they earned $73 million but look at the trajectory. ine -- $825 million loss 2011. moderated next year and got worse in 2013 and this year is expected to still be bad. >> what was behind this enormous loss? >> you can save as the global financial crisis. hit, airline got especially in the premium space
where there is corporate and business flyers would be traveling. the stock tells the story of what investors think about malaysia airlines. this is a company that has seen its market value really fall off the cliff and that is why so many people are saying bankruptcy perhaps may be an option here. if you look at malaysia against its oneworld peers, he joined the oneworld alliance last year or the year before. it trails all of its peers in the alliance. all of them with the exception of british airways are up. and if you down 44% look at it compared to the southeast asia carriers, singapore air and garuda, malaysia airlines is a clear underperformer. i guess it is worth looking at garuda's experience in terms of how it turned its business around in a tough time. it may yield some lessons.
>> bookings for china so far since the disappearance of the lane are down 50%. >> that is the obvious elephant in the room. i could bring you back here -- what about the future for malaysian airlines. could a cover its brand reputation or is it damaged irreparably? .> garuda it did it i it had a similar profile. malaysia airlines hoping to do the same. one of the priorities will the cost and that can come in the form of new fuel-efficient jets. some analysts say that malaysia airlines should consider spinning off its units which will be tough. the carrier is optimistic and it has to be. take a listen. >> i am very confident we can do that. malaysia airlines has been around for over 40 years.
we have a world-class reputation. we are one of the only seven airlines in the world that has a five-star rating and our cabin crew has probably one world's best cabin crew -- standards are on par with the very best airlines. >> we are going to have the full interview a little later. update.u on that indian futures are trading right now. after the non-duration of the new prime minister, you see the market showing a slight incline and yesterday there was a gain. it opens in about 2.5 hours. we look forward to that. also, we are looking at the impact of this. we have the sluggish economy in backlog of state
projects valued at $200 billion. there was a matter of improving relations with pakistan. they looking at the challenges that face the new prime minister. >> modi was sworn into office yesterday. the president of india provided the oath of office to him and the cabinet. many high-level leaders from south asia were in attendance, including the president of afghanistan as well as sri lanka. as you said, the backdrop in terms of the challenges or what is going to be the most moditant obstacles that will have to try to overcome, jpmorgan says that perhaps 70% of those challenges you will not be able to overcome because there's a lot more -- he will not be able to overcome because there is a lot more structural challenges. onhaps some of the biggest
the fact that these trade disputes with the u.s. one analyst calling it the worst trade relationship in two decad es. they have been strained since across the board from protectionism and patent disputes. which isthe next one the wto complaints as it pertains to imports of solar. we talk about this frequently on our program the fact that many multinational corporations doing business in india and say it is horrid. walmart says it is not workable. the last one is probably thematic. a sentiment that was expressed throughout the campaign trail. on jobdi wanted to focus creation, on infrastructure development. that would ultimately then translate into exports. many people say you cannot take the draft model and blanket that across india. that one not just work.
despite the fact the we did get some more upbeat data overnight, it narrowed to a fresh new four-year low. one of member cabinet, the smallest ever. there really squeezing it in. an effective through, that is the plan. minimum government, maximum governance. pakistan was there. what about the foreign policy? >> i'm glad you mentioned pakistan because the relationship with pakistan has been very tried for several years, especially since the 2008 bombings at the toss mahal hotel in mumbai. the president of pakistan -- the prime minister of pakistan will be meeting with modi today. sharif's first visit to india in 23 years.
the nations will focus on peaceful resolution of border disputes, terrorism strikes, and building trade. the two nations combined have more people than china -- 1.4 bg illion people but they don't take advantage of the fact they don't do enough business. they share 2000 mile border. they speak the same language yet they don't take advantage of finding ways to create synergy. .5% less and india's combined commerce with other nations. are speaking to bridge ties between a new nations that have been very challenged in the past. the goal is what to expect going forward in both seem very optimistic. >> thank you for that developing story. up next, we are live in bangkok for more on how political tour model -- turmoil is affecting business and investment. ♪
>> welcome back. now for the development so far in thailand. military leaders have rented a -- threatened to crack down on military coup protests. demonstrators again took to the streets of bangkok in defiance of the army's warnings. nues toitary contio hold people back. protest leaders appeared before the attorney general to answer charges of insurrection. guest knows about the talent exchange.
-- thailand exchange. thank you for joining us. this is the most tense time you experienced in the last four years. what is been the impact on the thailand exchange due to the unrest? been far, the market has quite resilient. so far, the index moved up about 6%. it happened to be among the best performers in asia today. that is because we have quite a retailsth of our large space. >> is that one of the key reason -- in your tenure, the last four years, you see retail investors rise 73%. is that really the cushion that
is shielding the exchange and the impact? yes. this has been proven all along. time,the beginning of my we were under political crisis at that time until now. investorsgood mix of such as we have a large portal ool atail investors -- p retail investors and local institutions. the way we think is different because the foreign institutions won't have a political crisis in or crisis -- in the country any crisis, the alternative to go elsewhere with the deep retail base, we were able to take advantage because we know especially for political problems, it comes and
eventually goes in three weeks or three months. of actually it goes away -- eventually it goes away. >> one of the key areas of your success is to attract or even listed on the exchange. we have seen foreign investors. the only conversation of net markets is out the year to date. get foreign companies to invest or enlist? >> basically, we have to look at the fundamentals and look at the long-term. hai hasf all, the t become the largest venue for fundraising. last year, we were able to raise more than $6 million. the top two ipo's in the region
comes from thailand. the ability to do the fundraising, the liquid market, we had the most liquid market in the region as well. turnover of in excess of millions -- billions, much higher than the number two. the liquid market and the withty to raise funds and the listed firm that has the ability to produce a good profit and good dividends even amidst all of the external crisis that we have gone through maybe about 10 of them in the past eight years, has been proven that we are the market of choice. >> it seems like you were the only ones with net outflows year to date. what do you think is required to catalystigger -- what
to bring in the foreign investors because you were not really doing it right now. ? >> the only reason why we are having outflow is the as of the last week. for this year alone, the net in flow was just about even until last week. tot definitely is due buttical problems today, this is a way to move the country forward. what happened in the past several months -- we were in a p olitical of deadlock and as a result we were not able to move the economic engine properly. we just have to reset the system and get back to normal as soon as possible. the best way for us to do that is to communicate with investors. as soon as we have the new information. to new information that came out
in the last couple of days is a clear roadmap and moving the country forward. yesterday, we started to pay back the money to the farmers, the money that the government has promised to pay for the past several months and was not able to do under the past election rule,ule -- electoral and past political parties. we have to go one step at a time. >> one last question. what lies ahead? the coup and military rule, this could last months. if you were gifted -- if you were to give advice to your successor, what is the most immediate ring that must happen to make a big presence on the global map? immediately, we have to continue to communicate to the
investors and get information from the political -- from the existing military government towards the investor. we have made a lot of progress, but we have to make sure that we communicate to the investors fast and clearly. thank you for joining us. we are going to check on on the big stories of the morning. that is coming up after the break. ♪
is tuesday, may the 27th and here are your headlines. let's talk about europe because the problem there is low inflation. officials are working on a package of possible stimulus measures for the eurozone, including liquidity injections which markets are expected to be introduced in the first week of june. the ecb added the key issue is timing, perhaps holding out asset purchases as the more powerful option at some point. it has gone from worst to first. demand has come from foreign funds which has temporarily pulled out cash from neighboring
thailand. philippines, the country has released its latest trade figures for marhcch. in doubled. aboutthan estimates at $187 million. hong kong released its measures for april and it is pointing to a of $46 billion. there you go. that is the three-month low we are talking about for the common courtesy. continue to watch that closely. we will be back.
>> stormy seas -- vietnam says china has sunk one of his boats -- its boats. thailand's military leaders about the crackdown on protests. turnaround on track -- malaysia airlines aims to break even next year. we have had breaking news. vietnam says china has sunk one of its fishing boats. the waters are under dispute.
what is going on? at vietnam newspapers reporting that a chinese vessel did attack a vietnamese fishing boat, sinking the boat carrying 10 people. that has been confirmed by the vietnamese foreign ministry that indeed it did take place 4:00 17. yesterday at about nautical miles from the chinese oil rig which we know sparked the wave of protests in vietnam. statement fromis the foreign ministry in vietnam, the fishing boat was rammed and was sunk. the 10 people were rescued by fishing boats nearby. some says, maybe to put context, that area was in their territory. they can do whatever they want.
the anon says otherwise. -- vietnam says otherwise. the prime minister says that the chinese ships are violating international law. that may recap -- let me recap. andinese vessel attacked sank a vietnamese fishing boat in disputed waters off vietnam's coast. back to you. opening of markets on this tuesday morning in hong kong and shanghai. what is take a look at happening across the asia-pacific. a little bit of a mixed performance for equities. --will get you won't cross we will get you across the spectrum. the regional benchmark is climbing for today.
we are seeing in almost six months. industrial metals having a big impact. in the those advancing prospect that policymakers will be closely watching and supporting global economic growth. you have the australian dollar reacting to all of this. this is what we have -- a decline for the index today. closely watching china, we have money market rates yesterday plunging the most in three weeks. we will be watching those midmorning when those numbers are fixed in shanghai. we will bring you that later. those resource stocks are moving today. check out the big movers on the downside. china mobile and were holding -- whorf holdings. you see the macao casino stocks rising. the insurers seeing again
immodest of that. move relative the to commodities. you are seeing copper advancing. copper is seeing an impact because of china which is the biggest user of industrial metals globally. check out some of the movers -- lynas, a rare earth producer, it is leading. it is up on the order of 2%. media stocks are singing downside in sydney today. that is what we're seeing early going. we will be watching malaysia airlines as that stock gets underway. of that, malaysia airlines is carrying out a full review of its business following the missing flight 370. it aims to break even next year. we are told bankruptcy is not an option.
they will overhaul operations to turn the business right around. >> i am very confident we can do that. malaysia airlines has been around for over 40 years. we have a world-class reputation. we are one of only seven airlines in the world to have a five-star rating. our cabin crew in the last 10 or 12 years -- >> safety standards that matter. >> the safety standards of malaysia airlines are on par with the very best airlines in the world. >> how realistic is a turnaround? there is a sell rating on the company in the shares have dropped 18% recently. investors are not buying into the turnaround story. >> i think our turnaround story was moving along. mh370 certainly did not encourage that. that has been a major pickup -- hiccup.
>> if you take a look over the past 12 months, the shares have dropped 60%. probablyeve mh370 disrupted the dead turnaround plan for 2014, but i believe we want to make sure that regardless of 2014, we need to make a turnaround for 2015. is unreasonable to expect by the level of disruption caused by mh370 that any plan we had from september of last year will survive into 2014. now, our process will be let us recover as much business as we can. >> is bankruptcy in option -- an option? i don't see that. >> i don't see that. thatat you think of people make common that bankruptcy is one way to allow you to restructure? >> it it depends -- it depends on the rules.
was chapter 11 bankruptcy that allows the company to reorganize itself while being protected by predators during that reorganization phase. i am not the finance guy at malaysia airlines, i am not sure what the rules are within malaysia for such a reorganization. >> from the stories making headlines, south korea has raised a bounty for information of the sunken ferry. the government will pay $500,000 for the search of the controller of the marina, the company that operated the ship. the billionaire is really for ely photographed. the nigerian army says it knows where hundreds of kidnapped schoolgirls are being held. rescuing them may risk their lives. kidnapped ins were northeast nigeria six weeks ago.
the government and military has faced international anger for their failure to state or rescue them. first talksart his with his pakistani counterparts. they will attend -- they attending modi's inauguration in new delhi. modi says that improving relations will make the country's very much high on the agenda. ukraine's new leader says they are ready with talks with pressure and pledges to end the violence. against to step up separatists. the decisive win saves ukraine and him a time-consuming second round of voting. now what yesterday was quite literally saved the country. >> ukraine is in the state of war, it is the object of
aggression. every single night, ukrainian soldiers are giving their lives for restoring law, order, and peace in the eastern part of ukraine. president, as the but as future commander-in-chief, trying to do my best to defend ukraine and the people to bring security and peace. >> that peace is already being tested. the very same separatist that spent election day seized a regional airport today. the president-elect says he favors a continuation of military operations with the russian foreign minister spoke shortly after that said a decision to do that would be a colossal mistake. is ready forays it direct negotiations with ukraine's future president. >> developments in thailand --
military leaders have threatened to crack down on anti-coup protests. took to streets of bangkok and defiant of the army's warnings. they hold people in the long run a political unrest. the whereabouts of former prime minister is no on clear -- is still unclear. unrest in thailand has created uncertainty not just inside that country but also southeast asia. -- beforeister minister came -- issuesope to see the resolved without violence. thailand is the second-highest economy in southeast asia and in instability in thailand,
a way that is acceptable for all of us, is something that everyone wants to see. the approach has always been a conservative one based on consensus. asion has not taken the part of know,ons or, you commenting on internal processes. inlooking at what happened 2006 and the events that unfolded over the last decade or so, how concerned are you that thailand is on the verge of a civil war? >> all of us want internal stability. thailand since 2006 has had a number of issues. the political stability has not always been there. it has been impacted. i don't think it is good for the thai economy. as soon as the situation gets
resolved in a way that is acceptable for everyone within thailand and in a way that avoids violence, is better. >> in 2006, it took about 15 months for elections to take place. are you concerned that this process will be repeated again and does this add the element of risk to the economic environment? >> uncertainty is not good for the thailand economy and by extension it is not good for the rest of us. i think the leadership recognizes that. ukraine's prime minister talking to us. up next, it is moved time. china is still chasing the u.s. when it comes to the silver screen. we are back after this very short break. ♪
>> welcome back. we are streaming on bloomberg.com and your mobile device. the losses may be coming to the end for sony. the units could generate the first profits in more than a decade. adventureter forming to bring the ps3 playstation to china. the week and kicked off with a blockbuster movie season in the states but china is hoping to catch up to hollywood's to get releases and do it very soon. >> we are going to the movies. the memorial day weekend ranks as the biggest of the year for hollywood. kids are out of school. x-men toppledend, godzilla in the u.s. and canada bringing in more than $90.7 million in ticket sales.
the movie brought in the second highest opening weekend of all time in china. million toe to $37.7 6000 movie screens. it debuted only 5% of the opening numbers of titanic 3-d. china presents a challenge and an opportunity to u.s. studios. the government restricts the number of foreign films allowing just 34 imports a year. so far this year, it is worth to look at the numbers. china's box office sales have bought in 1.6 billion dollars but ticket sales in the u.s. is a lot stronger. sales so far this year has trumped $3.1 billion. about 44% in china is international films. these films have brought in over $700 million this year.
year, it took china to six months to hit that amount so they are doing pretty well almost five months. calculation, by the end of this year, china will break and $4.5 billion in sales. what are the chinese watching? there is some overlap with the u.s.. china's the monkey king is the number one film right now with $166 million but hollywood's captain america is number two with $115 million. it is becoming a booming industry. the parent company wants a bigger piece of the pie. they're hoping to cash in on china's interest in cinema and film. they announced they plan to build a film studio to rival that of 12 -- of hollywood in china and lots of major
with thet came out report and basically will be outlined his three different scenarios under which a financial crisis could occur. our conclusion is really that there is very little likelihood of a financial crisis in the becausem primarily there was a lot of policy room for the chinese government to take. measures to stem any potential financial crisis. and because it is a close capital market system. if you think of the credit system in china has a bubble, is a balloon and you tighten one hand, what happens is that credit goes to the other end. credit is being channeled from the channel banking system -- shadow banking system into the regular banking system. if you look at the banks, they are quite well-capitalized. there is a lot of room for reserve cuts that could ease the system a little bit and gives a little more capacity. >> is it not a bigger risk?
>> that is the biggest risk. is that growth slows to a point where by corporate are default thing on their debt. that is the big challenge that the government has is how do i implement structural reforms to increase growth while decreasing leverage which is naturally a drag on growth? is a delicate balance. they are not on a position that will boot push anything over the edge. that arts is saying rapid growth and credit would lead to less growth. >> is a frightening scenario but the basic fundamentals of a functioning market is such that you get to price risk appropriately. china has not been doing that for a long time. what they need to do is fix to this capital misallocation problem and they have been on that road.
they're looking at ways to fix that problem. there on the right track. they are not it -- really forthcoming with their information so how did you find information to give this positive take? >> we looked at three scenarios. the first is how do financial crises occur? there is usually a run on the banks of some sort so there is really a retail run which in china is very unlikely given the potential political ramifications of the government allowing that to happen. the potential institutional interbank issue which given the policy room, i think that is not a huge issue. finally, the last is an external debt issue which allows asian financial crisis which is not an issue given the amount of external debt versus currency reserves. >> how deep is the crisis right now? >> the crisis is deep.
>> the chinese don't really give us information. >> there was no question to get accurate numbers on how deep it is tough. if you look at where the bank valuations are trading right now, they are trading at lower ratios versus the u.s. during the height of the financial crisis. the markets have already discounted that. this is something that the markets have been aware of. >> the report said the big risk is that the defaults, when they happen, are mishandled. >> that's right. we're not saying there is zero probability. you do think of a scenario if they miss handle a potential a crisis intrigger confidence, that would lead to a widespread panic and potential for financial crisis. that is low probability. >> argue the contrary in view,
the more upbeat view? >> i think it is relatively consensus that financial crisis probably will not happen. although, generally we are a little more positive on the value strategies. we have some good risk return trades in value. very few people have that. it is going to be a bumpy right but if you have the time, we think it will pay off. ps one of the biggest bum -- and bank look at npl's valuations and bank balance sheets, they could probably absorbed quite easily a 5% loss without going into being dissolved essentially. those banks are well-capitalized. there is a lot of room for the government to help them out if necessary. we do not think that will happen
in a new -- in the near-term. >> thank you for joining us. upbeat on credit default issues in china. quick glance at the markets. we have across the board -- hong kong and shanghai. 4.5% increase in both april and the forecast. the market is more or less unchanged. china is off by 1/5 of 1%. indonesia was closed. gains.seeing slight the u.s. is closed for memorial day hence the little traction from the u.s. markets. fight or flight? we are going to discuss the turnaround plans for malaysia airlines. that is when we return. ♪
chinese vessel sank a vietnamese fishing boat. quite a surprise. >> there have been tensions. we all know that. and oil rig. as we all know, violent protests across vietnam. what we had over the past half an hour, hour and a half or rather, the chinese rig. nautical miles7 off the oil rig. a chinese vessel rammed into a fishing boat carrying 10 people. it immediately sunk. 10 people were rescued. reportsrms the earlier from a vietnamese newspaper. let me read part of it. early this morning a bit is me was -- vietnamese ship
first encircled by 40 chinese and subsequently round. we got confirmation from vietnam by the for ministry put out a statement. begun find it on their website. the spokesperson said it sank and it was rammed by a chinese boat. it took place at four clock p.m. yesterday. the's what we have for moment. not a lot of details but all we need. >> very aggressive. the disputed waters. 40 shipping vessels from china surrounded a one. >> china said there have been in his ownthe rig is territory. >> the disputed waters. >> whoever was in manila speaking and he said in a speech that these actions from china and was the same thing coming from the president who also did
the same thing and these actions do violate international law which is the united nations international law. >> a lot of tensions around asia, isn't it? -- thailand vietnam, north vietnam. >> over the past few weeks. the latestu for story. the new prime minister modi will pakistani with his counterpart. his inauguration was in new delhi. he there were a series of clashes. said improved relations with neighboring countries is high on the agenda. said he is ready for talks with russia and pledges to curb the violence. a russian said that are ready for talks. faced with a
shrinking economy and pro-russian forces trying to take control of the ukraine east. violence is grubbing eastern ukraine. separatists gunmen took over the airport and refuse an ultimatum to leave. he reiterated his pledge to bring the fighting to an end. kuala lumpur said raw satelliate data related to the missing plane could become a public today. thatare set to share they'll plane ended up in the indian ocean after changing course. has beenh area expended. most of the passengers were chinese. malaysian airlines is going over review of its
business. increasing rivalry but aims to break even next year. bankruptcy, we are told, is not an option. haslinda joins us. we buying the story of a turnaround or not? tall.is its financial woes go way back before mh 370 went missing. depended on the government. it has several restructuring. this time around, it hopes it will be different. can do very confident we that. malaysian airlines has been around for over 40 years. we have a world-class reputation. we're only one of the seven airlines and the world has a five star rating. the cabin crew in the past 10 years have one first cabin crew.
par withards are on the very best in the world. >> how realistic is a turnaround? have aof 16 analysts sour rating on the company and thus stocks dropped 18% recently. investors are not buying into the story. >> i think that turnaround story is moving along. mh 370 did not encourage that. that certainly has been major hiccup in the road. we have to go back and fix that. >> you look over the past 12 months, shares have dropped 60%. >> i believe mh 370 disrupted our turnaround plans. but i believe the team will want to make sure regardless, we have to make a turnaround for 2015. i think it would be unreasonable to expect the level of disruption caused by mh 370 that any plan we had from september last year will survive in 2014
now. now, our process will be less -- let us recover as much of this is as we can. >> is bankruptcy an option? >> i do not see that as an option at this stage. >> what did you think of people who make comments that bankruptcy is one way to allow restructure your airlines? >> it depends on the rules that apply. north america certain , jurisdictions, those chapter 11 bankruptcies that allow a company to reorganize itself and be protected from creditors during the phase. i am not sure since i am not in the finance guy at malaysia was -- what the rules are for such a structured organization. it not ok to refer to the missing plane as a hick cop? --
hick up -- hiccup? >> it is not the best way. it is cringe worthy. it is a hurdlews that can be overcome. out 17 analysts -- --nted out that 70 analyst 17 analysts -- [indiscernible] >> he said one of the ways to make it more efficient there is a need to get fuel efficient planes and that as part of the overhaul, the revamp he is trying to make. >> our correspondence. they promised to turn things around. after the break, some other
first of all, can you apply the garuda turnaround strategy to malaysian? >> thank you forgive me the opportunity to see the. there are many lessons from garuda that apply to any turnaround. i think there is certainly lessons that can be plan to malaysian airlines. i think it's important to say that some of these things are things that malaysian airlines is already implementing. the first one is management needs to be grounded. with theomething changes in the last couple of years and the second thing is they need to roll up their story -- please and not to be afraid to get their hands dirty. when he got to the management to go down and clean airplanes themselves and took
responsibility himself. he wants to teach of the staff to take pride in their work. lessons that more can be taken from garuda. they have to be careful that the companies are starting in certain positions. when the ceo came . you had in the industry worldwide booming and india doing well. you had access to the capital markets. you look at malaysia airlines a you have -- and you have a situational where garuda could go to the market and look for more efficient aircrafts. at the moment, anybody looking for efficient aircrafts will take a long time to get. the starting points between the 2 are not that different. >> the company said malaysian airlines have a review and
implementation. therefore, a year. that's a lot of business carriers that has to do with hugh dunleavy referring to the missing airplane as a "hiccup." it is more than that isn't it? >> i am a little bit concerned about any time a turnaround plan is announced in six months and limitation. theee a real turnaround in distance, we need to see that we address revenue issues and cost issues. what we heard is an outline of what it will take. costs areine, labor key assets. takes 6-9 months before you start to implement and start to spend money in order for the
cost of the business. on the revenue side, you can start to take action immediately as they go by incremental revenue starting to show up within days. if i wanted to hear a confidence story about restructuring and actions on the revenue side, having said that, the company has been a restructure for almost two decades. every one or two years, we hear the same plan. awould think they already had cost reduction plan that they have been implementing for a while. i'm not sure why would have to wait another nine months. >> whatever play they had, mh 370 everything goes out. you -- it is easy to quantify the brand damage. was it still happening with the missing plane -- what is still happening with the missing plane . how do you assess that and how
advanced -- advise the burress situation? -- and the brand situation? went to their turnaround, and they had a long history of damage to the brand. they been banned from flying to europe in 2010. in the case of malaysia airlines , the restructuring, they do not need a rebranding our restructuring because they had a reputation as being one the highest quality airlines in the world. at the moment and now, we are see a brand damage. it is not an issue him a it is a to then of -- a lot market will fashion this about safety. it is in the hearts and minds of people in china. the airline is starting with a much higher brand equity. that is obsolete being er -- that is i visibly being --
veryusly being eroded quickly. >> a bankruptcy, is that a viable option or being ruled out? do you see it on the horizon? wis -- wish of bankruptcy, they have to look at restructuring. they have to address it. doing things differently. adapted be efficient. going through bankruptcy is not going to address that. they have to do better. deliver better. deliver promised. whether youhappen have an administrative process or not. they will have to rebuild. that will be simply executed.
>> welcome back. development in thailand. almost $3 billion in rice subsidies. took thetors again streets of bangkok in defiance of the warnings. the administration continue to tell people. the whereabouts of former prime minister yingluck are still unclear. singapore and thailand. speaking to bloomberg among the foreign minister said only the thais can fix her own problem. >> we hope to see it resolved with out bloodshed or violence.
the stability in thailand, thailand getting back to a path of growth that is acceptable to all of its people is something that everybody wants. based on consensus. generally taking the part of sanctions or you know, commenting on internal processes. in 2006at what happened and the events that unfolded over the last decade or so, how concerned are you that thailand is on the verge of a civil war? >> all of us want internal stability. since 2006 has had a number of issues. political stability has not always been there.
has been impacted. i do not think it is go for the economy or the people. the sooner the situation gets resolved, everybody within thailand, and in a way and i keep emphasizing that. it took about 15 months for elections to take place. are you concerned that this process will be repeated again and it doesn't add the element -- and does it add the element? >> uncertainty is not good for the thai economy and the rest of us. and i think that thai leadership recognizes that. minister shanmugam speaking earlier. several japanese companies have voiced concern about turmoil threatening the business as
well. also to tokyo. craddock, -- craig, which companies are complaining? under threeeeing years ago, you had asked of god affecting thailand. the worst floods in half a century. we have asked of man now and it -- acts- we have askeds of a man that is now influencing. sony warning about business trips to thailand. if they are required, they are telling employees not to go there. you have the automakers obviously are watching the situation very closely. thailand is very much an important production hub. local demand is plunging. it is going to be a marketed that continues to be important for these companies because of
his role as an and sports hub and shipping vehicle to other parts of asia. make their cars. what impact will it have on automakers to do these night shifts in thailand? coupght, so you had to be last week that instituted a curfew overnight in a number of companies run a night shifts. all night long essentially. you did have one tonight that the companies were -- were unable to run the night shifts a you saw toyota in particular get an exception for its employees to be able to report to work and go to work. you have an exception with weeks haveh for some not been running night shifts because of the political unrest.
of it is really a matter whether or not the companies want to continue running these night shifts because as some point, that may become a decision for them to make with it plunging to the extent it is. in april. as long as demand is there but challenge, it may be a decision they have to look at making. >> how great is the risk for the industrial production being ruled out a thailand if the unrest continues? expectation among forecasters who look at production moves that australia where gm, ford, and toya are going to be out by 2016 or 20 seven team that's thailand it may be a marketed that absorb some of the lost production as 2007 that'st of --
thailand may be a market that absorb some of the lost production as they moved out of australia. it does not look as attractive a market to invest in further. that is really what the greater risk is for thailand in terms of investment. maybe not losing these plants because it will be an expense to pick up and move. not getting further investments. rudell from tokyo. modi. umbai for be live in m the challenges he will face. this is "on the move." ♪
violence. ukraine --ko said the saved ukraine and himself a second around and he has to save the country. saved ukraine aims -- ukraine andnd round and hasnd to save the country. >> [indiscernible] toill try to do my best defend the ukrainian people and bring security. has been ofe effective. the separate is that suspended the election day rolling about -- the separatists
that spent election day ruining ballot boxes is out. are readyn said they for direct negotiations. >> more stories making headlines. the sunken ferry. the company will pay $500,000. he is said to be the ultimate controller of the company. he is a billionaire that is rarely photographed and is said to lead the evangelical baptist church. said they knowmy where hundreds of kidnapped schoolgirls are being held. they will not use force to restore lives. nearly 300 girls were seized by boko haram six weeks ago. experience
international anger. modi will hold talks with his pakistani counterpart. live to mumbai. he will face challenges domestically and abroad. let's discuss the domestic challenges. can you translate to the whole of india? the challenge he faces. you are right. the economy is the challenge. he has to get the economy out of its funk. he has mentioned do a good job. -- everybody was [indiscernible] youthas been a bland of and experience. this is not idea is saying he
believes a minimum government and maximum government. in a sense he wants government to be small and effective. he has the purpose intention of women. he has gotten younger people on board. this chart collapse a few ministries. he has tried to collapse a aw ministries and combine structure that delivers results. it remains to be seen. >> [indiscernible] t defense minister. --t is a largehe are folio? large portfolio? announcement.
what you are seeing right now is speculation in the media. yes, he has been given a large portfolio. government has not made an official announcement. he is likely to have control over these ministries. the other important point is it is beginning of a new era of foreign policy. he has invited the leaders for the swearing-in. you have the leaders attending the ceremony. this in a sense will be a new beginning of talks. >> that is an amazing change. has not been to india
since 1991. halfing him there is enormous. what can we hope to achieve short-term, long-term with pakistan? isthe fact of the matter that is not a bilateral discussion. india sees this as a celebration of democracy. together.hey can come the presence and all of the heads gotten the message. will meeti and sharif in private. now, this is a symbolic meeting levy has of states. -- meeting of heads of state.
>> joining us from will buy. our top stories this morning. up on hisis giving ambitions acquisition. the drugmaker abandon efforts to byt astrazeneca -- buy astrazeneca. talks can resume later in august. astor zuma, fell one percent. suppliersle's main looking to move beyond manufacturing. they areon hai and looking to buy a stake in a phone operator. that is ahead of negotiations of a merger. they kick off expansion plans last year. sony's tv units, the losses may be coming to an end. they set it will generate its first profit in more than a decade. the top headlines.
i am mia saini. looking at the markets across asia this tuesday morning. how is the market shaping up? indonesia is close. >> we are seeing the gaming. indonesia is close. a local holiday. stocks are rising. the benchmark as to the highest level in six months. we are seeing chinese optimism factory in. the premier fueling speculation that policy will be used to help the economy and that is having an impact in shanghai right now. using the shanghai composite is up zero point one percent. that might is moved to the downside you are seeing. -- you can see the shanghai composite is up 0.1%. china resources. andre seeing abel meant commodities space -- we are
seeing a movement and commodities space. copper is moving along with no call. with nickel. 13%.up some of those declining are sun corp. major theme. south korea. it agreed to be bought. the largest mobile messaging in south korea. it is making inroads in indonesia. i want to give you a sense of how that is impacting across asia pacific. chart, lookart, pie at the industry group clovers.
you are semites moves after the oil and gas and telecom and utilities. some of the technology stocks that are moving across the region in light of this corporation deal. the bigechnology space, moves to the upside facade 27 stocks advancing star china communication services and meet attack at the top of the list. communication services and tec -- communication services and tech at the top of the list. that is an update. i gets ready for his first full day in office and some of his challenges for the new china -- indian leader. ♪
diplomat. he joins us now. first of all, let's talk about so many conflicts around asia right now. japan and china. etc. a difficult environment. what is the main challenge he must address? >> the main challenge is hard to balance india's position in the emerging world which is in conflicts on both sides of the world. out in europe, you have the and conflict. on the eastern side, the south sea conflict. india is a big part of it.
it is a big country. g-20. in terms of economy, so the modi administration has come to grips. the a media thing will be the south china sea because this is going -- he the immediate thing will be the south china sea because it will be beyond. how is india going to respond to and international support to buy vietnam, philippines, as such truck? that would be the main challenge right now. for vietnam, philippines, etc.? -- that will be the main challenge right now. it would be a quick learning process. the foreign minister has just been appointed.
she would have to come to grips with all of the problems. it will be hitting the ground running. >> do believe she is the right person for foreign minister? i have met the lady myself. very nationalist in that sense. she has to know what to the neighborhood is like and go accordingly. very encouraging to see paxton welcome -- to see pakistan welcomed. how do you view that? is engaging the power. [indiscernible]
pakistan was invited. he wants to reach out. that is a sign of a very positive attitude to take. will -- theat context. dealing with the domestic house. the surging inflation the crumbling into -- the crumbling infrastructure. priority to deal with domestic house again foreign policy? you cannot separate the ball. you have to tackle both at the same time. policy,way of domestic for example, if there is an attack on india, if you do not you will not be
able to respond. it will be a mixture of both. both have feel that to be tackled at the same time. there is no such luxury or look at domestic and then looking at foreign affairs secondly. >> thank you for joining us from mumbai discussing modi. the other story rapidly escalating. vietnam is accusing china of ramming one of its vessels and sinking it. the latest. what did we know so far? -- it is as collating tensions. let me give you a quick recap. they said at 4:00 p.m. yesterday a chinese vessel ramped -- rammed a fishing vessel.
there were 10 fishermen and they were rescued. they all close at the time of vietnamese fishing boat vessels were encircled by chinese bowls. we do know if they were shipping or evenor governmental coast guard ships. we do not know yet. we have reached out to the chinese government and their side of the story us -- has yet to come. area. were just in that how tense is it? >> it is quite tense want to get out there. it takes about a full 12 hours of both wise to get out to that area. stupid out of that area. i was struck by the sheer number
of ships and boats out there. -- it takes about a full 12 hours boat-wise to get out tho area. you busy chinese ships, may be more completely surrounding the oil rig area. filled with sy hips. that was striking. as an event means ship -- i was on a vietnamese ship for several days. try to break the chinese perimeter. anytown we got close as 10 nautical miles we were swarmed by as many as five chinese boats trying to cut us off our chase us out. the goal was to get us out. chased for the
days i was out there at sea. you can see it is quite tense. ,he crew, any time it happens they are saying they are calm but do we hereby the orders it is very heightened and stressful. dachshund but you can tell by can tell on -- but you orders they are heightened and stressful. this has not happened before. the most violent incident was in 2007 when china did fire upon a fishing vessel and killed one crew member on board. this escalates tension.
oryx welcome back. -- >> welcome back. open the doors and they will come. started looking as the domestic market in china. very good example of that. it has become overcrowded. there are a lot of hotels and big cities. i tried to book for this weekend. i go to shanghai a you have 1056 hotels coming up.
you go to a beautiful area, a tourist area. hotes --ve about 130 hotels there. you have 21. very low occupancy rates. very difficult for these big chains to increase. they have to look your business elsewhere. perhaps you can look in places like -- >> and that is the hawaii of china, right? >> you have big names already there. conrad. mandarin. if you go further up, yaoundé hilton and sheraton. the list goes on.
of the 100 hotels they plan to /3 will be tourist areas. there is one in north korea. >> north korea? >> by the north korean border. my mistake. and one in forest park. >> are they looking or have they already found? you have your papers. >> i will give you a story. i was biking. quiet meadow mountain. am, an example of how you look for the strategy. >> the part of the bike. >> i just went back.
>> not a big fan. >> david ingles. mgm. the hilton. thank you for that. on the hotels. indonesia is closed for a holiday. hong kong and shanghai, we have imports and exports. numbers from the month of april. exports, markets are slightly lower. yesterday, the u.s. was closed for memorial day. it always causes a small upsets. nikkei is the best performer today. up nearly 1%. 1%.i is down that is it for "on the move." edge."ned for "asia
>> the asian trading day. this is "asia edge." top stories. tensions soar and the south asian scene. vietnam accused china of sinking. the coup. growing protest against the military in thailand. cap malaysia airlines turn things around? >> i am angie lau. takes power in india. we will be live in delhi and
mumbai for the challenges he faces. football fans come they are counting down to the world cup. there are mounting warnings. the teams get ready to fly in. the champagne a moment. up and close personal. that is cristal. all of that and more in "asia edge." start with a dramatic escalation of tensions and the south china sea. vietnam is accusing beijing on sinking one of his ships. what do we know so far? >> we do not know a lot of details. the details we know tells a fairly clear story of what happened. let me take you through this morning. the vietnam and newspaper in the country reported