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tv   Trending Business  Bloomberg  July 26, 2015 9:00pm-11:01pm EDT

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rishaad: it is monday, i'm rishaad salamat, and this is trending business. here is a look at what we are watching. commodity crunch. copper at six-year lows. gold is under pressure again. oil declining for a fourth day. the galaxy heading for monte carlo over talks about the continuing slump in macau.
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neither seller nor price has been revealed. air asia has a bad feeling about their new budget terminal. let us know what you think of today's top stories on twitter. we have hong kong and shenzhen starting at the bottom of the hour. it is a sea of red so far. last week was the worst week for global equities and we are continuing that the climb. there is a lot of red coming through. malaysia coming online down one half percent. singapore down one quarter of a percent. the markets have been open for an hour. nikkei down 3.1%.
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a big fall coming through in commodities. there are reports that megabanks have had a slight increase in profits but we are not seeing too much movement coming through. they are mostly in the red. stocks inealth-care south korea. let's have a look at mining in australia because it has been about commodities. out of the 15 major mining players, nine of them are in the red. e often earlier loss.
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this is the fourth session in a row with asian markets in the red. china reporting industrial profits -- that should give more of an indication about the economic slowdown which will probably lead to a selloff when we come online in about a half-hour. -- copperommodities falling, gold levels not seen since 2010. data from china adding to signs of demand. aaron clark is in tokyo. for?ong can this go on fell -- oil fell last week. today, wti is trading around $48 per barrel.
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the context for all of this starts with u.s. shale producers who boosted production last year . prices today are half of what were one year ago. we have seen a recovery into the $50 per barrel range. we fell into a market driven by a couple factors -- the first is u.s. shale producers and their resilience, despite this lower price environment. they boosted the number of oil rigs last week by 21. clearly, they are getting more efficient at allocating capital even in this low-cost environment. u.s. production remains at a 30-40 year high. around 100iles million barrels above the five-year average. the second factor driving the market is opec.
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they are defending market share rather than focusing on price. some of the biggest producers like saudi arabia and iraq are producing at record levels to defend the market share especially for their largest customers like china, india, south korea, japan. the third factor is the iran nuclear deal. if sanctions are lifted, we will see more oil, to the global market as they used production and exports and they get investment into their infrastructure. all of those factors are weighing on the market right now and there is not a lot of reasons to think that oil may increase. rishaad: not many signs for optimism but good news -- thanks a lot. more on that story through the course of the program here at you can tweet us your thoughts. trade organization striking a trillion dollar deal to
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strike terrorists. i guess -- strike terrorists -- strike tariffs. reporter: the deal limits gy tarrifs. after three years of negotiations, 49 members agreed to the cuts. the wto is calling this agreement a landmark deal. the director general saying that annual trade in these products trillion,at over $1.3 accounting for 7% of total global trade which is larger than global trade in auto products or textiles. the deal is estimated to
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continue as much $190 billion to global gdp. not everybody has agreed to the deal. taiwan opposed because it omitted flat-panel displays. columbia, thailand, and turkey also declining the deal. talks have been stalled for deals with other countries accusing beijing of trying to exclude too many items from the list to protect chinese industries from competition. we now finally have a rough timeline. in september, negotiators are expected to discuss schedules tariff cuts. tech industry officials say they hope the deal will enter into force as soon as july 2016. rishaad: let's look at the other
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stories we are watching with david. first, an update on the transpacific partnership. the next few days will be crucial as this trade pact will go through. we have chief negotiators gathering for the final talks in hawaii. 31st of thethe month, hawaii plays host to trade ministers. u.s. lawmakers granted president obama more negotiating authority when it comes to deals like this. the hope is that we get a breakthrough this week. this has taken more than half a decade of negotiations. pivot toal to the u.s. asia. the countries involved make up about 40% of global -- once they
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agree on the language, a gets taken back to countries for approval. that is where we are expecting things to get more interesting. galaxy at casinos, entertainment is looking at macau to diversify and offset the sharp downturn in gambling activity. set on montees carlo, buying a 5% stake. neither the price nor the seller was named. sbm operatesid, several companies in monte carlo. than half $1ore billion last year. monaco state owns about 34% of the company. saying it wants to take a 5% stake.
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galaxy, 40shares of 7% down. it is easy to understand why this current formula of just macau is not investing investors to buy into casinos. casinos, another cross-border dealership. australiatainment and -- also far east consortium international is a property developer to build this massive hotel and casino complex in brisbane. bywill hopefully be open 2022. an analyst estimates that the cost to put up everything will u.s.out 1.5 billion dollars.
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alone will be open by 2023. they are basically tasked with bringing in highrollers from china. another story we are following, how mumbai is battling trash on a daily basis. online.look at that later in the program, prepare expectt off, when we can interest rates to go up. coming up after the break, what about commodity prices? coming up next on trending business. ♪
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rishaad: the effects of the el niño weather system are certain
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to be felt across asia. it might overtake the one in the late 1990's which was blamed for more than 20,000 deaths. let's have a look at the numbers. ♪
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rishaad: you would think with el niño halfing this affect, that we would not be seeing agricultural falloff in prices. supply-side still looks pretty good. rishaad: it doesn't according to that. guest: it mention some areas, but in the u.s., things look good. looking from the grains
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perspective, there are still ample grains so we don't have to worry in the short term. if it continues to persist, we will see more dryness developing into december and january. agricultural prices will find a bottom in the second half of the year. for the time being, it looks not that damaging and therefore still prices -- 26% in oneffee down year. guest: you also need to see it in the context of the rally we have seen recently. from that context, things look more relative. i agree, if we see extreme dryness in the southern january, thatward would be a catalyst for higher prices. guest: when you look at the global commodities in each beingdual, everything is
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marked down. it seems it is kind of like a universal sell everything. guest: i think there are many factors at work. what we need to understand. on the energy side, we have a market which is not rebalanced yet. factor.that is one on the other side, weaknesses .re attuned toward china this is a demand story developing. it will continue to be challenging. metals, ito precious has become clear that they will hike interest rates are a there are many factors at work. it is not a panic. rishaad: no panic? guest: no panic. rishaad: are you sure about that? down, been almost a draw hasn't it? it has been gradual and sustain.
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guest: it has because overall emerging economies are challenged to grow, especially -- at least the economy doesn't look great especially relating to national resources. .let's move aside quite often, especially gold, it is an inverse relationship with the dollar. we haven't seen a sustained spell of dollar strength. want us commodity weakness translate into that? guest: we have seen dollar strength -- rishaad: not quite as much as you would expect. guest: the dollar is not that much of a component. very often, if you look at it a time, it is not crucial.
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into consideration through the supply and demand fundamental. strength islar likely with us into the second half and especially given that we are still calling for at least one great hike. market prices are still very expectations and that gives room for strength yet to come and obviously that is going to -- rishaad: let's go through them. metals, upside potential? some: in china, we see form of stabilization. metals have her to go into a deficit. rishaad: gold? guest: 1050 is our short-term target. you need to take into consideration the futures market. i wouldn't be surprised if gold is stabilized for the time being.
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etf is the factor to look at. rishaad: great talking to you. yvonne: these of the stories making headlines, china has called for talks with japan over joint development of oil and gas reserves in the east china sea. agents offer comes days after tokyo releases pictures of what they say are platforms close to the line separating the two countries. china and japan agreed seven years ago to join reserves and held talks two years later but discussions -- the president of syria has admitted that after years of civil war, he is running out of soldiers. assad said the army no longer has the manpower to defend the country. on saturday, he issued an amnesty for deserters and called on people to sign up.
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rare publicare a acknowledgment that the strain of a conflict that has killed more than 200,000 people. torrential rain drenched parts of pakistan over the weekend causing flash flooding and threatening to drive up food prices. 42 deaths have been reported. thousands of people forced from their homes. 100 73,000 acres of farmland has been inundated in punjab province. downpours could continue. rishaad: next, shaky foundations, safety questions raised about quite a lump hours new airport -- kuala lumpur posh new airport terminal. ♪
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rishaad: this is trending business. we are watching kuala lumpur's international airport and unwanted headlines. isre are claims the airport sinking. they have had so many contractors working on this, airasia refused to move into the terminal because they were
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worried about safety and operational issues. they threatened to take away certain security from low-cost terminals. malaysia airports operators say shifting soil is to blame heard you can see images of the actual sinking that we have received. , puddles ofrafts water, more than puddles of water, standing water on the runway. this is a concern for passenger safety. but also for the aircraft. if the pavement is on even for example. i loan tire, debris on the runway, that could be a significant problem. are talking about pile driven and somebody had an as a result the soil patterns are an even but it is about the environment to some extent here. not alone in the fight against ever-changing weather conditions and airports. i think we had a lot of problems in bangkok when it opened. guest: baggage carousel's didn't work but beyond that the runways
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had issue with the pavement. the level of swampland at that airport is built on continues to have issues today. in jakarta, the runway was too old. the pavement could not withstand the weight of the heaviest aircraft. consequently, indonesia could not fly 777s to london because they couldn't get off the ground. kansei airport had the same problems. rishaad: on the way, we go back pushing boardroom, ahead with a key shareholder meeting. markets have opened in hong kong and shanghai. hong kong finishing its premarket session down. ♪
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rishaad: looking at top stories, asian stock losses go into their fourth day. hedge funds taking short positions on gold for the first time. expectations going that the fed will raise rates in this year, making other assets more profitable. the slowing economy accused of helping drag down the rage of commodities. on al to lift tariffs range of products, including
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semi conductors, medical products, and gps systems estimated at $1.3 trillion per year. the start date should be july 1 next year. a passenger terminal airport in: a lump or is sinking according to -- they have done partial resurfacing but must find a new solution. pools of water are caused by anderential soil settlement the transport ministry continues its investigation. looking at the market opening in hong kong, shanghai, and elsewhere with hong kong premarket down by 9/10 of 1%. reporter: selloffs continuing and a show up. chinese markets coming online. worst weekty was the in global equity this year.
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asian stocks low for a fourth session. hong kong also coming online, down 4.2%. buyay announced it will -- for one billion -- we are seeing continued weakness coming through in china. elsewhere, health care stocks in south korea down 0.5%. nikkei down three quarters of a percent. x200 pretty flat in australia. i wanted to look at movers in japan and australia, particularly the miners. players andold australia doing incredibly well
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today. they have met expectations. newcrest also doing well. investigators -- investors are buying in. unchanged. let's have a quick look at the banks and japan, they are under pressure despite reports that are actuallys going to announce a mix of profits. unfortunately, we are seeing weakness coming through in the banking sectors. it is looking like it is going to be a negative start to the trading weight particularly as we look at that fall once again coming through in china really leading the decline. back to our top stories, gold under pressure, drop are dropping to six-year lows. chinese metal demands falling.
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it -- can china absorbed some of the excess there in the market? guest: that depends on your time horizon. ofna is building up a lot petroleum. when oil prices are low, china is piling on -- >> this is relatively new? done since has been 2009. he completed the first phase in 2000 10. right now, estimates or between 30%. eight is 100%it of net imports, that could create another 40% of growth in crude conception. in the near term, china ittinues the upside when tries to store some of this crude. the low price and environment
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demand for oil products such as diesel, striving kerosene and gasoline demands. one-two years, you will see demand from china. over the longer term, this should not -- rishaad: buck and expect in the second half of this year? even looking as far as head guest: medium term next year. one of the surprises you could see is actually the iran. the market has not completely priced in the iran will rishaad: -- rishaad: guest: because it is not a done deal -- so it the end of the year you could potentially see prices from two fronts -- one is the a ron deal. exactly happening in a november december creating some surprises for the crude market. rishaad: thank you very much, indeed. you can get more on that story on the bloomberg app.
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now to the battle for the boardroom at a chinese cement -- pushing ahead with the shareholder meeting which may determine which rival stakeholders -- where are we with this? tell us what is going on. guest: it is a complicated rishaad: --rishaad: i knew it would be. consolidations are why companies are trying to take control of each other to prevent -- shanshui happened in april. to become the biggest shareholder in the company and right after that, they were like, ok, let's call egm so that it can take control and in order from takinghanshui control, other shareholders,
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asia cement and china national building material said, we are going to propose a general offer to counter offer tianrui's offer and so there is also a fourth shareholder -- >> it gets more complicated -- >> exactly, there is a fourth shareholder which holds a lot of shares from employees. they wanted to team up with tianrui because the court ruled against that. yes, you are right, there is a side story which is the hui'srence betweentians employees and the founding family -- so employees are ourng, hey, you missed used shares, you are not paying this evidence, that is why a lot of those shares are now in receivership which cannot load. rishaad: looking at this, what if a look at? guest: by the end of the day, they want to know who is going to get control -- >> they want kind of some
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visibility -- >> yes, they want to know whether they are actually going to propose a general law for whether this is going to go through and whether they are going to give up on the whole ui,empt to take over shansh if the offer go through, that will be positive for shareholders because those two shareholders are much stronger. rishaad: thank you very much, indeed. , lesko you up-to-date with some of the other stories. second-quarter profits up for dbs. yourtic rates posted seven eyes allowing singapore lenders to increase -- the back still facing weaker loan growth this year that is because the singaporean economy is contracting. the asian white slowdown has --
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slowdown hase china to blame for that. about 300,000 pickups as part of a deal with u.s. regulators onvia call recalls, $105 million for delays in what is the largest penalties ever imposed by the agency. it tops hondas find last year. fine last year. documents filed by the company show the a litany of problems. no plans to reduce production in china despite slowing sales, volkswagen responded after it was said that the company was considering cutting hours that is chinese operations. in june, passenger vehicle sales fell for the first time in more than two years as the stock -- it ist buys off
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time for shipbuilders -- just one group to feel the pain of cheap oil, they turned to offshore oil rigs about five years ago in what turned out to be a dad that. michael arnold is right here with me at the moment. tough market. tough crowd, isn't it? indeed. these guys made a bit of a strategic fumble. you can see that with the benefit of hindsight, actually. guest: if you look at the aftermath of the financial crisis, you have oil rising to $100 per barrel and shipping rates low. a lot of ships. these companies decided the thing to do is to get into offshore race, leaving key shifts to the chinese shipyards and build rigs but it turned out to be more difficult than they thought heard it took a lot more expecteduild than the so what has happened is they have a real cash crunch. rishaad: what we looking at in the earnings for some of these companies iago guest: samsung heavy coming out this week -- earnings probably will not be good at all. -- according to local
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media, then in august you have daerwood which could show -- daewood showing losses. it will be a challenging environment for this quarter. rishaad: what do you see? how is is going to pan out? guest: the good thing is that they still have a niche. they are still the best at making these high and ships. they can leave the sheep are -- cheaper ships to the chinese ship yard. they, for example, say they will restructure the company -- you know -- talking about relocating employees and selling off some assets. i think down the line -- [indiscernible] falling quitebeen a bit. i think we have to ask ourselves down the line are we going to be looking at a big to rather than a big three, meaning, are we going to see consolidation in the industry? rishaad: thank you very much, indeed great up next, the fed meeting this weekend of september rate rising looking
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increasingly likely -- a look at what to expect in coming days. trending business ♪. ♪
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shery: talks on a greek bailout has been delayed. the so-called troika is due to fly to athens over the weekend. sources say they will start on tuesday. capital controls are still in forest and stock market remains closed. an agreement must be made by august 20 when greece owes the ecb. praisedt obama has africa's dynamism but has warned leaders to tackle corruption, tribalism, discrimination. the president stressed the
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opportunities available all through private enterprise and saluted kenya's status as a technology hub. the economy grew 5.3% last year. nasa has released an animated flyby of pluto. flowseals enormous ice and temperatures as low as -229 degrees celsius. scientists think it is similar to earth. stories welook at are watching in this part of the world. makings prime minister his first visit to china on discuss saying he will
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investment in a chinese missile system. more than $2 billion have been wiped from maggi's share price. electronics will report second order profit earnings on thursday. on friday, the international olympic committee's executive board is in kuala lumpur to decide the location of the 2022 winter games. says it will not be an easy decision. more on the week ahead.
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us,k you for joining daniel. what will be your most watched action this week? will it be the fed meeting? fed meetingink the is the one that everyone is looking at. uneventful quiet and meeting. anybody expecting hints will probably be disappointed. the fed stressed they want to make every decision based on data. the meeting might mention inflation but no further hands. inthink the hike will be september because the economy is looking quite strong. the labor market has gotten stronger over the last couple years.
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they might want to lay a rate hike because of that -- but that concern has faded. rishaad: people are saying september or december. the view of september seems to have hardened. is that because december would seem a bit like scrooge behavior? daniel: janet yellen made comments saying she wants the fed to hike this year. if they don't do it early, the hikes next year may have to be more aggressive. we think september will be the left off. figures out from the state. they could also be vital. daniel: they should. a the first quarter, we had big disappointment.
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the economy contracted by 0.2%. a lot of that is thought to be down to whether-related issues. we are looking at 2.8% annual growth. the complicating thing for this meeting is that the government will be revising its numbers going back for a number of quarters. thatll chart to reduce seasonal disappointment. 1 might have turned out to be a lot better than previously thought. that 2.8 number might be a little bit lower. the point is the u.s. economy is doing pretty well. .let's move to pmi
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is that number likely to be replicated at the end of the week? that doesn't take into account small sme's. hadly because the data we has been negated by sentiment? daniel: it won't show that big of a drop. one has expectations being anchored -- that is more heavily weighted to the large firms, the ones that will have maybe benefited from the policy measures that the chinese government has rolled out. i don't think we should read too much into one pmi. we have a china activity proxy-based on lots of unofficial, unusual data.
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the real estate market, freight activity. that was seen as an improvement in the chinese economy because of all of this policy being pulled out. with all of those indicators suggesting that things are on the up, we are reluctant to say just because of one number the chinese economy has risen. we think they will be on target. rishaad: even with your data? daniel: that is the interesting thing. growth is at least a percentage point lower than what the chinese government is saying. it has still picked up in recent
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quarters. uptick.d see some the reality is that growth is lower in china than most people think. rishaad: great talking to you. next, a look at how sony's latest movie got past sensors in china. ♪
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rishaad: we are looking at what is trending on social media. it was a fairly eventful weekend. i am watching linkedin. they were on the receiving end of a barrage of complaints. previously had a tool to
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download your contact list easily. they removed that function and replaced it with something that took longer than expected, up to 72 hours. they backtracked and said, here we go -- a lot of these complaints -- one user tweeting that you want to download your contact list, better counsel those weekend plans. another user commenting that linkedin makes you wait three days to download your contacts. people are not happy. saying reinstating this, while they work on a fixed -- shery: i hate it when platforms make sudden changes in a have to adapt completely. david: we don't like change. shery: i am watching sony e-mails that were hacked.
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deletedearing that sony e-mails involving pixels. there was one scene where there was supposed to be -- in the original script -- were aliens blast a hole in the great wall. sony executives decided it was not safe to include that, that there were no guarantees with china. so they decided to pull that and drop that scene. those -- there- you go. then senior vice president saying that china is too unstable to count on 100%, although the representative was saying that in a global context when you have aliens blasting the tosh mahal, the washington monument, it should be ok, but they decided to drop it. david: just to be safe.
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that is what we are watching across social media. wto nationsing up, deal.ating a tariff ♪ ♪
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(ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...)
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man snoring (don't fear my darling...) (the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store. rishaad: it's monday, july 27. this is "trending business." i'm in tokyo, sydney, and mumbai at this hour. we are down by a dollar and a falloff in commodities. the green light -- china railway is on track to be the first major listing in the city since
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$4 trillion was wiped away. that sinking feeling -- late and over budget. budget terminal is air asia's as something must be done. let us know what you think of our stop stories -- of our top stories. follow me on twitter. having a look at these markets in shanghai, here is juliette. juliette: it is all about this slide in commodity prices, and we are seeing oil, gold, and basic materials weaken across the region. in china, the oil and gas sector is down 2%. the shanghai composite is down by 1.2%. industrial profits came through, down .3%. more of a clue that
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these economic slowdowns have been deepening the commodity route. and hang seng, the index is down. a lot of weakness coming through from those oil and gold players. south korea is being weighed down today, down by .5%. the nikkei is off by .5%. a pretty flat day in australia. just want to look at some of the major movers in the region today. an announcement that it is going to buy development for $1.5 billion. gome is falling, and in australia, a good quarterly report. carrying on with that story -- the commodities are out and we are seeing copper fall,
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gold at levels not seen since 2010. week manufacturing data is part partially responsible. aaron in tokyo. lots of theories as to why this is happening -- what are you hearing? aron: oil fell into a barrel market. fell moreenchmark than 20% over the last six weeks. wti is trading at about the eight dollars per barrel. this startsfor all with shale producers, who boosted production late last year. oil production is about half of what it was a year ago. in march, wti phil to a six-year low. since then we have seen a slight recovery, until we hit the most recent bear market late last week. there are three primary factors
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driving business. the first is u.s. shale producers -- they are getting more efficient. rigsboosted the number of drilling for oil last week by 21%. remains here the highest in 30 or 40 years, and that hasn't really changed despite this low-price environment. u.s. supplies are about 100 million barrels above. the second factor is opec. we saw them shift their strategy from focusing on prices to defending market share, leaving members like saudi arabia and iraq producing record levels to maintain their customers, especially big customers in asia like china, japan, south korea, and india. is the nuclearr deal with iran. if sections are lifted, they have been explicit about plans to boost production of oil.
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even if that doesn't hit the year, until late next that is really a factor that is weighing on prices. fell to theitions lowest in two years. there is a lot of bearish sentiment. there is not a lot of evidence that would indicate oil prices will rise in the short-term. rishaad: thank you very much. we will have more details throughout the program. with hashtag #trendingbusiness. nextl could be in place by bringing in i.t. agreement into the 21st century. didn'tprevious agreement cover products that became popular after 1997, so after
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three years of negotiation, wto members agreed to eliminate technology products. the wto is calling this agreement a landmark. annualeral says that trade in these products is valued at over $1.3 trillion and accounts for 7% of total global trade today. this would be larger than global trade in auto products, clothing, iron combined. this is expected to contribute as much as $190 billion to global gdp. not everyone has agreed to the deal. taiwan opposed product list because it doesn't include flat-panel displays which is an important part of its domestic export. these talks had long been stalled with other countries
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accusing the regime of trying to exclude too many items from the west for tariff cuts to protect chinese industries. still, we finally have a tentative timeline. in september, negotiators are scheduled to discuss the timeline for tariff cuts, and they have a goal of concluding a final agreement by the ministerial conference in december, to be held in kenya -- nairobi. they are saying that the deal could enter as soon as july next year. rishaad: thanks. to some of attention the other stories making headlines thus far today. here's david. david: first up, let me get the update on the trade block. there is a bilateral trade agreement. the next few days are going to be fairly crucial.
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negotiators will began to ring the final leg of the talk in hawaii. for tomorrow through the end of the month, they are hosting the trade ministers. the hope is that we get a breakthrough this week. that has taken more than half a decade of negotiation and political bolstering. for the u.s. it is a vital deal. involved -- they make up about 40% of global output. china is not included. one they do agree on the language, it gets taken back in its entirety to each of the countries for approval. back here in asia, we are -- we are still very near a 15 year high. the bank released second-quarter results this morning. up 16%. a little bit higher than estimates.
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million,e is at $860 roughly ¥1.1 billion. its fee-based businesses -- just a break that down, you're looking at that interest margins improving to 1.75%. that is the spread. 12% improvement in the actual income. when you take a look at fees, that business was at 16%, under $600 million since the first big three banks reported. galaxy entertainment is taking a step to diversify its business.
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it has set its sights on europe, monte carlo. n sbm.uilt out a stake i it owns and operates several properties in monaco. than half are billion dollars. monaco owns 34% of the company, and in a separate says ition, the lvmh wants a 5% stake. have a look at as shares. .own 50% casino revenue fell to a four-year low in june, and the outlook is it any better. rishaad: later on in the program, feeling the heat.
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we take a look at the effects of el niño and its impact on commodities. dge funds. fun that and more when "trending business" returns. ♪
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-- the yenis is seems to be stuck in the third. to thelooking ahead federal reserve meeting -- all of that could change. a quick snapshot. a weekend with the commodities slump. these commodities are related, equities being that much weaker these days. let's start things off with that, because the go to sean
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callow. ean, there was a line in the sand -- is it only down now, and how much further? certainly that is where the risks lie in the short-term, but we have been talking about 72, 73 for a while. been a sudden and disappointing section of commodities. the global commodity index is at its lowest since 2002. 70, 72talking about areas in the next few weeks. the big picture -- we haven't changed our view on the rba. cuts.pricing at 75% for a it couldomes through,
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avoid a sharp breakthrough below 70 and it may well stabilize in the coming weeks. rishaad: that's the thing, isn't it? 1.11, peopleup to are saying that's overshot. you quite often overshoot on the way down, don't you? would you be prepared for an even weaker aussie dollar? sean: yes, that is certainly the danger. if they are overshooting it can go in either direction. think their value at the moment is 73, 75. if we make a run at 70 or lower, it is well within the bounds of undershooting are overshooting we have seen in recent years. been -- wed it has have seen the pummeling the kiwis had. sean: yes, yes. not just australia.
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put it was falling steeply the focus was on australia, and earlier this year, we have the aussie-kiwi close to parity. since then, prices were under great pressure and economists in auckland are seeing it dip below four dollars. it certainly risks the downside in the rate cutting phase. canada, it has been consistent in terms of oil, having a more persistent impact on the bank of canada. they said it was an insurance policy but we never really believed in. we think the canadian economy will be under pressure until further notice. and background to all this is the dollar and the gradual strength.
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not only do we have this fed aeting where it seems like september rate rise is heartening. -- hardening. we also have the inverse relationship with the commodities complex. sean: yes, it does all feed into one another. encouraging for the selling. the fed itself -- we have been on the september rate hike for quite some time and we would expect some language tweaks at this week's meeting to indicate that we are open forced temper. but it's not really there yet -- it is one central source of support for the u.s. dollar. thinks most of us have to it's surprising, that the u.s. dollar hasn't benefited more already, particularly against the euro and the yen. the euro was on the
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back burner, isn't it? sean: yes, not a lot of focus their. -- focus there. but it is also the backdrop for the euro. the eurozone is running quite substantial currencies, driven by germany's huge trade surplus. that does provide some insurance for the euro, particularly in the white northern market. rishaad: great talking to you. sean callow. >> time now for a check of stories making headlines -- the third greek bailout has been delayed with officials still arguing about the format of the discussion. do thiska has been weekend for meetings on monday, but sources say they will start on tuesday.
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capital controls are still enforced and the stock market remains closed. any new agreement must be in place by august 20 when greece owes the ecb tree $.3 billion. 3.3 billion dollars. the president of syria is running out of soldiers. in his first televised address, he said that the army no longer has the manpower to defend the entire country. issued any, he amnesty for deserters and called on people to sign up. the army is collapsing but his remarks are a rare public acknowledgment of the strain of the conflict that has killed more than 200,000 people. called for talks with japan over the joint development of oil and gas reserves in the east china sea. offer comes days after tokyo released pictures of what it says are platforms close to the median line separating the two countries'maritime interests. they agreed seven years ago to jointly develop reserves.
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discussions broke down amid a dispute over islands in the east china sea. rishaad:, missing pixels. edited its comedy blockbuster to get free air in china. "trending business" is back in a couple minutes. ♪
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rishaad: the effects of el niño
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has been felt across asia, and some scientists say it will get stronger. it may be as bad as the one in the late 1990's, blamed for 20,000 deaths and $30 billion in property damage. what have a look at the numbers. -- let's have a look at the numbers. ♪
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rishaad: david and shery are having a look at social media. david: it was a fairly eventful weekend if you were a hard-core linkedin fan. linkedin can help you build your contacts. they used to have this tool -- it is that now -- where you could download or export your contact list. then they quietly took it away
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and faced a barrage of complaints -- finally they came out and said, ok, we're sorry, here it is. -- we listened to members and we turned our csv export tool back on. we will continue to find ways to keep members safe. since that changed, we have heard loud and clear that it is too long to have to wait. effective immediately, we have turned it back on. that'se work on this -- it, yeah. shery: i am looking at these
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sony pictures -- they just released a movie, "pixels," starring adam sandler, and the ecript included one scen where aliens blasted a hole in the great wall. but they decided to drop it because it could be too sensitive for china. seti executives went back and forth through e-mails, and now --are seeing that although they say it's ok. in the context of a global scale invasion, it should be ok, but the vice president saying there are no guarantees of china. of course, people have been talking about this. this is the e-mail that china said saying it was ok because the taj mahal was blown up. the great wall should be fine, but they decided to delete that scene. people have been talking about this, saying that the west is afraid of china.
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you know what? maybe that was included in the first place to appeal to the chinese market, because it puts china in the map. -- on the map. the thinking was that genghis khan -- [laughter] david: don't forget, if you want to stay in touch with us, we are on twitter. thanks. the world's biggest train signals company gets the green light to go public. whenls, coming up "trending business" continues right after this break. ♪
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rishaad: asian equities extending losses into a fourth day as the global selloff and commodities deepens. expectations growing that the fed will be raising rates this year. new data showing chinese industrial profits fell 0.3% in june, the latest signs of a slowdown. wtooup of nearly 50 countries have sealed a deal to lift tariffs on a range of products.
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it covers items including semiconductors and gps systems. it is worth an estimated $1.3 trillion a year. this should be july next year. 15%ing estimates, profit up , down to higher interest and fees. singaporean lenders increase charges to borrowers. economy contracts amid an asia-wide slowdown. we are just getting the tokyo shutout for the morning session. a sea of red. >> it certainly is. we are seeing quite a lot of weakness. asian markets down for the fourth session in a row following that route in global equities last week. the shanghai composite in china
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currently down by 0.8%. you mentioned that industrial companies profit falling. it is likely to put further pressure on the big fall that we have coming through in commodities. it is the oil and gas stocks, the material stocks, all not doing well around the region, down by about 2% in china and 1.5% in hong kong. japan going into the lunch break a little weaker. we are seeing some sensitivity from gold stocks today despite that weaker gold price in australia, which is helping the a sx. let's have a quick look at the major movers in hong kong. 8.9%, announcing that it is going to buy -- going to buy outright development. hong kong exchanges currently
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having its biggest fall since july 8 due to a big call coming through from its turnover. to our toptting back stories, the continuing route in commodities. let's bring in our analysts. of've been visiting a lot metal smelters, metal factories. what are you getting from this? >> i was in china last week, and what i found was, on it the price file of commodities, i'm seeing a performance divergence between producers and small-scale producers. rishaad: do they see a slump themselves? >> yes. if we look at their margins, the large-scale producers have shrinking margins. this time, they are not only making net losses. they are losing at the cash level. that is part of the reason china
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implemented strict environmental protection policies. the result of that is, we expect industry reshuffle might happen. small-scale producers may be driven out of the market so that large producers could increase market share. rishaad: tell me something. are there any recoveries? someone was suggesting that things are going up a little bit. do they see any light at the end of the tunnel? >> not yet. for the demand part, the producers i talked to are still seeing demand week. because in china, though normal way for the demand implement is that government increases spending. even though the government increased investment spending, local governments did not match that investment target and amount. rishaad: the oil market is also suffering to some extent.
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oil imports were up something like 17% in june. >> really, the strong import was driven by china building strategic petroleum resources. rishaad: this is actually not usage, but storage? >> right. longer-term demand looks a little bit depressed given that china is approaching this new normal. if you look at the metal space, a lot of them are big users of diesel. rishaad: this is interrelated. >> of course. users of oil and china are cold, cement, and steel. the longer-term outlook is coming down. rishaad: so the import cost for these metal producers -- the margins must be just a little bit healthier if it weren't for the cutthroat competition. >> actually, we've seen the cost improvement for those producers because of the jobs. rishaad: and basic imports also
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down. what are people telling you about what they are looking for in the second half? >> a lot of it will come from surprises. for this year, so far, we have seen a lot of supply issues being priced in. for instance, u.s. production has slowed. it is still quite resilient, but it has slowed. capex is falling. people look at what it stands on. iran is coming into the picture. towards the end of the year, we are going to see whether they can fulfill what people are wanting them to do on nuclear issues. iran, you aren also going to see the opec meetings. rishaad: that is crucial. what about these metals guys?
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are they looking at some sort of improvement? in terms of the prices, someone was saying that base metals is where he's least bearish, but he's still bearish, i suppose. >> i would say the cost for the metals, the basic elements are supply and demand. if you look at supply, the supply is for steel to increase, and the demand. so far, we have not seen a recovery for demand from china yet. in that sense, metal prices may stay pressured. rishaad: thank you very much indeed. let's have a look at some of the other stories we are watching for you. the financial times, it is selling the economist. the magazine wasn't included in the sale to the nikkei group. it appears it is disposing of its holdings to continue its transformation into an education company. $620 valued at about
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million. pearson's stake in the book publisher penguin random house may also be up for sale. real madrid is the latest football club hoping to raise its game in asia. it is opening a store on alibaba selling club merchandise including official uniforms and memory billion. it is the first deal of its kind and gives real madrid to 600 million alibaba customers. thai airways is adjusting its flight schedule to cut costs. rome and losap angeles, but double services to london and frankfurt. it is also planning to transfer some short-haul operations to its budget brand. the company says the changes will be reviewed once it regains competitiveness. kuala lumpur international airport's new budget terminal is earning more unwanted headlines.
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delivered late and way over budget, there are claims that it is sinking. zeb has been digging into this one for us. zeb: sinking airports, a big concern for the safety of passengers and those operating the aircraft. the klia-2, the replacement for the low-cost terminal, air asia the biggest customer. now air asia and others are concerned that the terminal itself as well as the taxiways and perhaps the runway are dealing with soil sinking. malaysia airports called it just that. they say about our working to combat the problem. look at these pictures. they show standing water. of course a concern for crew as well as as anders, and a concern for pilots as they try to navigate around the airport, follow directional paintings and placards on the runway.
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this is something air asia has pointed out to the airport authority and they want faster action. risk runway cracks pose a to aircraft. they could puncture a tire. they could cause debris to fly into an engine or fuel tank. no one has suggested that that is a key risk, but that is something safety experts are looking at closely. klia-2 was a billion-dollar project. it was $500 million over budget. it opened late and air asia itself said it would not enter the new terminal until security issues and operational issues were worked out. still work to be done. it is impressive architecturally, but not living up to the expectations of airlines that are paying to use it. rishaad: the other airlines, or airports, which aren't living up to airlines' expectations, bangkok for one and one in japan as well. zeb: that's right.
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it is hard to find a perfect spot for an airport. you need lots of land and the right kind of land. klia is within palm plantations. en bangkok, they used ra claimed swampland. there were issues with cracks in the pavement. runways were shut down for months at a time. ,n jakarta, the aging runway simply too much traffic. it couldn't handle the weight of the newest aircraft. that prevented indonesia from flying all the way to london. airport, even con sigh builtsai airport, it is on a landfill. every airport has its problems. rishaad: thanks. we are going to go from planes to trains. the world biggest trains control systems provider going public
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and hoping to raise $1.8 billion. let's bring in ben. who is interested in buying this company? ben: we will find out. this is going to be the first big test of investor sentiment. rishaad: they are banned from shanghai, are they not? find out whether they will take the risk and buy into this. rishaad: the stock is pretty volatile. is it wise when people are raising eyebrows about this one? halfthey've sold more than the stock to cornerstone investors already. rishaad: that old trick. ben: they agreed to buy the stock. they only have to sell about half the deal. rishaad: tell us about the company. tell us about the future they are planning. ben: it is the biggest maker of rail traffic control systems. they have almost no business outside of china. nearly 95% of their business is
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domestic. some of the proceeds from the ipo are going to be used to develop new products and possibly do some acquisitions overseas. rishaad: thank you very much indeed. cent on this possible ipo. next, pass or fail. are having a tough time convincing critics that the tpp will boost growth. you are watching "trending business." ♪
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shery: welcome back. torrential rains drenched parts of pakistan, causing flash flooding and threatening to drive up food prices. at least 42 deaths have been reported since the messiah own -- since the monsoon began. 173,000 acres of farmland have
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been inundated. forecasters say the downpours could continue through most of this week. president obama praised africa's growing economic dynamism but warned leaders to tackle corruption, tribalism, and discrimination. the president stressed the opportunities available through private enterprise. yearconomy grew 5.3% last and the imf expects that to improve to 6.9% this year. nasa has released an animated flightpath of pluto gathered by the new horizon spacecraft this month. it reveals enormous ice slopes and temperatures as much as -229 degrees celsius. scientists think it is geologically soft enough to move like glaciers. a look atet's have
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what we are watching for you in this part of the world. we've got the turkish prime visiter making his first to china on tuesday. erdogan saying -- [indiscernible] eadlyons have led to does clashes. nestle india out with quarterly earnings wednesday after that controversy over safety, recalling a product in may after authorities found excessive levels of lead. more than $2 billion have been wiped off its shares. we will get a better picture when samsung electronics reports earnings thursday. the company warning that supplies for its handsets may see a mess. also feeling the effects of that mers outbreak. friday, the executive board meeting in kuala lumpur to
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decide which city will host the 2022 winter games. the president said it won't be an easy decision. also this week, trade ministers from 12 pacific countries are gathering in hawaii to agree on the tpp. it aims to create a broad pact accounting for 40% of the world's trade. it is attracting plenty of criticism, as paul allen explains. paul: the setting looks idyllic. the negotiations probably won't be. after five long years, the united states hopes a breakthrough will come this week in hawaii. representative michael froman says the countries involved are keenly focused on reaching an agreement. the tpp is a crucial part of the u.s. pivot to asia, a broad trade deal accounting for 40% of the world's economic output.
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the deal does not include china. >> it is going to open markets that currently are not only open to u.s. business. pointshere are sticking which have been causing concern for a long time. the united states is pressuring japan to open up its heavily protected agriculture market. the u.s. has long protected its auto industry with tariffs. public opposition to the tpp is rooted mainly indeed suspicion. the whole deal is being done in secret. one leaked chapters suggested pharmaceutical payments may be lengthened. for the public, that means a longer wait. copyright provisions are likely to be titans. details on that were secret too. defenders say the text isn't available because nothing has been agreed yet. once the text is settled, it will be presented to each of the 12 countries. it is at that moment public
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opposition is likely to reach its peak. paul allen, bloomberg. rishaad: up next, the slump in giving big returns to india's biggest oil refiner. we will be live in mumbai to drill into the numbers. ♪
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withad: you are back "trending business." i am rishaad salamat. alliance industries trading kicks off in india after a plunge in oil helped it hit a seven-year high. we are in mumbai for the details. good morning to you. >> good morning, rish. earnings season has been very mixed. in alliance coming
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industries. the numbers came in on friday, much in line with what industries were watching for. margins were one of the key factors that helped it get those record numbers, coming in at six-year highs. that is on a year on year basis. we are seeing robust demand growth and low energy cost. that is something we just talked about. the telecom business, we heard commentary on that during the company's meeting in june. that seems to have called investors nerves. the refining business is being seen as strong. it is also encouraging that organized retail has been delivering consistently. the last quarter was no different. critical from the
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non-oil side of the business. what about future prospects? strongwo really quarters, the momentum is likely to slow. margins will start declining. there are no signs of improvement as far as the fortunes of oil and gas growth. margins are depending on the telecom launch. the company said it is going to launch in december. there will be relief if telecoms turns out better than expected. that will take a bit of time to unfold. rishaad: thanks very much. let's get a reminder of what is out there trending so far today. strange movie clips. strange or deleted movie clips. we are talking about -- i will get to this in a moment. let me start with this
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retraction at linkedin. there used to be a tool to basically export your contacts fairly easily. this was required to be removed. it led to a barrage of complaints, one of which you are looking at on your screen. it actually took a lot longer than they had initially expected. 72 hours. let me get you the statement from the company itself. since that change, we've heard you loud and clear. effective immediately, we have turned it back on. just as a confirmation here, one user saying on twitter, i've tried it, and it downloaded immediately. there we go.
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now back to this movie here. let's take a look at this one. we are taking a look at sony here. apparently, not including this scene, or not considering to put the scene in, wherein they would hole through the great wall of china. i'm looking forward to seeing this. at one of a look these comments on twitter now. one of these users basically saying it should be ok. you can blow up the taj mahal. you can blow up a lot of these global landmarks. why can't we do it? to appeal to the china market? speaking, in a lot of
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these production houses, they sort of have to thread a very thin line of appealing to the chinese audience and not offending chinese authorities. back to you. rishaad: "asia edge" is next. ♪
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rishaad: 11:00 in the morning here in hong kong, 11:00 at night in new york. we are live in hong kong. this is "asia edge." a look at our top stories. sliding stocks. hong kong leading a wider regional benchmark down. oil falling for a fourth consecutive day. gold trading at 2010 levels. copper at a six-year low.
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the world's biggest rail signaling company getting the green light for the first major ipo since the mainland stock route. yvonne: also coming up this hour, that sinking feeling. delivered late and over budget, kuala lumpur's new terminal is now plagued by standing water and cracking taxiways. 49 countries agree to eliminate tariffs that generate more than $1 trillion in trade. plus, a losing bet. why korean shipbuilders are regretting their decision to go big on rigs. all that and more on this monday edition of "asia edge." asian stocks are lower. that selloff and commodities from oil to grains continues. let's have a quick look at the oil price. it has had a rebound today. it did spike a little higher. currently, the gold price


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