tv With All Due Respect Bloomberg August 24, 2015 11:00pm-11:31pm EDT
oil is still weak. prices are near their lowest since 2009. flashing the cash. china pours the most into the system since january of last year, in the latest attempt to prop up the yuan. later this hour, doctors orders. the r.b.i. government warns investors not to expect handouts. our top story is what is happening across financial markets. david in place tracking this -- david inglis tracking this. markets openedse a little bit low. perhaps those losses were a little bit to steve. -- theuations came valuations overnight became much more attractive. we are seeing gains of at least
1% for both of these -- for most of these markets across the region. bond deals, where are we? moving back down. some of these measures that we look at, you look at the nikkei and we hung saying. hang seng. hung sayin we started the day at about $1.18. that of course is on the lunch break. onures -- a horrible session monday. 2%.we are north of look at about 1900. a few things i want to mention
here. we are down 4.5%. still very much under pressure. still talking roughly 80% to 85% still in the red. the central bank called into action this morning to offset those impacts. money markets raced. they did show a bit of strain. -- i will show you the seven day. we go. we even had a one-month high. tryingviously reflecting to offset that. before i go here, deposit rate. marketshore yuan
hitting 22% this morning. i will leave it there for now. the resource sector has been hit hard with the bloomberg commodities index hitting its lowest close since 1999. let's get over to paul allen in sydney. some areas are actually faring better than expected? paul: that's right. if monday was all about the black clouds and tuesday six to be very much about the silver lining. if we take a look at the big australian iron more -- australian iron ore miners, all in the green this morning. bhp resorting -- bhp reporting results this afternoon. this is going on despite an ongoing weakness in iron ore and an ever-growing pile of imports in china.
-- pile of it in ports in the china. output is exceeding demand. -- west texas below $40 a barrel. producers are raising supply. even the gold place -- the gold price remains weak. behind all this is china, the biggest consumer of grains. investors still continuing to sell the commodities. the bleak days for commodities are not behind us just yet even though we are getting a balance in australia this morning. angie: what kind of balance is the question. thank you very much for that. the people's bank of china stepped up to the plate this morning, injecting the most funds into the system since january of last year. repo again.
is this good enough? d: adding into the financial system after they have been defending the yuan after the repainting a couple of weeks ago -- after the re-pegging. basically adding the most funds on the open market since january of 2014. u.s.int -- 24 billion dollars. nevermind. billionon top of a 120 that was maturing today in reverse repos. a net injection about 40 billion yuan. some told us that it was smaller than expected. the pboc option about 60 billion on behalf of the ministry of finance at 3%. angie: markets is still waiting
for other signals. world yes, because the reacted looking for signals from china. some people said you started this. interestingly, we haven't been hearing much from the authorities. they have been intervening into the stock market or at least allegedly intervening in the stock market if it had gone past 3500. especially yesterday, they allowed to fall precipitously. we also heard from traders to not intervene to prop up the yuan, or at least not heavily. thepreciating yesterday most since that second day of evaluation a couple of weeks ago. this is a central bank that has the tools and leverage to do something. it has $3.9 trillion of reserves. its benchmark one-year lending rate, the envy of the world at
4.85% when developed nations are near zero. the $3.9 trillion figure -- stephen engle, thank you very much. talking about the roller coaster ride in the markets with our guests all morning. arching asia economist explains how it all started. >> the speed of the slowdown is much faster than people expected. faster than the chinese gdp data indicated. i think that now people realize that the reality is that chinese investment has already slowed down. that is, i think, the one major reason behind this global concern on chinese growth.
the world is waiting to see whether the chinese central bank will take action. one analyst we spoke to said the pbo -- said the pboc alone would not be enough. -- a lot ofhina people are looking at china and pboc to be the leader in this effort. i think that people are disappointed that pboc did not cut the rrr rate over the weekend and this could indicate a weakness in the chinese market . at this moment, i think given the intensity of the stock market route, i think a triple cutcut is instant -- a rrr is insufficient. oil has reversed his declines but is still there six-year lows. alliance security says the worst is not over.
that structural collapse in the oil market is going to remain and as a result of that, i think you might say it could even hit lower and heads down to the december 2008 low. angie: that is a word on the markets. a quick check on the morning'sw other main stories. analysts are expecting underlying profit to fall by nearly 50% because of the commodities rout. producers raise supply. has fallen byia nearly 70% in shares this year. we will be speaking to their chief executive, and mackenzie, this evening on bloomberg at 9:30 p.m. hong kong -- singapore time. they will suspend production of the previous in thailand reportedly based on lower sales
and a dispute with local authorities. they are recovering after theirday's report that plan to china will remain closed for two weeks after the deadly blast. if you still have some spare change, maybe called uber. they are looking to raise at least $100 million in china according to an offer sheet. inestors willing to put $470,000 could see returns as high as 109%. such payoffs to come with huge risks, especially in china where uber lags far behind its rivals. coming up next, making sense of the market chaos in asia. our next guest says settle down. the selloff is not the start of a bear market. ♪
angie: we will take a look at the korea talks. the standoff at the korean peninsula is over, at least for the time being. itsnorth agreed to lift semi-state of war and the south agreed to stop broadcast across the border. they said they will resume reunions of families divided by the korean war. a new anti-austerity party has been given three days to form a government in greece, although the chances are put at virtually zero. popular unity is a break off of the syriza party of alexis tsipras. have until wednesday night to present a workable administration or greece will face an election.
leaving a trail of damage across open now. .he storm -- across okinawa sustained winds of 180. reports of several bullet train services being canceled. earlier, this storm crossed the philippines leaving 19 people dead and 16 missing. to pin airlines has canceled 106 flights today. more now on today's market movements with china still in the red. other asian indices bouncing back. joining us now is the global market strategist at j.p. morgan asset management. phone ringing off the hook? >> there has been a fair bit of interest. this is not something that is unusual.
when we wereto talking about moving towards great heights, it was always about increased volatility. a pullback was likely. we see a pullback. what has driven that has been a little bit different. it has been about concerns with chinese growth, the pboc's reaction, and how that has been interpreted. increased volatility getting back towards more normal levels. that is explaining some of the psychological effects of what is driving the market. we have been a new normal for the past few years. end of the day, are we seeing a correction that will lead to a bear market? this is still summer. october is just around the corner. that is what everyone is fearful of massive correction.
if we look at developed market equities, this is a correction, not something unusual. 2014, october, we saw a correction. we say the same pattern -- same pattern we see play out year after year. in the u.s. market, this is the 23rd 5% correction we have had. i think that is what we will see for this one. fearful,lot of people at least yesterday. right now, the circuit breaker seems to have been triggered with most asian markets up. do you think that will reverse the sentiment on wall street? you can get away from the fact that china is slowing and we are seeing more action from the pboc. i think what we're seeing in developed markets is different.
the u.s. market is fundamentally in a pretty good space. there are concerns about inflation, but on the outside you have consumer spending in the retail sales. you have a labor market that should lead to higher wages. in europe, you have consumer confidence rising. you are seeing everything hitting the right direction. that will support those markets. medium-term, the drivers of holding risk and equities haven't changed. to -- doesn't harken back and let history be the guide. the last time this happened, when the fed was about to raise rates, when we saw china's devaluation. it triggered the asian financial crisis. again, we are starting to feel the same situation in the environment right now. could it triggered something
catastrophic like that? i think the fundamentals and the economy are very different now than they were during the financial crisis in asia so i take it is hard to draw those parallels. a lot of governments have learned lessons from that. i think to say how far china's growth might slow, that is too early to say. clientsfor many of our and investors, there is still all the long-term, fundamental fundamentalold the allocation in the portfolio. becomes, when we enter the market. , ahink maybe right now little bit of a cause. cause we are seeing in selling -- the pause we are seeing in selling.
we saw markets open in the red and that a massive turnaround. quite a spike to the upside. there are still a lot of investors out there holding cash to allocate. world, things are looking a little bit more expensive so when things do start to present an opportunity, they get snapped up pretty quickly. is that a lot of good quality companies can suffer. those ones will get bought back up really quickly. angie: we are seeing some shares that respond positively. not so much shanghai a shares. , ifhere still a play here you are feeling like you want to move cash into the market and you do want to find some bargains, what would you be buying? sectors, specific stocks? kerry: i would be taking an
extremely selective approach to this market. the one thing investors have to remember about equities around the world is that you have had this big bull run in the u.s. and the japanese market, so any littleou get will be a harder to actually obtain them what they might be used to. that is why what you pay for , if the world is -- ing to be better, the other things you to think about right now are, where our currencies going, what is the currency plan? also, do i want to have any exposure, which is probably not where you want to be right now. angie: we are going to leave it there but we will get back to you and discuss a little bit more about this very volatile,
opening of the move by session, just 21 minutes away. what will the day bring? wel it be a stop to the rout are seeing in asia. how is the morning shaping up? >> i want to start by talking about the currency. we saw foreign investors selling nearly $250 million, the biggest outflow the indian market has seen since april. the central bank governor as well as the finance minister trying to alley concerns over strong academic fundamentals, which are much better, they say, then other emerging market countries. they are saying the country of nearly $380 billion of forex reserves that can be used if and when the need arises. in a note earlier this morning,
moody's said that there are three government -- that the government bond rating with regulatory and infrastructure can -- infrastructure constraints. the sensex and the dse falling -- and the nse falling. all of them shaving off nearly 10%. back to you. angie: thanks for that. let's check in on trading around the region. difference aat a half a morning brings. it is back up, quite confidently in fact. of more than 2%. rising with futures after this sellout that wiped
out 2.7 trillion from global equity markets monday. over in seoul, we are seeing a recovery helping lead the way. this region seeing a little bit of a recovery. not on the mainland, but here in hong kong we are seeing recovery. in fact, there were some cheers from the floor of the hong kong stock exchange when those arrows turned from red to green. of course, we are looking to the -- we're looking forward to the afternoon business in tokyo. stay with us. ♪
analysts say the market is plagued by oversupply and continuing weakness in demand from china. china's central bank is injecting hundred 50 billion and up $23 billion come into the banking system today. that is according to traders who will be bidding at the auction. let's get the latest from the markets right now. the throw to david here. what is going on? --david: that is asia for you across sectors. we are midday here in asia. hopefully this momentum does continue. certainly, we have seen an acceleration a little bit. futures of the dow. last i checked, they were bot