tv Bloomberg West Bloomberg August 24, 2015 11:30pm-12:01am EDT
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 both .orth of about 2%
closing below 1900 on monday. that is one of the encouraging signs. asia. get you a map of these steep losses in the past two or three days has suddenly made these valuations attractive. in look at valuations back may. timese at about 15.5 earnings. , overnight -- well not overnight, three months, but somebody brought that down to 12.5 times. volatility measures, that is also taking the dow a step or two down.
nowe looking at japan right . at aboutd the day out 118 -- at about 1.18 to the u.s. dollar. u.s. dollar.to the that was a q4 a lot of these investors in japan to start buying up. looking much better than at the open. 3000 level was actually under threat. have -- central called to action to offset this off -- this impact. into tuesdayrates were showing signs of stress.
day.ieve 259 for the seven before i go back to hong kong, this is a little interesting. market spikeduan to 22%. what are we doing now? 20%. at the start of all this, it was below 4%. we will see what happens here. angie: keeping an eye on the markets in hong kong were stocks and now reversed their declines. the latest from the stock exchange. >> a lot more calm on the trading room floor of the past hour or so.
we heard some cheers on the stock exchange trading floor. it turned from negative into positive and in fact, at one point, very briefly, it was up by more than 2% and we heard some bring -- we heard some big cheers. we have seen people feeling a lot more relaxed than they were at this time yesterday. pboctions from the certainly starting to help lift sentiment on the hong kong exchange. s&p futures are up by more than 2%. communication stock headset looking really strong. there are still some stocks in the red. it hasn't been a complete turnaround of those 50 stocks
that were heavily sold off yesterday, but certainly the losses aren't anywhere close to what we saw yesterday. sengiggest lag on the hang index today is just under 2%. where we are seeing volatility is in those a-shares, the mainland shares. they have been swimming in and out of positive and negative territory. a much brighter picture ahead of the lunch break. live for us from the hong kong floor of the stock exchange. reversing declines across almost the entire region. let's check in with our southeast asian correspondent. things are looking much better right now. a couple of hours ago, i was a little bit tepid. benchmark southeast asia index rising about 2%, up for
the first time in seven days. we have seen gains in singapore and indonesia. indonesia rebounding from a 2013 low. some say that the plunge has been too deep and it is time to buy again. singapore still hovers near fair territory. -- near bear territory. a risk of jeopardizing a bull run that stress for almost four years. in indonesia, extending its gain morning, the this second worst performer in asia this year. no refrain for the rupiah. here.are several concerns the slumping commodity prices among them. is -- they discussed what
is needed to drive the economy and drive foreign investment. tell me what is going on in the philippines. yesterday, there was an accidental trading halt that quickly resumed. today, another trading halt. days.trading halts in two the authorities say it has to do with a technical glitch. nothing has been said about it. the trading halt was announced about 40 minutes after trading started. today, there has been speculation that it was intentional to limit losses. it is seen as a relative safe haven in the region. relativetive word is because of low level investments in its bonds. not susceptible to weakening
prices. the philippines is most insulated from a slowing china. i can't think of a country in a better position. but to trading holes in two days. angie: waiting for that explanation. for now, we are told it is a technical glitch that stopped trading twice in two days. malaysian stocks have erased earlier declines that drag to the benchmark index into a bear market. joins us.tv malaysia are we out of the woods yet? ofthis is very much a story fundamental sentiment. on monday, we saw in decline, the biggest decline since 2008.
malaysia, being a net oil exporter, this is a concern given the status of national revenues. 1500ext level is seen at and asset management sees this correction as a buying opportunity with the plan station sector right -- with the plantation sector ripe for the picking. overseas holdings of malaysian debt fell in july to its lowest in three years. yesterday, it added its holdings of malaysian debt. it has been a contrarian investor who bet on the irish debt. he says the malaysian economy is far stronger today than during the 1997 and 2008 financial crises. get is set --g the ringget is set for the biggest gain.
saye're seeing analysts that this gain is unlikely to be continued, given that the fundamentals have not changed and the weakness in asian fx, broadly speaking, is linked to several macroeconomic indicators. to not be surprised if the ring get falls to 450 to the dollar. we did see the game here to about 425. the momentum unlikely given the sentiment and story we are seeing. angie: what measures are being considered by malaysian officials? >> today, the prime minister said that there was likely to do the formation of a special economic community to maintain the growth we have been seeing since 2008. the prime minister is saying that we are at risk of
undrinkable global economic factors despite the fact that we have low-inflation and the labor market is stable. last week, both the prime minister and the central bank governor said that there will be no capital controls. given the fundamentals of malaysia, they are insisting that this is primarily due to the instability seen in global markets. investors are probably wondering what to do. we have the father of emerging markets investing coming up exclusively from bloomberg. we are talking about mark mobius. ♪
tuesday, after what many are calling black monday, which wiped out $2.7 trillion from global market values. they're in seoul as well is the father of emerging markets investing. we are joined now from seoul. veteran investor mark mobius. he is making time in his very busy morning as you can imagine to speak with us at bloomberg exclusively. thank you for talking to us in our viewers, and talking us through what many are calling a global rout. has the rout stopped? as a veteran market mover, engager, watcher, what are your thoughts? there will be sort of a dead cat bounce you get a reaction but then we could go down a little further.
when you look at previous bear markets, this is not really in that territory yet. overall, we are talking about less than 30% down. rustic was down -- russia was down over 50%. they are not down by the 30% plus that we normally would consider a bear market. headed down a little bit more because people are so pessimistic and so much money has been withdrawn from the market that sellers are forced to sell. people that are running funds .re being forced to sell i think that would probably have a little bit more to go before we see stabilization. i was shocked to see ge down 3% on the open today.
it is an amazing situation where you had that kind of volatility. that is what goes with all the derivatives and so forth that is in the market these days. trading, thoseic platforms that are triggered with margin calls. you saw this coming and you will do a lot of money to the sidelines earlier. tell me first of all, what you saw coming, why you thought it and where you are using your money right now. the valuations are getting completely out of control. they continue to be quite expensive. old-time stocks they couldn't grow that much but
were quite expensive on the back of these very low interest rates. we think there is an expectation and that expectation will cause people to sell. it could get out of control, because with these programs trading, once you hit certain marks come everyone piles and and starts selling. what we are doing now is sitting on cash and waiting for the right moment for an individual stock that looks really cheap. when i feel really cheap, i mean 10% dividend yields. ratios are below 15 times. around thatcks meets that yet but i expect it to happen. do you think that the
market is going to find its own stability in terms of sentiment, or to think central bankers and policymakers are going to have to step in? i think there is not much central banks can do because they have already been pumping money into these systems. trigger would be their willingness, as you can see in -- is to loosen up on the reserve requirements. this is a problem we are facing in the u.s. and europe. the central banks are telling them, you have to stay with your balance sheet and so on. it is not really being lended. the deposit ratios are way down. if the regulations are changed
to allow the banks to put money into the market, then you will see quite an upsurge. go, yourfore i let you advice to investors right now. mark: advice is don't get excited. take a few days off. wait for the market to stabilize. don't be afraid to buy whatever when else is selling but don't do it in a rush. take your time. bear markets are usually short in duration compared to bull markets but they can last for months. angie: keep your powder dry. thank you so much. executive chairman of templeton emerging markets group. ♪
watching "asia edge." is with j.p. morgan asset management. how much of this is china and how much of this is the fed? >> a lot is china. visiting chinese made evaluation. made in china is the phrase of the week. it is going to be about china for a long time. people are still going to be waiting to see what happens from .he pboc, with commodity prices on top of that, they're waiting to see what the fed might do. aad: this is probably delayed the fed move. 60% thatmething like they would move ahead by december. it may have even gone down to fewer odds.
is a difference between what the fed wants to do and what the fed will ultimately do. they want to raise rates. they know their economy is getting stronger. the housing market is improving. that willi do know come eventually is a recession and any higher rates when that does happen. what the fed is also doing now, which they shouldn't, is paying attention to markets. they need to focus on the economy and not the market. unfortunately, because of how much is inlved, the two are becoming a little more intertwined. you think at some point, if funds start buying into the u.s. dollar and jacking that up, is that something that should be watching? kerry: the dollar is going to continue to strengthen as people will see -- as people will use a safe haven.
preoccupationural with when the right height -- when the rate hike will happen. for us, it is about positioning for higher rates. the slow and gradual, that's what matters for markets and for how others a con -- and perhaps other economies in the world react. >> we had been brooding of the archives of the data we have seen in recent crises. asia in 1997. would you call this a crisis? i wouldn't call it a crisis. i wouldn't call this a correction in developed markets and something a little worse in the emerging world. the emerging world has been in trouble for a long time. commodity prices in demand has been falling. that will not change. opec pumping out 32 million barrels a day. i ran coming online, potentially -- iran coming online,
potentially iraq as well. >> i want to get back to your point about the fed should not be watching the market. with such a huge decline, how much of it is going to flow into the real economy where the jobs are suddenly lost, layoffs, people's confidence to spend, dwindle. that is the key, how much does it affect confidence? as the stock market goes up, people feel wealthier and they start to spend more. there is a lot of inequality there. it does play out the confidence and retail spenders. we are seeing that a huge amount at the moment. retail sales are much better than people are expecting. >> most people, if they are engaging in retirement funds,
they have their 401(k) in the market. kerry: a lot of people in retirement done really pay that much attention. what about confidence when it comes to china? investor confidence in china itself. is it for once in for all reduced the economic stats to fairytale status? kerry: there's always been a lot of skepticism about the chinese official data. you look at electricity production, rail freight company tells you the economy is slowing down. is it headed for a hard landing or something manageable? i think it will be something that is manageable. transitioning your economy, you will always have slower growth.
it is proving to be another dramatic day. opening following monday's selloff wiping some $2.7 trillion off of global market value. aren, korea and australia all back in positive territory. stocks have been suffering as commodities hit their lowest since 1999. crude has recovered slightly. west texas is below $39.