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tv   Asia Edge  Bloomberg  October 11, 2015 11:00pm-12:01am EDT

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and the biggest ever technology merger. uber and its competition may be facing bumps in the road. we will be live in shanghai, but turning the corner after months of gloom. a revival? on andving up success off the court. we meet seven-time grand slam champion venus williams. all of that on this monday ." tion of "asia edge david: and i am david inglis. building on gains from last week, just about every market in the region is moving higher except for australia, which is seeing a broad decline. across theg session chinese markets. i mean, the hang seng is at a seven-week high.
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volumes are heavier than average the shanghai composite. the hang seng is up, and h shares up. chinese stocks listed in hong kong, and leading the charge, and shanghai. and southeast asian currency doing right now -- we had sharp gains last week. this morning, that is when the weakness started to creep back in. together,t everything the dollar index, if i am not mistaken -- there we go. the dollar index is a little bit lower, a fraction really. this is a function of the majors, not really because of , and the fedan fx funds futures, what are the chances of a fed rate hike? about 40%, and that is a
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moving target, obviously. don't hang all of your hopes on that one. and stanley fischer, and during the imf, they are keeping these rates, and we are looking at december, of course. moving target. i will be back later on to flesh all of this out for you across markets, across asset classes. back to you. some are going on a series of cost-cutting measures, including cutting jobs. which banks? who are we talking about? let's start off with standard chartered. thatter: it is understood the ceo actually sent out a memo to staff last week, saying these are going to be job cuts across the company's or thousand senior staff, including managing directors, and the bank is also going to sell some of its assets to increase its revenue.
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this is to beat a two-your profits slide. a seven-week high, and they were higher in london trade on friday. and credit suisse is believed to have cost-cutting measures that will reduce its bottom line, but no firm numbers on how many jobs will go there. aroundve got to free up $2 billion, so all of these cost-cutting measures meeting jobs to go. credit suisse looking at perhaps massive job that's there also. and a forecast for a huge loss week, a bitt last of a bold out of the blue, and the thing is, how do they deal with it? >> they are talking about getting rid of their insurance department. this would free up about $4 billion. also, legal costs. they are going to see what their
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lenders have to do in terms of life insurance. we signed 2008 the credit crunch. and a lot had to nail because they had too much debt on their books in terms of insurance. and they were scaling back their insurance operations. it would be interested -- interesting to see if it gets cut. it was certainly free up a lot of capital. you. thank ok, just taking a look at those stories making headlines this monday, due to report earnings, companies with strategic accounts may help to limit any declined with discretionary technology spending. $2.3 billion invested. we will be looking out for any as well asof a shift employee attrition rates and how things are going in europe. chinese stories splurging during the golden week holiday. than 7 million trips taken,
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most of them domestic. was up 11% from last year's holiday, an astonishing $170 billion. more than 4 billion tourists traveled overseas, and one of the top destinations. and shares in hong kong, pending an announcement, and in chile, plans to raise money. they did not specify about the debt cutting program. saidhief executive there he hoped to reduce the debt by one third to $20 billion. angie: deals are back in the headlines today, two a big corporate mash ups which could have huge reaper sessions for their industries. -- huge repercussions for their industries.
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sherry: an official announcement could be made as early as today, which could bring together the worlds largest storage maker and the number two company, so we are hearing from a source telling us that they could pay $25 a share in cash, and this could also include tracking stock in a company valued at about eight dollars for each emc share, and they say this is a much better offer, one closer to what the shareholders wanted. it could be a way to end a bad situation after years of struggles for both companies. this is as the industry undergoes rapid changes, shifting to mobile and cloud computing. , ane: ok, from text to beer interesting segue, but anb in bed and miller. shery: it has been a contentious
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week for a be in bed and sab miller. we are hearing from sources telling us that ab inbev has discussed raising its did for sab miller from 42 pounds per share them a 43. that is up to as much as $66, but that is still below what the u.k. were were once, which is closer to 45 pounds a share, -- wants,e u.k. brewer which is closer to the 45 pounds a share. these companies control half of the brewing industry's -- industries, and sab miller, they are being forced to choose sides on whether or not they want this deal to go through. ok, thank you. of course, you can get more on those stories and the rest of the day's news on
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there, you will find in-depth reports and market data and watch interviews you may have missed on bloomberg today. h: and here is david. david: the only market so far not finding itself above water, and a specific group of stocks which i will get to in a minute. like a broadly speaking x japan, we are off. eight out of 10. markets?ack to our ok, that being said, let me get on with it. eight out of the 10 sectors are moving higher. the two seeming weakness, consumer staples and health care. all right, back to the markets. here we go. industrial's, that is the biggest mover. ok, let's switch gears here a little bit. mining namese gold in sydney. seeing a rally, of sorts.
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if you could call it a rally. it is a bright spot. newcrest and other gold-related stocks. perhaps they move up in gold prices, gold is higher for a sixth day in seven days. right now, getting an update on the gold price -- there we go. belowutures are -- we are 1160. we are finally back above 50. we did briefly reach higher last week. and just very quickly before i go, let me leave you with copper prices, up a 10th of 1%. this roughly translates to the highest level for copper prices with chinese growth, its highest level in about a month. back to you. speaking of copper, it has lost about half its value. is warning hedge funds
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that if it is going to fall even lower, think again. >> trending, and i think a good example is there is lots of shortselling in copper. is on back of china a few months ago. and they are authorized, and are a series of players that use copper as a proxy for the chinese economy, said today, looking at the prices, the price for obvious reasons. compared to the cost curve, this is something. the china slowdown has taken its toll on australia's economy, but they have maintained a confident view.
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>> when it comes to this, china is obviously the most important relationship. the growth, that is very strong growth. supportive as a tontry of chinese efforts move from investment-driven growth to more sustainable domestic consumption. we understand there is a process to go through, but we are optimistic about the way forward. angie: and another factor playing heavily on the global economy is the expected fed rate hike. jean-claude trichet a refuse to enter into the debate over timing. >> i have full confidence in the open market. this is to take the right decision.
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we know very, very well what it is about, and so i trust them. so i will not make my own guess. word from that is the asia this monday morning. -- angie: that is the word from asia this morning. facing a regulatory hurdles, we are going to asia in the program, but shares surging. and moreiscuss that with ubs global management when "asia edge" returns and a couple minutes. ♪
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let's look att, some the top stories, malaysia. asking neighboring countries for help. this has affected large parts of
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malaysia, singapore, and even southern thailand. they have sent firefighting aircraft, and some banks are reviewing loans to companies linked in those blazes. angie: curbing a nuclear program, an outline of a necessary bill which allows the government to withdraw from the agreement if world powers do not lift sanctions, and the session was unusually tense, with hardliners repeatedly attempting prevent a vote, in an attempt to undermine the administration. the highest ranking foreign guest at the celebrations over the weekend, a parade and rally marking 70 years from the founding of the ruling workers party. would not stray from the socialist path established by his grandfather and that he is ready to stand up to any threat posed by the united states.
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angie: our next guest says volatility is here to stay but will provide opportunity, so where are those opportunities? tom rivers at ubs, and i guess the more specific question is, how do you make sure you are the winner behind every bet you make here? rish: he would not be sitting here. you cannot be a winner in everything, so you have to make sure you hit ratios higher so that winners outweigh your losers. in terms of volatility, emerging markets, we can see that is nothing new. invest inhink you can emerging markets broadly anymore. i think you have to be more granular, particularly right now. both currencies and equities in because the makeup of their economies and their markets are linked to different areas of the global economy, and
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we are looking for signs or looking for markets, if you like, that are looking at that western led growth that we are seeing and is part of europe, as well as various -- as well. rish: that sucking sound. liquidity, is that one of the reasons why we are these currencies like the rupee and the ringgit coming back? currencies are strengthening again. i think from our perspective, obviously, the quicker the fed moves, the better to remove that from the market overall. and looking at this in two of phases, or hopefully, and the first is about getting back to tradition. long term cycle, if that makes sense, so the first three rate hikes, and if we are at 70 54 100 basis points of june or your, that is pretty
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accommodative, and i think the sooner that happens, then the more the market will react. angie: in fact, that the u.s. is going to reach escape the lost city, and it will not have to retrench and maybe have to give back a rate rise, right? i mean, that is the warning coming-out of the imf. tom: it is. i think the market is makesstimated, if that sense, so i think it is absolutely not a steady path. 3%, three .5%, in terms of long-term expectations. i think if you can get back to having something on both sides of the equation, having a choice to make, that would be important. move thisant to do is away from an orthodox policy and stimulus to sort reinvigorate and moving from 2016 and beyond, that they remain on hold for a long period
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, war before they reach the long-term rate. rish: has it changed entirely? short-term, in the the fed change the game in terms the lastg at china at meeting. they introduced a third dynamic, not only looking at their own domestic economy, domestic you like, but now, if global economic concerns, and china in particular as a reason, if you like, for delaying that rate hike. but the economy change, not just in terms of china's rise, but the way that trade works and the way that people work. you have to get to grips with that. tom: i think the market is going to be slow to react to that. we know that services are manufacturingat is trying to catch up but is not there yet. struggling with it, manufacturing weighing heavily on trade.
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and china has to change as a result of that. we know that is what they are trying to do in terms of the economy, and there are traditional indicators, such as freight or consumption that may not be the best measures moving forward, but in the short-term, we can see a pickup. going back to the standard fundamentals, looking for a pickup in investment, which could see a little pickup in trade. angie: and that is not to say we are going to ignore tomorrow's numbers when that comes through, but we should talk a little bit more about china when we get back to the rest of the game. tom: thank you. angie: coming up next, sports. rish: minas williams in sports and fashion. andenus williams in sport fashion. angie: you are watching "asia edge." ♪
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♪ rish: welcome back. you are watching "asia edge." some tennis players are as -- here, and venus williams is there and also running her own fashion label. we caught up with her off and on the tennis court. >> my parents, especially my dad, and business off the court. always wanted to know who i was outside of tennis because when
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you are a young person and you start playing tennis at four years old, 30 years in, it is who you are, so for me, it was important to know who i was off the court, so starting a business is a big challenge, and it is important that i have good numbers, but it is also important that i understand the industry, as well. othern only rely on people so much, so i have definitely learned a lot in this is, and it has also helped me appreciate being at the top of my game in tennis, because when you start at the bottom -- let >> i imagine there is some disappointment with the training that you do that you take into the business side. just my personality also. i give 100,000%, so i have learned so much from tennis that i take out to the business as well. serena, i canwith imagine we have a bit of friendly sibling rivalry.
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what is it like? >> obvious the, the best moments are when we are playing in the finals against each other or when we are in the doubles finals playing for a big trophy. those are the moments that we trained for. we have had the opportunity to i that quite a few times, and am hoping we get the chance to do it again, as well. reporter: what are you looking irward to for hong kong? >> have played a lot of tennis in victoria park. a warm-up exhibition getting ready for the season, so i have played a lot here. this tournament will be the most important. this will be my last tournament of the main season, and i want to finish it with big bang, and if i get a win, i think i would be the happiest girl in hong kong. what about venus williams after she retires from tennis? >> after i retire, i want to
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stop. in tennis, you do not get to stop. there are eight weeks where you are not playing tennis, so it is really not a big space. at least have the time to train for the next year, so for me, i would stop, just for a little bit, and finally get more time for helping other people and helping with charities around the world. next, the south korean economy finally showing signs of revival? we are going to take a look at that in light of this week's impending rate decision. you are watching "asia edge." ♪ the only way to get better is to challenge yourself,
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and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around.
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♪ angie : jumping more than 3% as news of a spending spree comes through. than 750 million trips were taken, most of them within china. restaurants, retailers rose 11% from last year's holiday, to 100 revenue billion dollars. that is about the same as the gdp of kuwait.
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and a technology merger later today, we are waiting to hear about a storage provider. negotiations are continuing over we price of any deal, and are told they are looking to raise $40 billion, and there is also the broadcom merger. glencore is halted in hong kong trading pending an announcement on some supposed asset sales in australia and chile, as part of a plan to cut debt as quantity prices plunged. glencore has not identified which assets might go, but it does set interest in copper mines and more in australia. we have got david inglis standing by. david: thank you, angie. while glencore shares are off-limits, at least until this point, some of the big movers we
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have been tracking all morning, shares getting a further bump up over some reports, and we are talking about 1000 senior positions, and shares up 10.5%. gains over 30% over two days. why thatll tell you stock is doing that in a few minutes. ok. let's take a look at other markets right now. market led by another sharp rally, and h shares in hong kong. at these levels, broadly speaking, right smack in the august,f august, mid when we went from what i believe was 4000 to 3000 in a matter of a days. the reason i brought it up, have
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a look at this. the one-year chart, shanghai composite roughly up 924 points. charthroeder, a technical veteran, correctly predicted this peak here and the sizzling off, saying the shanghai composite will likely head back to about 4100 before the end of , 24 hundred next year. this bear market rally. cash market is closed in tokyo. we can trade the futures contracts, so your exposure. the nikkei futures in chicago, last i checked, they were positive, now trading down, and you have the dow jones and the s&p down as well just a few points, down two point 25 points. back to you.
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rish: we have had months of that it wasworried be a to come out of a slump. i bloomberg news economics asia correspondent is with me now, and what do we see? enda: the retail sector, and spending is back where it was. part of our tax break -- rish: middle east respiratory syndrome. enda: yes, that hurt them badly. to rolling out tax breaks get shoppers back into the shopping malls, and it is working. there are other signs in the sector, as well. is it enough? are there enough signs to say
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they have turned the corner and that there is momentum now? enda: no, not just yet, but at the very least, there are positive signs that it may be stabilizing, which is a long way from where it was back in the summertime. excess capacity in the manufacturing sector, creating a lot of electronic goods that the world just is not buying. a meeting this week, and a few people are expecting a move, but it is not the consensus. they have already cut rates four times since last year, and one of the biggest bets for korea is that things will pick up as we go into the key shopping season in the u.s. and europe. more korean tvs, and that is what policymakers are banking on. enda, thank you. may be facing
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another setback with a ban in involving handling services, and requiring licenses. ab bloomberg editor joins us live from shanghai. ngho, talk about some of the changes being proposed right now? : they released draft guidelines on saturday, seeking public feedback. some of the key regulations proposed include requiring internet booking companies, such as uber or its chinese rival, to use only cars that are registered for commercial use. the drivers themselves have to tests,, going for some and have minimum driving experience, and perhaps the most important role is that local governments will have to say how many permits they grant for such cars. angie: ok, this is very critical
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for uber and its chinese rival. ont impact would it have their future and their business? kongho: there is one analyst we the rules as says applied in the current form would deal a devastating blow to the industry. now, the current business model the chinese company is to sign a private owners of private cars using the app. by requiring only commercially registered vehicles be used, this potentially raises the cost of compliance and shrinks the pools of vehicles available, and as for giving the local authorities and different city governments the right to determine how many permits to grant, this also potentially cap the growth rate for these companies.
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right, i want to turn this conversation if you will to another item. car inc.. this is china a bus to be as biggest car rental company. it is going to start selling used cars. why is it doing that? ho: well, as you mentioned, is the largest car rental company in china, so as vehicles age, it is their potential to sell them off to toail buyers, so by going the retail used car business, it provides them an avenue to renew the fleet and to sell them to the retail buyers. is the consumers, the upside that they are able to get used cars from a reliable provider. we're going tot, leave it there. thank you very much there. and shanghai.
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rish: jet and some of his stories, jack dorsey is looking to cut costs. cuts will affect all departments. twitter has declined to comment. the company currently has about 4100 employees and has been reorganizing its engineering department. he says efficiency is his number folk cast.t -- and the number of people living below the property line has fallen to a six-year low in a hong kong. that means less than 450 u.s. dollars a month. and there are those that earn at least $10 million. and opec says they see demand picking up in the coming months and expect oil will be jumping to 110 million barrels a day by
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2020. they expect non-opec supplies will cut output next year, at the news sending brent crude down about 40% over the past 12 months. lost: well, copper has almost half its value since record prices in 2011, and rio tinto is saying that it will fall even lower. it is not trading on fundamentals and short sellers should be aware. space, we areer not trading on fundamentals. and i think a good example is there is a loss of shortselling in copper, and we have seen a cup in shortselling a few months ago -- we have seen a pickup in shortselling if you months ago. markets, where people were no longer authorized to short sell, and therefore what we have experienced is a series of players who use copper as a
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proxy for the chinese economy and therefore have started to shop. so today, if you want to look at where the price is without any guidance of the price, prices compared to the cost curve, there is something that does not stack up, and therefore, as i are thoseelieve there in the marketplace that are using copper as a proxy for the chinese economy and therefore taking some positions. very dangerousa game in the medium and long-term, because as we mentioned, we expect the copper market to move into a deficit, and you do not want to have a short position when it is moving to a deficit position. is, how: the question long do you think it will take for that process to shake out? i hope that in the next two to three years, we will move back into another position, and therefore, we will enjoy that
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context. reporter: both copper and iron ore dominated by one single buyer, it is china. copper is 40%. does that concern you in any way at all at a time when people are so bearish on china, and a question, reading china in various ways, the official data, but what about yourself? are you seeing china? what are you seeing compared to the way the rest of the world sees it? china, yes, 40% of the copper consumption. but there are few data points. there are new mines in mongolia. there is copper trade with china. trouble placing that product? the answer is no. my customers in china, do they have issues? all of the business we are doing
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in china is very solid. the answer is no. in europe,concern the answer was yes print we were concerned, but now, i am not concerned. rish: at next, is the situation making things more difficult for fed policymakers, and when the next hike may be when "asia edge" returns. ♪
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ng: checking stories around the world, turkey has buried the first two died in the bombing. least 95 people died, and it took the political and ethnic tensions to a new level. it is still not known who carried out the attack, and saturday's attack follows july which wasbing
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so-called linked to the islamic state. a disputed island group and the south china seas, on the islands, and these islands are believed to sit on top of oil and natural gas deposit with the world's busiest ceiling, they're also claimed by taiwan, the philippines, japan, brunei, and more. a range ofng challenges from protests about a new constitution to rebuilding after april devastating earthquake in nepal. popular with is voters and has a reputational being outspoken preeti is a minister, -- outspoken. he is a former deputy minister. rish: david, shery, and, of
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course, angie is with me. what is the impact? is goingoking at what on in in emerging markets. >> they mention it, but is it more to do with the impact that they have on the u.s. rather than what the u.s. has an impact on them? reporter: yesterday if you look at the minutes released last week, they have looked at how that will impact china demand demand forimpacts exports, and the strength of the u.s. dollar and how much of that strengthening, if that makes sense, so that is a combination of the two, but it is definitely a starting point. rish: i want to go over to zeb. zeb: that is right, and this kicks up the earnings season and . beat i believe this is a seventh
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quarter they are beating their second-quarter numbers, that income at 34 billion rupees. down to millions of u.s. dollars, and that is above estimates. our survey of analysts called for 32.8 billion rupees, so a beating, and it also be on the revenue side, as well, and generally, the analyst are positive on this company -- and also beat on the revenue side. reports. tata the analysts are saying that the ruby will get some lift to willt margins -- the rupee get some lift to profit margins, and this is despite the challenges at home in india, and if you look at operational costs , we have some interesting numbers coming through. they are higher, 19.2 billion rupees. again, earnings-per-share, this is what we have.
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second quarter earnings per beating,s is handily and the company is saying it will pay a dividend of 10 rupees per share. we will be watching very closely in the conference call on the contract costs and also the deal outlook. we want to see if there is any m&a activity afoot, but this certainly comes as welcome news to investors, so shares are up over 2% in mobile -- in mumbai, on theosys beating seventh of seven quarters, so good job there as a kickoff the earnings season. expecting data coming out of infosys, and those earnings, is this more indication that narendra modi is really being effective when it comes to that? tom: it is. reforms we're seeing in india, it is always difficult, because
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there is the announcement of reform, and then the bullish sense picks up, and then the second phase is about and ienting the reforms, think two things to say. the growthrom perspective, that is strongly encouraging. and i think the second point there is quite right, as mentioned. the currency really helps corporate earnings at the moment. feeding that back in, and that is good and good for the equity sector overall, so a strong number. gains for rupee another consecutive week. is this just transitory? tom: i think it is difficult to call it a recovery when the fed is so uncertain. i think ultimately once we remove the uncertainty premium, it is quite possible that we particulare asian fx
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work better for us. and some that have stronger balances, there are secondary opportunities to take advantage of, given the weakness we have had over the last 12 them at 18 months. in terms of indian equities overall, we want to some of the structural reforms before we go overweight, in particular, but we were on the indian rupee for this year, and in comparison, the korean wan and kerry opportunities, that is very important. carry opportunities. that is very important. zeb: asking a question. definitely -- tom: we are seeing idiosyncratic opportunities in the philippines. good, strong economy with an improving current account situation. i think more broadly, in southeast asia, we need to see,
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again, a pickup in the global sentiment improving to take advantage of that broadly. tom, portfolio manager, thank you for joining us today. your debut. talk: thanks very much. angie: you did a good job. and from india, we heard from zeb eckert, with the earnings for the country's second biggest info company, infosys. -- zeb: beating on income, the seventh quarter in a row that they have surpassed estimates. we do have some breaking news though as shares rallied to a record. we seeing shares up 2.7%, and that is a record for infosys, but some executive movements to tell you about. the company confirming moments
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ago that it's the fo has resigned from infosys, according to a company statement. we are awaiting further word of exactly why he has departed the company and who will be named to replace him as chief financial officer, but he departs at a time when the company sales generally look good gets seeing strength in the u.s. it is seeing a lot of activity in the cloud space, and this is watch, because it starts the sensex earnings season. , sotomorrow, we get tata widening on the earnings front in india. angie: thanks, zeb. too many cooks in the kitchen. toer the break, we are going meet someone making a mark in hong kong's crowded culinary scene. stay with us. ♪
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rish: welcome back to "asia edge ." 20,000 eating places, the most restaurant city in the world, one establishment for every 650 people. angie: amazing. and here is how to create a winning recipe. ♪ in the restaurant ness, so food is in our mind, one of the most important, and people expect minimum expectations. i think it would be good food, good service, and the right on beyond we try to be very authentic. this used to be a storage space, and a special thing about our pizza,ant is we have
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very authentic. it is very competitive in hong kong. you need to understand the target market very well, and there are so many things to eat. this is basically -- as you can see, the food is a reflection. ist is missing in hong kong more of a sustainability concept. , but theysuppliers are all just closing down one by one. comparison, for example, ne is such an and we'll part of singapore. in hong kong, not. a month away from losing money.
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unless you really love the business. it is a good or bad way. angie: she prepares to open her new rest
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>> the following is a paid host: the following is a paid program for the tummy tuck miracle slimming system. the nonsurgical method that instantly erases inches from your tummy, trims fat off your belly without diet and exeis


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