>> still slowing, this quarter's first indicator from chinhina ss a third straight monthly contraction on the factory floor. --gmatic part of ticks workingc politics, together to save a stumbling economy. and a losing hand again. welcome to first up, coming to live from bloomberg's asian headquarters in hong kong. happy monday to you.

let's go straight to some breaking news this morning out of south korea. the september current account balance came in like this, a surplus of 10.6 billion dollars. that is up from a surplus of a .5 billion dollars the previous month. a bit of improvement there, a wider surplus. we are going to see how markets react in an hours time. or breaking news. this time, cvs coming in with earnings for the third quarter. net income came in at one billion singapore dollars, $764 million. 8% better than what analysts were expressed -- were expecting. let's switch gears to china. the first economic indicator of the quarter is out and it is signaling further weakness in

the manufacturing sector. the initial pmi figures showed contraction for a third consecutive month. it's much more the same story again. >> it is. it's a weakening economy and we have deepening deflationary pressures. fairly weak global demand is feeding into what we are seeing at the factory floor. at october pmi coming in 49.8. as you can see, the third consecutive month of contraction. better than august, the same as september. you can look at this two ways. the third straight contraction below 50. 49.8 is a sign of stabilization from the previous month. it depends on how you want to look at it. of course, we need to get a couple more months and see if we can get back up above 50. most indications are that there is some stimulus in the pipeline. we have had interest rates cut since last september. we have had infrastructure measures to try to stimulate growth in the economy, so some

are expecting a little bit of a pickup in the fourth quarter. as we all know, the third quarter was down to 6.9 percent growth. interestingly, the chinese trying to move this manufacturing-based economy into more of a service-based economy. was outice pmi yesterday. it is still an expansion, but at the lowest point, 53 .1, the lowest since december of 2008. yvonne: so, the pace of growth definitely declining. does this mean that the measures of the central bank have not really taken effect in the economy yet? >> there may be stabilization in the larger companies, but the smaller companies are still hurting according to many economists.

a survey of small and medium-sized private enterprises is coming out. i don't think we have a bar chart for that. but the expectation is for something well below the expansion territory, deepening into contraction. september was 47.2. seven straight months of contraction. there is definitely weakness continuing in the smaller private enterprises. yvonne: we will get those numbers in about two and a half hours time. let's check on the markets in asia that are open. in australia, pretty much flat. the australian dollar is weakening this morning. 71 u.s. cents after steve mentioned that pmi data. the third contraction we have seen in the last three-month. let's go to new zealand to see how things are going right now. pretty much flat as well. zealandwave -- new dollar also weakened.

in japan andg down korea. let's go to japan. they are holding off on adding more stimulus, making futures look like this. a lower open after closing .1% up on the nikkei on friday. dollar-yen, seeing some strength of this morning. macau.o to casino woes drag down into a 17th straight month. gaining revenue fell more than expected, despite an anticipated visitors bike over china's golden week holiday. modes bring in our gambling guide. -- let's bring in our gaming guide. we saw a record number of tourists coming in. but they were not throwing money on the tables. >> they were not spending as much. in how muchpickup

they spent per day during golden september, buto it was less than golden week last year on a daily intake basis. where are we right now? roughly, this is a chart all the way back to 2005, that was your peak. this is monthly revenue gain, by the way. we peaked at over $4.5 billion. we are right now just over $2.5 billion, roughly speaking. obviously doing a conversion they're based on the exchange rate right now. $20 billion.ly the silver lining is that the pace of declines is now under 30%. i think that shows you how bad things have been if that is the silver lining. about visitor arrivals. in october.kup

it would have been more were it not for the typhoon that slammed into southern china on october fourth. for that day, we saw a decline in visitor arrivals. it was an important barometer that analysts had flagged early on. arrivals shows you whether the pace of declines will persist. ,aily intake for golden week $914 million. roughly, outat is u.s.0 -- 114 million dollars. yvonne: what is the outlook? analysts still think the fourth quarter could be some concern. revenuethe source of here?

>> it has been a major source of revenue. it argued we depends on which can see no you look at. it is no longer the -- it arguably depends on which casino you look at. it is no longer the major revenue source. we are down 53% from the peak last year, roughly about $1.2 billion. if you do the math, it's less than half. bank came out and said macau is not out of the woods yet. we don't see vip is coming back to the tables, literally. here today, you put everything together, they think we are going to be down 35%. yvonne: thank you so much for that out of macau. let's check on some other headlines this morning for you.

onece's biggest banks are sounder footing. parliament pushed for legislation to recapitalize lenders. they say they need another $16 billion to ensure they can withstand another crisis. repairing the financial sector is a key part of the greece bailout. the u.s. says athens has made togress, but much more needs be done. volkswagen sales have slumped compared to a year ago. new vehicle sales slumped to just twice or hundred in the ssions scandals. books like and does not sell the affected vehicles in japan, -- volkswagen does not sell the affected vehicles in japan, but the scandal has affected its image.

westpac, the australian bank, had record results. it's all profits rise in 2009. the debt charge rose for the first time since 2012. westpac will pay shareholders of full-year dividend of 94 australian cents. tenet, japan, and korea have struck a blow for -- china, japan, and korea, have struck a blow for pragmatism. they agreed to work together to promote growth, this after the first summit in three years. they have been looking at mission statements and personal body language. ,> the photo from the summit you have the leaders of japan and china on either side of this half korean leader -- of the south korean leader, holding her hands, not directly touching each other. that signals that the historic and long-running tensions

between these countries will not go away. deep-seatedill tensions. however, you can see that the needs of theic nation, and security interests, are tied together despite cultural differences. they must find ways to achieve common ground on key issues that will benefit their economies and millions of people -- billions, really, who live in this part of the world. hugely important economic bloc. yvonne: cultural aside, beyond how largelyerests, does trade factor into these talks? >> trade is huge. we have seen each of these countries experience their own challenges recently. we know china's challenges. they are in the forefront each and every month. manufacturing weakness has yet to bottom in china. we saw exports fall 15% in

october. japan may have slipped into --ession, and trade issues well, the tpp in the u.s. does not include china or korea. north korea looms large in the background despite the fact that china and north korea are allies. china does not want to see a nuclear pyongyang anymore than soul or tokyo. that body language is interesting to read. it speaks for itself. thank you so much for that. you can get more on all of the days top stories at our digital destination. bloomberg business brings together the best of bloomberg and, business week, bloomberg television. also on bloomberg.com, chinese investors keep buying the same small cap stocks that hurt to

them the most recently. facts for they world's biggest ipo this year. that on theng about website. make sure to check it out. coming up, what decisions will affect the central bank policy and how might that affect markets over the coming months? ♪

russian aviation officials say the airliner that crashed on saturday appears to have broken up in midair, scattering debris over more than eight kilometers. the metro airbus jet crashed after leaving for st. petersburg. all 200 24 people on board were killed. egypt has dismissed a claim by islamic state that it brought the airliner down, indicating

technical problems were to blame. ang sang soohee -- party offers the only path for real change. she won the last openly contested election in 1990 before the military contested the results and put her under house arrest for 15 years. a radical islamic group is the prime suspect in attacks on book publishers that left one dead and others critically wounded. a blogger was hacked to death in february. he is one of four bloggers murdered in bangladesh this year in attacks blamed on this group. coming up thiss week here in the asia pacific. what are the odds of an interest

rate hike tomorrow? thatn australia, the race stopped the nation. economists are betting on glenn stevens cutting rates to a record low. .orecast include further easing when stacy's most anticipated sees in years -- wednesday tokyo's most anticipated debut in years. this comes as she and sue abbe tries to persuade households to abehis comes as shinsu tries to persuade households to invest more of their savings. nissan is putting its money on battery power. results one thursday. that is the same day president begins agins -- ping

visit to vietnam. this is at a time of strained relations over the disputed islands and oil in the south china sea. a lot going on this week, for more, let's bring in a senior vice president from td ameritrade based in chicago. it's warmer in studio here. thank you for joining us. we start the month of november with a clear signal from the fed that december is pretty much a live event. the doj said they are going to hold on raising stimulus. what do you think of the communication and pr right now? steve: the world is still a wash in liquidity. they are talking, and futures 35% to over 50% possibility of a hike in , 71% in march.

that said, i think they are very well aware that this is a global the other people looking at monetary policy will have an effect on their decision. that being said, we always try to translate this for our clients. what we say to them is let's look at the health of wherever you are investing for a little longer duration, and in doing so, i think that will help them guide their decision making with regard to trading and investing. having done that over the course of the last two months, they have been pretty handsomely rewarded. thene: when you look at bond market, investors seem not really convinced there is a hike. we are seeking yields at 220 and below that. what is the other side of the coin here when you look at this argument? steve: i tend to believe we are going to see the fed act.

if they don't, they will have a credibility problem. they signaled what they intend to do, and i don't think they want to lose that credibility. now, again, if something happens between now and december, all bets are off, but assuming we have -- and we have unemployment numbers on friday, which should be a pretty good indicator as well. yvonne: the shocking number we got in september of 142,000 jobs. is there a line in the sand? 170e: they are looking for 9000 on friday. i think it has to be north of 150,000. the inflation target is going to be more difficult. in terms of earnings season, we have seen it so far pretty positive. it really has buoyed the stock gains here, best monthly in years. are we going to see that as we get more

earnings this week? steve: about 50% of the companies on the s&p that have reported have beaten estimates. to your point, we are seeing double-digit gains in the last month in the broad-based industries. we are at the tail end of earnings. we have a couple of stocks left. it's my anticipation we will see the same ratio of eats to mrs.. -- beats to misses. yvonne: what are you telling investors about the u.s. markets? are staying the course. they will rollout of some things that have appreciated greatly and they will roll into things that have not. they will rebalance their own portfolio in a self corrected manner, which is very positive. yvonne: what sectors in particular? surprisesned positive based on chinese volume.

steve: mcdonald's, apple, nike all cited that. our clients love technology. apple, facebook, tesla, netflix, they love those docs and they have been pretty good for them for the last couple of years. yvonne: do you hear your clients having concerns about global growth or the strong dollar? those are big headwinds. steve: they are, but if you're trading multinationals, it means something. if you are trading smaller ones, it doesn't mean as much. ofdepends on the composition your portfolio. the other one that has caught a bit of interest based on interest rates are the financials. obviously, they are going to be doing well if we see some rate hikes. for joining usou in the studio and welcome to asia. .oming up next, four more years the rugby world cup final where

history was made. stay with us. ♪

yvonne: the rugby world cup is over for another four years. points scored, and a back-to-back championship for new zealand.

surviving a second-half fight back to claim the cup. 34 points-17. new zealand fans were up early to watch the match, which kicked off at 5:00 a.m. auckland time. they saw their team completely dominated the first half to rack up a 21-3 lead at the break. they's gourd 14 -- while they scored 14 unanswered points to start the second half, new zealand regained the lead two minutes from time. -- a fittingran sendoff for the veteran captain who is now expected to retire. not to say the game was easy. it was a world cup game and it could've gone either way.

but i think staying confident and calm, playing the way we wanted to [indiscernible] yvonne: the martian is still top dog at the box office despite opening more than five weeks ago. it's still number one in north america and generated $11 million over the halloween weekend. "burnt" brought in $5 million. we live in a pick and choose world. love or like? naughty or nice? calm or bright? but at bedtime ...why settle for this? enter sleep number. don't miss the semiannual sale going on now! sleepiq technology tells you how you slept and what adjustments you can make. she likes the bed soft. he's more hardcore. so your sleep goes from good to great to wow!

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yvonne: we saw more of pouring -- more outflows from foreign investors on friday. half an hour away from trading. the top stories this hour, china's manufacturing sector showing further signs of weakness. the official factory pmi came in at 49.8, missing estimates.

that is the third straight reading below 50, which indicates contraction. data released on sunday did show a pickup in the construction sector. revenue fell for the 17th straight month despite an increase number of visitors to mccalla over the golden week holiday. over the to macau golden week holiday. it was a bigger fall than analysts were expecting. china, japan, and korea have put aside three years of strained relations and declared complete cooperation to shore up their slowing economies. these were the first trilateral talks since 2012, which word -- which had been suspended over territorial disputes. news out of australia. we are taking a look at october td inflation. on theins unchanged

month. on the year, the index rose 1.8%. let's see how the aussie dollar is reaction to that news. here is juliet. good morning. inflation certainly not looking like a problem in australia, but we are seeing reaction in the aussie dollar. much.s. dollar has not had of a reaction at all to the security gauge. we have seen the aussie fall a little bit since friday. analysts essentially saying it is unlikely the aussie dollar will reach any higher than 72 u.s. cents. there is a lot for the aussie to data to including chinese coming out later today. also, the manufacturing data we

had over the weekend, and of course, the rba is moving tomorrow, holding an interest rate decision. it is interesting with the rba, because the banks have gone out on their own and raised rates. the big for lenders have come through. we have seen a 3% increase in lending. the markets are not loving that number. they are down in early sessions. the biggest stock on the australian index is a little weaker as well. let's have a look at what we are expecting in the region today. this is the picture coming through from the u.s. on friday. we saw some weakness in the main indices. the china-u.s. index had a big gain, up 3%. we should expect good gains coming through from chinese stocks. on friday, the nikkei closed up

higher, .8 percent. corey a closed a little weaker, and we will the bethe correia -- korea closed a little weaker. a low-cost carrier sold its shares in its ipo around 31. watch for that to come online later in the week. yvonne: thanks, juliet. korea.stick to corr chaebols arewn as tightly controlled by ruling families. themore, let's bring in director of development and research. a complicated structure, really, when you look at this map. give us an example of what it's running through the west. based on this analysis

some new data, some toys, if you ill, that our global data team had given us. this is samsung. affiliates at the 67 that samsung has, the blue are .rivate, the pink are public there are 17 public entities. example of how complicated the ownership structure is of these companies. what interesting is when you , you start to see the interweaving of ownership stakes by companies into both public thatrivate entities samsung owns. in the end, what you end up with is what looks like a little bit of spaghetti. , i guess, the

issue that when you invest in korea, you are investing in chaebols. if you look at the nine companies we picked to dive into to begin with, it's about $540 billion in market cap. if you compare that to the cosby 500, a broader index and korea, i 500, aut -- kosp broader index in korea, it's about half. yvonne: how do these companies perform operationally? is this family control good or bad for revenue growth probabilities? >> it's interesting. when you look through this, if you take these nine companies as examples, you have a 4.8% sales growth for 2016, as an example. asia is expected to grow something more than 6%. of a hurdle for

these guys. from an operating margin and return on equity, the same thing happens. a little over 7% expected for property margin. a little over 7% are a. --roe. profitability always causes some consternation and questions with investors. yvonne: what about valuations? there is a view that conglomerates trade at a discount. >> indeed, they do. from a price to sales , price toe, it again sales is 0.4 times, which is low compared to pretty much anywhere. broader, benchmark, 1.4 times. a big discount on a price-earnings basis, 11 and a half. versus 14.5.

the answer is yes. , gated. investors tend -- complicated. investors tend to value discounts. yvonne: thank you for joining us. quick look at some of the top stories on the bloomberg terminal. has raised kong ipo about $811 million. that's the top end of the range. investors -- cornerstone investors picked up a majority of the offerings. a chinese firm has helped boost hong kong's ipo volume. we will be watching the world's biggest lender when hong kong opens later. icbc rose .5% last quarter, after more than doubling provisions for bad loans. it's bad loan ratio stood at one

point 44% of total credit at the end of june. adr fell half a percent. icici has posted a record quarter profit. it was in line with analyst estimates. a 25% increase in domestic retail loans has offset a slowdown in corporate lending. icici is also planning to sell a 9% stake in its insurance unit to raise capital. those are the top corporate stories. india is poised to maintain spending on infrastructure as it looks to boost growth. critics are concerned the government will have to cut back to meet its targets. the junior finance minister says there is no need. -- aerg editor in chief bloomberg editor-in-chief says

he is confident they will succeed. >> indirect tax revenues are running very strong right now. are littleenues lower than we would like them to be at this stage, but we still have five more months to go. on investments, we had quite a challenge, and we have some work to do. but we think when we combine all these different elements and ,ake a look at the expenditures think we have enough to work .ith we are confident we will be able 9%meet our three point fiscal deficit target. >> can i ask you about the rupee question market has been fairly stable this year. -- the ruby? pee?he ru

it has been fairly stable this year. >> in 2014, the macroeconomic indicators were all flashing red. a downturn in the commodity markets. we have been able to restore stability to our macro economy, and now all of those indicators are flashing green. i think the rupee is really showing that, because unlike any other currencies that have been roiled in the currency markets, the rupee has been an island of stability, and i think that reflects a very strong macroeconomic foundation. india's juniors finance minister speaking to bloomberg. just ahead, new signs of a

slowdown. our next guest says it's going to be a bumpy road ahead for china. details on first up. ♪

yvonne: israel has barred palestinians from part of the west bank city of hebron after a week of violent attacks. he pulled her 20 palestinian man ran his car into a wave of people were hurt when a palestinian man ran his crowd of pedestrians. the fbi says there is no evidence that the explosion on the maldivian president's boat was caused by a bomb. the president was not hurt in the blast, but accused his deputy of trying to kill him. examined evidence

from the boat and says there is nothing to suggest an explosive device. party is back in power. it got 49% of the vote. turkey has suffered a wave of that haveattacks alarmed investors. the lira jumped the most in two years on optimism of political stability. tom mackenzie is in istanbul. a big gamble.n i gamble tonight's results show has clearly paid off. militants, kurdish militants, the pkk, and the down.ment, had broken

over 100 people were killed, mostly kurds. that was blamed on the islamic state. there has been a crackdown on the media. thethough, they have majority. they played the security guard, and it has paid off. no talk of changing the andtitution, but security, that is what people have bought into. the challenges for this new government are huge. on a social and political front, how to deal with the kurdish problem, the militants, the pkk, and the truce? on the economy, the lira is one of the weakest currencies this year, although in recent weeks it has picked up. unemployment is high. growth is slow. there are reforms many analysts say are needed and the government will have to confront those. yvonne: tom mackenzie reporting from a stumble. back to our top story, the slowdown in the world's

second-largest economy may not be over yet. official figures show the manufacturing sector contracted for the third month in a row. for more, we are joined i our china economist, john jew. economist-- our china . his growth going to be a concerned. this has always been considered a bright spot to offset manufacturing. see aare starting to slowdown. that has been in the data for a while now. this does include construction and utilities as well. continue to see export orders show decline. chinese exporters remain challenged until the end of the year? what is your forecast?

story is global growth that trade has been contracting. that is a trend not just for china, but for exporters around the world. yvonne: it is still a pretty mixed picture. we see copper prices rising. the equity markets are often percent this month. but then you see aluminum growing substantially. there is doubt on domestic demand. what kind of picture does this paint to you? signsyou are seeing some of relatively strong growth in the services sector. sales have been reasonably strong, but clearly trade and other things continue to trend down. on the whole, there is not enough demand. yvonne: we have seen fixed

interest rates since november. you say probably one more this year. why? john: i don't think the inflation picture would war further easing from the authorities. we think there will be another cut. also, i think they will cut more aggressively, 100 basis points this year, 200 basis points next year. that is our forecast. we think that makes sense. and done.ssibly one one highlight in the data was the pick up an activity when it comes to construction. is that going to be something and a buildup in momentum? john: it's too early to tell. we are seeing housing prices and sales pick up. few has been going on for a months now. but usually, there is a lag before that bleeds through to

construction or real estate investment. it will probably be the end of the year before we see that reflected in the data. yvonne: a lot of interesting things coming around from the powwow they wrapped up last week. the one child policy, this historic role. what are the applications of this? can we reverse the aging population? all, the agin population is a good thing because it means people are living longer. that needs to be stressed. i think people are worried about the dependency ratio, the number of people who are retired relative to the number of people who are working. i think that is a challenge not just for china, but for many countries and the rest of the world. i think part of the solution is morelow people to have children, but in the short run, that is not going to have a huge

impact. the longer-term challenge is to make sure people can feel .omfortable working for longer the aging population could live longer which means they could tap into their savings and help shift china to a consumption-based economy. do you agree with that? john: there are so many things that can affect savings rates and the aging population. would expect the savings rate, which is still very high and china, to gradually come down. yvonne: appreciate your insight. yahoo! japany could be one of the day's big market movers. our borders make their stock picks -- our reporters make their stock picks when first up returns. ♪

yvonne: welcome back. the bank of japan has denied to debate after its shortest 12icy meeting in years. the governor said they have plenty of time to discuss policy and to look ahead. theirlso pushed back of target date for 2% inflation. >> falling energy prices is the biggest factor for us to delay the inflation target, but slower growth in this fiscal year due to the demand from the u.s. and emerging markets is another .eason while prices continue to be on a rising trend, we expect jobs and wages to improve further. yvonne: singapore futures are down 1.3%. to the nikkei 225 closing .8%

up. welcome to the stock exchange. we are taking a look ahead to the opens in japan and south korea, and our intrepid reporters are here to tell us what stocks they are keeping an eye on. pastam looking to regain glory. >> he had a couple of wins. >> the company i am watching in japan is a ceramics maker. they intend to buy back 3.2% of shares. over ¥1800 of at profit. way i could lose today is if the stock did not trade. he is going big. >> that is bold.

go for it. >> yahoo! japan has come through with its profit. up 87%. operating profit rose 60%. both of these above expectations. buys, 11 holds, two cells on the terminal. expect that stock to do well today. >> that's a good looking chart. >> it is a nice chart. good times for yahoo! japan. >> good chart work. i waited all weekend to see a chart like that. [laughter] yvonne: sarcasm losing out of everyone this monday. >> who watches television in south korea? television is very popular in south korea. of course, bloomberg is, but there are many channels there and many tv operators. cj hellos going to buy

vision. a 30% stake will be bought by s k tell telecom. we live in a pick and choose world. love or like? naughty or nice? calm or bright? but at bedtime ...why settle for this? enter sleep number. don't miss the semiannual sale going on now! sleepiq technology tells you how you slept and what adjustments you can make. she likes the bed soft. he's more hardcore. so your sleep goes from good to great to wow! gift the best sleep of your life to your whole family. only at a sleep number store. right now save $500 on the veteran's day special edition mattress with sleepiq technology. know better sleep with sleep number.

angie: still slowing. the latest data from china shows reflect a that shows factory floor productivity slowing. the market seems barely interested. welcome. the come live from our asia and headquarters in hong kong. i am standing in for angie lau.

further weakness in the manufacturing sector. this figure shows contraction for a third consecutive month. i've been away for a couple of weeks, i come back, and it is the same story. i managed slowdown of the chinese economy. no panic yet, but they have had cut since last november. there is concern. .his is illustrated here three straight months of construction. manufactures have in struggling because of the decreasing inflationary pressures. look at this. 49.8. some economists say following that growth in the third quarter

will create a pickup. they want to reach that target. interestingly, because of this switch over from the manufacturing base model to a we had-based economy, this out yesterday, and it was the weakest since 2008. 58.1. the weakest in six or seven years. pmi is more than services. it is banking, it is construction. is that the construction new orders jumped 5.9% last month. export orders, that is the concern. is declining, again. these construction activities could be a sign of something.

sincerate cuts, six november. are we not seeing them triple into the economy -- trickle into the economy? the smaller enterprises are still struggling. this is illustrated by the .pcoming pmi results this is a private survey, a smaller sector of factors. do we have that? there is. look at that. 47.6.h nine of the last 10 months, it has been in contraction. thatan rightfully say are in smaller factors contraction. there is a rising probability of

a further basis point reduction in the lending rates and more cuts to the rrr. all of this is in the markets this morning. let's go to juliet. juliet: not the brightest trading week. there are concerns about the continuing slowdown. not a great showing from wall street, either. 1.5%, japan is weighing on the index. is in the red. that was the slowest growth in six years. new zealand is pretty flat. on theseeing a pickup --

we will be watching china in reaction to the data coming out this morning. the pmi number we had yesterday and also the fact that china did well and so did india. in australia, there have been reports that the ceo of channel nine is going to be leaving deposition to be replaced by a board director and veteran. all the stocks are higher in australia. they are leading the gains. if we look at nine entertainment, it is up by .7%. japanese stocks are in the red this morning. we're seeing a pickup in the yen, which goes in the opposite direction. .1%.s up by there has been focused on the us

trillion dollar. dollars are saying the usd.ing to get near $.72 the dollar has had a spike in $.71ast hour, holding at usd. yvonne: the expectations for the rise in third-quarter profits. dbs says they had income growth million. we will be watching the world's biggest lender, when hong kong opens later. their profit rose more than half a percent last quarter.

at one point, they were .44% of total credit. at the end of1.4% june. the ici broke a record. 12% to 400 anded $70 million -- $470 million. we did see high borrowing costs that wait on the lender. there was a 25% increase in domestic detail loans. is planning to sell a 9% stake in its insurance you did -- insurance unit to raise capital. down 2/3 of the percent at westpac. paul is in sydney. paul, not strong from an australian bank. the market has been tepid.

what is going on. paul: that's the way with australian stocks. america tends to expect great things. anything less than stunning results get a shrug. last week, as we saw with the other banks, the at headliners -- of the headliners at terrific growth. -- last week, as we saw with the other banks, the headliners had a terrific growth but, this is the slowest growth since 2009. rises 2012. first the other thing you have to remember when checking the stock price in this context is a lot of this is for shadowed ahead of -- foreshadowed ahead of today's announcement. shareholders will still get a dividend.

yvonne: we are talking out to the reserve bank. opinion has been split over whether we might see a cut. paul: it is very much a wide meeting tomorrow. stephen king thinks the rba will hold at 2%. hsbc.ncludes ubs and a swap starter there. there might be a cut. it will be a very interesting meeting of the rba. as the months where on, the economists think a cap is likely. by the time february will surround, economists think we will be down 1.75%. growth is sluggish after the end of the mining infrastructure boom. thanks are raising mortgage

rates which is tightening consumer spending. inflation, as we have seen, is very benign. there is still scope for the rba to cut if they would like to. dollar --ustralian weak australian dollar is certainly doing a lot of work. denied japan has stifling debate after its worst policy meeting in years. discussione briefest since october 2003. even so, the chairman says they had 20 a time. boj pushback its target date for inflation. >> the fall in energy prices is the biggest factor for us. slower growth in this fiscal year, due to the command of the u.s. and emerging markets, was another reason. the prices continue to be on a rising trend.

we expect the jobs and wages to improve. yvonne: up next, the slippery slope. oil dips after three straight gains. we will talk to one of the most respected energy market authorities.

yvonne: russia's aviation officials say the airliner that crashed on saturday appears to have broken up in midair. if scattered debris over more than eight kilometers. a metric that airbus -- a metro jet airbus shattered. all 224 people were killed. dismissed ant has claim from isis that they brought the airliner down in blamed technical problems. turkey's ruling party has come back to power.

it took 49% of the vote. turkey has resumed its war against kurdish separatists and suffered a wave of terrorist attack. investors jumped on the optimism of political stability. a big campaign rally has been scheduled ahead of next week's campaign. people gathered on the outskirts of yang gone-- the mlb one the last election in the 1980's-- let's check on how oil is doing this point. oil fell three quarters of a

percent. that's after three straight games. in the u.s.f rigs slumped. analysts believe oil production will fall in the months ahead as analysts respond to the wheat market -- weak market. weto dr. -- we now speak to dr. gary ross. he joins us live from singapore. it is a pleasure to have you here first. you say directionally we are seeing some improvement. we finally seen the impacts of these massive breakdowns from oil companies, reductions in drilling? this is coming through? dr. ross: we've had a year of low prices.

we are seeing a chunk of it soft and declined. in the next month, november really, we are going to see your on your declines. year declines. the balance is our directionally tightening. we have a window of strength here over the next few months. depending on what kind of weather we enough happening, i think the fact of the market is short-term rallying makes sense to me. this rally likely has legs to it. yvonne: where do you see it going? you have predicted it before, that we could possibly see oil heading back to $100 per barrel in just five years. what is the timeline? dr. ross: five years is a long time. [laughter] dr. ross: we're down to 48. i think we will move up to $50

sustainably. that depends on el niño and the winter weather we end up getting. iran will return. momentum on the supply side has slowed. are going to see year on year declines for non-opec growth. yes production has declined. -- u.s. production has declined. from opec has been a million barrels per day, and now it is dropping. over the next six or nine months, where is opec's growth and of the from? iran, and iraq potentially. together, i don't think you can expect more than half a million bills from them day. iraq's southern exports came

down significant versus the number they were expecting. the demand is strong. we are up 1.8 million barrels a day. suddenly, prices come down. sure enough, demand skyrockets. it is going to continue. it is going to continue to be strong and swear. ice works -- strong next year. this price works. yvonne: do you think we have seen the worst everof rate closures? dr. ross: recounts will come down. the industry has to live within its means, particularly shell. they are spending more than their net. i think recounts will continue to come down. it will come down until prices stabilize and move back here to

. then, it will take nine months to a year for price to signal supply. price will have to signal supply. there is a huge amount of lag time in the business, and prices are going to have to respond. now.'s a window they ran will have to come back. prices will respond to bring back those rigs, or we will not have enough supply in 2016, 2017. the prices we have surely tightening global market. or later, it is inevitable. prices will have to signal. we need more supply. the question is, when? seasonally, financial guys want to be more loyal.

we are getting a rally. we can get a nice, sizable rally. longer-term, the fundamental is going to pick up the must have higher prices. best pickup. --must have higher prices. the prices are going to pick up. he must have higher prices. more headlines, coming up nex.

juliette: the yuan is expected to shrug off today's p my data -- p mmi data. gains--go up three spots. 326. chinese officials are unfazed by record flow. they're considering a trial program which will allow residents to buy assets directly . dollar is lower. the head of the manufacturing survey-- xperts say it will

likely reach $.72 today. --st economists are expecting there is one currency we don't talk about everyday. ra -- turkey's lira. it rose today. they gained 3.8% last month. that was the biggest month since january 2012. let's see how currency is averaging. we will talk about how the aussie dollar is weighing against the greenback.

the japanese yen is actually strengthening today. you can see the yen is about the of 1% higher against dollar. those of the stories driving the market. the latest official data more gain in revenue fell than expected, despite an intensity -- anticipated visit a spike in macau. we are not out of the woods yet, are we? a 28%were expecting decline. macau has been operating at a lower trajectory compared to years back. this is the five-year chart of the monthly gain in revenue. oregon, it was raking in

$4.5 billion -- it was raking in more than $4.5 billion. now, it is more than a billion dollars less than last year. the silver lining is that it is no longer following 30%. the visitor arrivals, let's make it clear. they are not spending as much. we don't of how much they spend outside of gambling. it was a little higher, visitor arrivals. both the golden week holidays , or 17% in all of october. it could've been higher. this was the strongest to hit china october. confident, --

no one was confident. macau is alll in about trying to diversify the revenue, which will not make up for the drop in vfp and family revenue -- vip and gambling revenue. it is what the government wants. yvonne: we'll see what the casino stocks do. coming up next, exerting influence. we look at how family-run theiries are drilling power in south korea. you are lookin

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happy monday. we are here in hong kong. we are at the opening of treating here. you are watching "first up." ♪ yvonne: the top stories this hour. china's manufacturing sector issuing further signs of weakness. this is the third straight msci.g below 50 for the

shares are falling in sydney after they announced a three percent rise in cash profits. a record for the australian bank, but the slowest profit rise since 2009. shareholders--y macau revenue fell for the 17th straight month, despite an increase in bidders over the golden week. revenue was down 8.4% in october -- 28.4% in october. we have seen earnings tumble since mid-2014 due to the anticorruption campaign and slowing economy. breaking news out of australia. building approval for september rising 2% for the month on year. it is up 21.4%. i'm seeing a little improvement

there. that's all ahead of the big central-bank meeting. more on that decision. it's look at markets trading in the asia pacific. the s&p asx is down 1% right now. let's go to the top story. factory output in china issuing a contraction for a third straight month. we were talking earlier. this is the same story, right? stephen: even after all of the

policy and rate cuts, it isn't gaining traction. the manufacturing sector is seeing-- this really demonstrates how difficult the transition is. yvonne: are we seeing signs of global growth? that it has faltered? edna: there transitioning. -- they are transitioning. we have a week global economy. -- weak global economy. you have to look at the global story. it is a weeweak picture. yvonne: what does this mean for the pboc index? edna: there's a feeling among

economists that it may come back again. we have to look at lending data. there will be a pickup and loans, credit demand. they're getting traction. that might keep them on the sidelines. if not, they will come in-- the forget, the government is also they're pushing infrastructure spending. they're working together. thank you so mucmuch. let's look at the top corporate stories. >> reports from japan say volkswagen sales are lower than a year ago. 2400ehicle sales slowed to following the emissions scandal. in japan, andfect the controversy has affected its image. they have lost the global sales lead to toyota. the commonwealth ceo has decided he will step down.

he was given the option to extend his contract between -- contract to october 2016 and has decided not to. he is the fourth european banking ceo to announce he is going to leave his role in the last year. ipo is said to have raised $811 million. other financial firms in china have helped boost hong kong's ipo volume by 46% from the same. last year. -- same period last year. yvonne: linning kong glamorous : these companies are tightly controlled by families.

tim, good morning. i looked at a little bit of your research. this map is really complicated. layers. tim: this is interesting and timely to look into given the transaction announced this weekend. the have looked into the chaebol s given the new data that are global colleagues have created for us. samsung is a good case in point. this is the interconnection between more than 60 affiliates and 17 public companies within the samsung chaebol. the pink boxes you see dotted our public companies. the blue boxes are private affiliates. over the weekend, you may have seen an announcement about

another one of the chaebols making an acquisition of samsung fine chemicals. if you zoom in and take a look, you can see samsung fine chemicals here. all these lines that come in a related to other samsung entities that own a piece of samsung fine chemicals. this one happens to go to samsung electronics, etc. this is an interesting case in point of being a pull together who owns what within this, which goes to the issue of the families. top, they really control some of these big empires of companies with small relative stakes in the big entities. it's a fascinating story. yvonne: it is. how do they perform operationally? is the family control actually good or bad for revenue growth and profits? tim: that's the $64,000

question. the answer is, it is mixed. if you look at these nine companies, there are more chaebols than this, but if you look at these nine, they are enormous. the market cap. on a sales growth basis, we compare it to the median of these nine. %. is about 4.5 6.5%.i asia is sales growth is slower. the same thing is true if we look at operating margins, return on equity. this group of company on a median basis is performing a little less well than some of those benchmarks. yvonne: there's the view that these conglomerates trade at a discount. s do?at what chaebol

tim: if you look at these nine, there is a discount. discount, aaebol conglomerate discount. areprice earnings 11.5 versus 14.5 from the chaebol to the msci asia. they certainly stand out. there are some that are more severely discounted. complicated. things are clarion some of that. you so much. in asia, what is the odds of an rba interest cut?

only 11 of 28 economists we spoke to a betting on glenn belows cutting rates 2.8%. wednesday was tokyo's most anticipated day in years. also on wednesday, results from honda. last week's tokyo motor show is dominated by green technology. hundred and its rival toyota are betting on hydrogen as the fuel of the future -- honda and its rival toyota are betting on hydrogen as the fuel of the future. hanoi's biggest trading partner.

arrives at a time of disputed oil in the south china seas. she goes to singapore afterwards. big week reported in the u.s.. we hear from janet yellen. here's a look at what we are watching. we will continue to focus on the latest economic data and whether or not interest december as policy members tended to indicate in the most recent fed statement. and, corporate earnings. we are looking at the outlook that these companies give. economistsr front, surveyed by bloomberg say employers probably added fewer than 200,000 workers for a third month this october. service jobs are expected to gloat the -- to grow at the

slowest rate in four months. struggling with slowing foreign sales and the struggling u.s. dollar. the u.s. trade deficit is now tighten after whitening in august. in august. reporting.bs a automakers will be posting sales for october. various policy members will be making speeches, likely to make headlines. janet yellen gives testimony before u.s. lawmakers on wednesday with respect to the federal reserve's supervision and regulation of the financial system. yvonne: before we had to the martian" is still

the top film at the box office despite opening five weeks ago. it remains number one in north america. it generated $11 million over the halloween weekend, beating cooper'sradley burnt. china, south korea, and japan set aside their differences to pledge corporation and trade security. more on that, when we return. ♪

yvonne: welcome back. china, south korea, and japan have put tensions aside for the time being and are working together to promote growth. the leaders made a pledge after the first trilateral talks in three years. we could isabel reynolds.

she is an seal for us this morning. good morning. what have they achieved? looks: so far, it surprisingly positive. they agreed on a very comp intensive -- comprehensive statement. it covers everything you can imagine. climate change, the environment, disaster relief. it included a trade agreements that will cover 20% of the world's economy. strong statements about north korea. they're putting up a united front on north korea's missile program. these backd to put on annual footing, so next year, japan will host the summit.

li willpark and premier be heading to japan. you talk about the animosity. what about the issues that have strained relations between japan and its neighbors? isabel: it's interesting to see. 've been skipped over in public statements about the meetings. there is a very conscious decision to put these behind-the-scenes. the island disputes. the disputes about history. talking about it in a more discreet fashion. the prime minister is not a popular figure. there is a degree of risk that she would even make this

decision at this point. at this point, it is more important to get ahead on security and make it less of a big deal, these disagreements. yvonne: putting history aside. much. you so attacks inf violent the west bank. three were hurt when a palestinian man rammed his car into a group of pedestrians. 11 israelis have been killed in palestinian attacks. 68 palestinians have died by iris ailey -- by israeli gunfire. the explosion on moldethe boatvian president's

last month is now reported to because m -- two because by bomb. caused by a really is one of four atheist bloggers-- to maintainedged spending on infrastructure as it looks to boost growth. critics are concerned the government will have to cut back to meet its deficit targets. the junior finance minister says there is no need. he says he is confident the government will succeed. revenues are running very

strong right now. it is a little below where we would like it to be. have a little more of the fiscal year to go. we think when we combine all these different elements and look at the expenditure side, we have just enough to work with that we can-- >> you will get there? jayant: we're confident we will meet the 3.9% fiscal deficit target. that the worst of days of the rupee are behind us? jayant: it reflects the macro

economic stability we have been able to achieve in the last 18 months with the government. inn we came to parliament 2014, you know, the macroeconomic indicators were flashing red. in policy moves we undertook the downturn in the commodity markets, we have been able to restore stability to the macro economy. all of the indicators are flashing green. it is the rupee that is showing that. unlike many other currencies ruled by the volatility in the upee isy markets, the r an island of stability. on the show,ahead a couple of japanese companies are on our radar following some earnings. first up, back in two minutes.

♪ yvonne: welcome to the stock exchange. let's check on what reporters are watching with trading underway in asia. monday?een a happy >> very happy. just a minute. yvonne: you only have two minutes. >> the first win of the month. >>. who is having its biggest decline since march of 2010. it has fallen 19 months. about thise worried forecast. we are seeing quite a bit of a fall coming from them. any other day.

not today. david: i expected the bigger fall from telecom. telecomarrival broadband operator in south korea. i wanted to put up the owners of television. --it'ssociate company completed. -- complicated. what's the big take away today? [indiscernible] ♪

yvonne: we are here with a look at what is coming up. >> these numbers just keep coming up. start the month. we have got the manufacturing coming. as a contraction. this is all indicative of overcapacity, excess capacity, and also inventory buildup. looking at what is going on in the talks taking place at the moment, there we go. we have japan. yvonne: moderately which. >> we are all playing a happy family here. kim jong-un will be looking at this closely.

people are not visiting macau to gamble as much. yvonne: trending business, coming up next. we live in a pick and choose world.

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♪ here's a look at the losing start. japan is driving the benchmark down. is down 1.5%. they're still faltering.