tv Trending Business Bloomberg November 9, 2015 9:00pm-10:01pm EST
trimming its global forecast for the second time in three months, saying emerging markets is a key source of uncertainty. you can get the day's top stories by following me on twitter. the session is getting underway in jakarta but it is a sea of re d. all making this part of the world now. thed: asia simply extending compliance we have seen over the past 24 hours and into the u.s. overnight. 30 minutes into the session for china and manila. first pointing out it is a sea of red. inflation was up by china which will be fleshed out in a moment. we have data coming out of japan. still in surplus, but a little more narrow than expected by
$5.5 billion. the macro story in japan is you have the weak japanese yen. that is doing more to offset the outflows of foreign currency to buy cheap oil. we are down about 7/10 of 1%. the biggest decline -- not a single one, last i checked. bottom three, we don't have it on the way up. shares declining in hong kong. usually, that is what we see in terms of earnings. shares under pressure. kasido shares, consumer services, the chinese bank, insurers and the tech names here. let's get it fleshed out for you. down 1.5%.
fx markets, nothing really noted. it is pretty flat. it is close to a sevent -month high which indicate something might happen in december. 70% chance. back to you. rishaad: looking at the inflations, beijing had recent news 30 minutes ago. the health of this huge economy. zeb: these are trouble sometimes. but the indicators rather than inflation, deflationary pressures are creeping -- rearing their ugly head in the chinese economy. consumer prices eased off of it. that was the consensus forecast. the number was a 1.3% advantage for consumer prices which compares with 1.6% in september. our survey called for 1.5%. you can see weakness. consumer prices not necessarily where the market expected them to the.
producer prices a big concern because this streak of negative readings is at 44 months. you can see producer price index, just as expected at 5.9% decline, just as it was in september. the market expected that. these lingering deflation risks are a key concern for the chinese economy. you put them together with the dismal trade data we had over the weekend, select data points in recent weeks that underscore this chinese slowdown. it presents a worrisome picture. that is why you see some of the moves in market. whether you see as the glass is half full, or half empty, this indicates further stimulus is likely to come down the pipe and on the physical side from the authorities in beijing. it underscores the need to recalibrate these plans. as you well know, the delicate balance here is extending credit to the economy at a pace it
needs in china, but certainly not doing so at a pace that it creates a bigger debt heache down the line. it is a very careful balancing act and one we will follow very closely. it is deflationary risk and the latest dismal trade data complicates the picture of when china's economy may post meaningful rebound. rishaad: thank you. let's have a look at other stories we are watching. any is a look -- a comp fighting for survival in japan. here's jeanette. >> things seem to be going bad bad to worse for takata. the recall in the u.s. could widen even further. several automakers are believed to be among those still using the takata airbags. a dozen carmakers and 19 million vehicles have already been effective.
honda, toyota, nissan have declared they will no longer use the inflator's in their new models. takata shares plunged 40% last year alone. you can see the big drop. that was the steepest weekly decline on record. acquire australian port operator is heating up. a counter offer to acquire the company for $6.3 billion which is higher than a rival bid by brookfield asset management. asciano continues to recommend brookfield's offer. they agreed to buy it in cash and stocks, but they put together a 20% stake, saying the group intended to match the offer. asciano shares surging in sydney today. not a bad rise, up by more
than 49%. just over 200 hours of until india's biggest airline makes his move on the mobile stock exchange. sales in parent into global aviation will start trading. the initial pricing at indigo was more than $4.2 billion. it is the biggest ipo since 2012. it could become one its biggest shareholders. the ceo says the airline was to invest up to 49% if allowed after the listing. they didn't take a stake initially because indian authorities have restrictions on airlines taking part. it is one to watch later today. rishaad: thank you. the australian software designer announcing its intention to go public in the u.s. let's find out more about the company and its strategy with paul allen.
paul: it is a back story. .hey were founded in 2002 they funded their company using a credit card. look at them now. they have 400 staff and combined, the founders are worth an estimated $2.3 billion. the company itself is valued at $3.3 billion. last year, it was over $300 million and they have a pretty impressive list of customers. bc.y have tesla, nasa, hs i have more than 50,000 large customers, 375,000 small ones. every month, 5 million people use one of their apps. it is always been a question on when rather than if. now we have their answer. they will have an ipo in the u.s.
as for the timing and pricing, that is still unknown. we have to wait a little while longer to find out that information. discover that they will float in the united states. rishaad: thank you, paul. on our website, looking at retailers from the u.s. and the u.k. getting in on china's annual shopping bonanza. $9 billion gets spent in 24 hours. go to bloomberg.com/asia. coming up on the show, south korea's one big startup. its tradition and wanting to revive the economy. china's challenge as we go through the inflation numbers. trending business is back in a couple of minutes. ♪
trending business. raisingflation is warning signs adding more weight to the call for stimulus. let's get more with -- thank you for coming. you saw the numbers. i guess this is more and more benign inflation heading towards deflationary risk. how big of a risk is it? west: if you look at ppi, have seen 44 consecutive months of decline. the first three quarters has seen negative territory. we can mark china in a deflation territory already. going forward, there is no monetary policy. we have to ease further more. but, under the rate cuts by the limited draw, especially when china is facing large capital outflow, it can be cap to more
aggressively. i would like to mention they would have to focus on the effectiveness of china's monetary policy. that is perhaps they need to encourage market development. firms can tap into cheap funding for financing, especially in china's bond market. we have observed when interest rate is cut, it eases. rishaad: it is more targeted. in order to avoid deflation, what needs to be done? it is something japan has grappled with with limited or any success. china probably could not learn much from tokyo. liu: in the next two years, china will have to deal with deflation. if they can engage in faster structure reform such as engaging in other debt -- meaning state owned enterprises
will have to engage in privatization, local governments can sell down their ownership of the state owned companies and also commercial banks, then this type of policy will mitigate the severeness of china's deflation and the slowdown of the economy. i don't think this policy will change, transform china's economy in the next two years because of structural imbalances. too big to overcome in two years. rishaad: i had a guest on earlier and he was saying what is really important to get money supply up. the most basic level of money. now, we have 3.7% increase in that for the end of september which is up from 1.8% in august. that would suggest this most basic measure is creeping up and
that has got to be a good thing. liu: yes. if you look at the structural side of factors, given deflation, investment and incentives, we would be very limited. this is a short-lived phenomenon. a wideris to create economy. perhaps the recent ipo reopening is a very good policy so chinese firms, especially those high tech firms, can cap the market from financing. this innovative service based, the new economy to grow faster while chinese government can deal with the old economy. allowing those overcapacity firms to engage in restructuring and even led them to go under -- let them to go under.
privatization should be allowed to go faster. rishaad: these reforms can be implemented but not overnight. they should be deployed sooner rather than later because there is a lagging effect. it takes time. liu: indeed. that is the reason we think overall if you look at china's economic growth over the next five years -- although the government is targeting 6.5% growth on average -- we think the economic in slowdown in the next two years because of huge debt. the growth will be way down despite all those were for measures. perhaps with two years, good reform, china's growth can pick up by 2018 and then start to move forward. we think next year china will have 6.4% growth.
2017, barely 6%. perhaps from that moment onward, the chinese economy can start to grow again. rishaad: liu, a lot of this data we have heard -- the global economy is slowing down. downrevising its forecast for the second time in three months. it is headwinds throughout this, not just what is going on with the transition taking place in the chinese economy. liu: that is right. we have already seen that in china's trade data. so far, the trade growth has been extremely disappointing. so, globally, rather than the u.s. economy is on a steady growth. big economies like europe or japan, china all slowing down. so, there is a risk that in the next couple of years, the world
will continue to see sluggish economic growth. rishaad: what is the impact on china? liu: we are definitely under pressure because it is a worrisome currency. if the u.s. currency were to willciate another 5%, it shoulder a lot of pressure. we think in the near term it is going to somewhat depreciate led by capital outflow. appreciating-term, currency mainly because if china were to be able to engage in structural reform, allowing soe's in hong kong and shanghai, that will attract income into china. rishaad: liu, always a pleasure
having you. thank you. >> time now for stories around the world. election results from myanmar shows the opposition on course for overwhelming victory. the national league for democracy says it has one 44 of 45 declared house seats in all 12 upper house seats. partylitary backed ruling admits it is losing more than it is winning. 67%.eeds at least parts of northeastern china have been smothered with pollution levels far above accepted norms. the u.s. consulate says he and 2.5 articles hit 900 on sunday. still above 300 and a later. environmental experts blame the coal-fired heating last week. admissionsn hospital
and the environment department says it is on a bad footing. more disruption at bali airports. airline hasn stopped all flights today and tomorrow despite hopes that operations will return to normal. it has been hit by ash and smoke by interrupting volcano. airport authorities were hoping for improvements, but they don't expect a resume flights before thursday. rishaad: up next, getting in on the action. some of the big-name retailers signing up for alibaba's day s ale. ♪
rishaad: i'm rishaad salamat. for you.oost reinforcing the case with the inclusion of the imf's market of reserve currency. the interest rate will be the second major currency to bypass conversion into the u.s. dollar and be directly exchange for yuan. the imf has to review it special rights. china's going shopping again. the waldorf-astoria hotel agreed lift for nearty
30% premium on the price. that is when the insurer announced it will be exploring a sale. it will include expansion into the u.s. group is on the way down about 1.4% overnight. yum brands facing more disappointed. the october sales in china have been deteriorating. last month, a string of new measures -- they included a new menu for pizza hut and kfc stores with high prices. yum shares on the way down. let's have a look at what is causing a stir at the month. shopping.going anybody that likes to shop on the internet. joining me on singles day. this is set to eclipse what we
have seen on cyber monday. thanksgiving day holiday. 11throw, the 11th of the and a massive online sale. $9 billion spent last year alone. >> not bad for a completely made up holiday. >> absolutely. it is couples day in hong kong, singles day in mainland china where everyone go shopping. people are saying -- the economists coming through with stats. money cannot buy you love but it can give you bargains in a single day. another user said no boyfriend, no problem. heidi, i understand you have a very important friend request pending. heidi: it is pending. i'm not hopeful will be excepted. president obama finally has a facebook account. eight on facebook about
hours ago and has had 400,000 likes so far. you cannot friend him. his first post, he took a walk around his backyard talking about the need for climate change. -- hed some very powerful has had some very powerful followers on facebook, including sheryl sandberg saying they are excited he has his own page. interested in the just for fun stuff. don't know if he will be playing farmville. -- weo have this comment also have this comment. ever.like every dad he is just like you and i, but his timeline is having things like being sworn in as president. julliiette: he will have a lot f time on his hands that here so that is why he is on facebook. rishaad: let's see what is going on with markets. hong kong, shanghai and japan.
we will show you singapore as well, they are close to public holidays. seng is really leading the pack. the shanghai composite and nikkei to 2225 is a little less. the composite is for tenths of 1% lower. this is the global selloff we have been seeing. u.s. nearout these zero borrowing costs. chinese stocks, japanese ones. up next, we looking at china's big bank and why they have been given a little bit of leeway on stability standards. ♪ the only way to get better is to challenge yourself,
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♪ rishaad: taking a look at our top stories. chinese consumers are waning in october while factory gate is signaling policymakers may need to hit the stimulus button once again. it is up again from a year ago. ppi, the factory gate numbers dropped 5.5% which represents the 44th straight month of being in red. inflation about half of the government's target despite interest rate cuts in the last year. japan's current was for the 15th consecutive month.
oil prices helping to boost. ¥1.5 trillion which is more narrow than what economists estimated. it could pspur investment and wage increases. stocks on the way down in the asia-pacific. six years near zero rate going to come to an end next month. shares are retreating from 11 year high in japan. more than 1%, ending a streak which saw it indicate it is ready to move before the end of the year. we do have a lot of trading in singapore. just for the moment in japan as they have their lunch break on the tokyo markets. here is david gauging the mood. david: it is certainly a decline. the markets have started. we're looking at the odds again. the rate hike about 70%.
not turning off investors, but not giving them certainty where interest rates go. 70% chance of a rate hike. time now for some of the movers here. let's start off in hong kong. nott to give you an idea -- on earnings, but where the price, the stock price goes from here. average price target is 175 across 45 analysts. citic pacific was cut. mtr was cut to sell. all of the subway systems. the price target for the stock is at 35.90. in japan, it closed before the lunch break. take a look at how the stocks are moving, driven by the changes. a good example would be fast
retailing. neutral at cut to 4.4% for joyo bank. this is an earnings board. forecast,eir profit targeting operating forecast. any are forecasting operating loss for funai. ¥1.6 billion profit. quite a bad day. hittings your head on a wall. a lot of movers. it is taking a hit. rishaad: china's inflationary ratings are increasing speculation that policymakers will add more inflation. our chief correspondent is with me now. deflation.deflation,
guest: it is a real risk now. when you consider the interest rate is at a record low and the other stimulus measures that we know about, yet they cannot get liftoff in those prices. at the very least, it is disappointing. rishaad: is it a distraction? edna: if you consider some of the drag down, it is by prices and oil. some have been dragged lower because of the signs. the pig effect is watching him now. some of it is cyclical. ppi on a was keeping nice path. those prices are washing out now so that is why ppi for nonfood prices came back quite a bit. some of the structural might correct itself. rishaad: now, what can they do to break the cycle? there is no clear blueprint.
it is aig call for fuher stimulus already. guest: there is, but they are not getting the traction. they are not getting the bang for their buck. the transition mechanism is not working. so it may self correct. if we see a pickup on the credit the, and loan data and falling oil prices which happened in the fourth quarter of last year, that washes through the system, then it will right itself. if it doesn't, they will cut rates and may do more beyond that. they may need to get more innovative in pushing the bond issues in the country. rishaad: thank you for that. the latest data coming out from the chinese economy. just looking at what is going on, we have the hsi at the moment falling back by 1.4%. let's take a look at the worlds
biggest banks that may need $1.2 trillion to meet the standards set by global watchdogs to avoid a repeat of what we saw in 2008. china lenders have the longest way to go. they have been given some breathing room. we are having a closer look. the chinese banks, they don't have enough to deal with at the moment. heidi: just sitting down and twiddling their thumbs. this is going on their to do list. chinese lenders, we were talking about the big lenders which are in the top four largest banks in the world. they actually make up 80% of that shortfall when it comes to the reserves that the board is asking global banks to set aside. because chinese banks are very heavily reliant on deposits unlike their western peers. they need to raise $290 billion
to try to make these new standards. they do have a few extra years to do that. the deadline could actually come a lot sooner if the countries bond market accelerates. as soon as he gets to over 55%, the deadline could come in sooner. 2028, isy, the 18% by a percentage of assets that can be written down to cover the current offers so they don't have to rely on others. rishaad: the problem is not just the chinese lenders, but these global banks that have to scramble to meet these new rules. the dangers are then they don't lend money because they are too busy shoring up their balance sheet and that creates a vicious circle. haidi: that is right. we were talking about the 30 biggest banks in the world under this regulation. it depends on what bank you are talking about. if you are talking about goldman sachs and jpmorgan, they were like a lot on high levels of debt.
they would not have to do much more to raise extra securities or issue new debt. if you are talking about wells fargo, that is another deposit reliant bank so they will be the one strangling -- scrambling. rishaad: is there any reason through for what you set for the average investor? isdi: some analysts say this something that you have to look at that. traditionally it is at the top of the food chain in case of bankruptcy, it gets paid off first. it has the potential to diminish the quality of debt in the worst-case scenario. rishaad: thank you for that, looking at banks at the moment that need to shore up their balance sheets. let's look at other stories we're following. there is a battle to acquire the australian port holder. making a counter offer to acquire it. billion, that is higher than the rival bid by brookfield asset management.
they continue to recommend that brookfield offer. it was back in august, they agreed to buy it, the last month they took a 20% stake saying the group intended to vote against the offer. shares are surging over 3%. ge has won the race to build a diesel locomotives in india. it is a $2.6 billion deal. it will invest $200 million in a factory and will be with a joint venture with indian railways. it can produce 1000 diesel locomotives in the next decade. saying his the parser looks more like a screenplay and should just be -- he was voiced to avoid bonuses of $200 million. he was bought out and his shares of blasters profit was withheld illegally.
they say it is groundless and amounted to reputational warfare. the odds of shorting a rate hike borrowingt the end of costs in the united states, prospectors did not unexpected it. dealing with the strength of its dollar. osbc chief economist catherine, american exporters are under pressure and the feds will be watching. >> it has already had an impact on some exporters. one of the pieces of research that has been done at the federal reserve is that the extent to which the decrease in exports or export competitiveness has greater implications for the u.s. economy and will last for longer than those earlier time periods because it is more important relative to the rest of the economy. that means the fed will be watching very carefully for the
extent to which the dollar goes higher. i think most of the money is already in place. the portfolio ri reallocation has happened last summer. the damages already been done so i don't think it will expect the fed's liftoff decisions. whether or not it affects the trajectory, they are very clear about it being a very gradual trajectory. suggested maybe it will not be as gradual or might have to suggest that next year the word gradual may have to come out of the statement. catherine: i doubt it. i think there are enough headwinds and the globalconomy that will affect -- that they will have to gradual. we will stick with the gradual. >> when you look at the next potential stock -- china and the fed -- are you worried the fed would have to reverse if they hike in december and what could it mean for implications for
mario draghi? catherine: the fed does not want to reverse. that is why they have been so careful about not moving too quickly. they want to make sure the u.s. economy is sound and the rest of the global economy can also bear any brunt. if there is not any movement in december, it will be because they don't think the time is right from the standpoint of the whole package. >so, i don't think it will affect mario draghi. i think he knows what he wants to do and his focus is on the european economy. the issue be faces is the other two components of policy, fiscal and structural, need to be in place for his policy to have traction. he made that very clear at the center of the speech he gave in june in portugal that he says, why i talking about structural policy, i'm a banker? he cannot get to a central target unless the economies adjust and it is about structural. rishaad: up next, a special
executive andrew mackenzie is due in brazil today to see the damage when two dams broke triggering deadly mudslides. three people are confirmed dead and at least 15 are still missing. the bank could cost $1 billion and an investor may not resume operations until 2019. shares in sydney have recovered slightly after hitting a seven-year low. australia needed extra police where the death of an escapee from an immigration detention center sparked a riot. the unrest began after the body
was found at the base of the cliff. inmates a security guards fled when violence broke out. the australian government says it is working to take control of the center from what it calls a group of criminals. australia is leading the call for russia to be banned from international athletics. a damning report alleging as state-sponsored doping program. athletics australia wants russia banned in that year's olympics because there is not time to prove the innocence. andreport says cover up abuse of performance-enhancing drugs. >> interference with doping controls on many occasions. not just in the past, but up to and including the middle of this year, well after it was known this investigation was underway. we have found coverups. disruption of samples. we have found payments of money
in order to conceal doping tests. south korea is hoping to give its economy a boost by putting its weight behind innovation. it want start is to ease its reliance on the traditional conglomerates, like cable. gangnamn went to the district to find out more. ♪ shery: this was the iconic hit that put the district on the map for the playground for the rich and famous. the right now, it is dancing to a different tune, drawing a crowd that is hungry and ambitious. the government is promoting the area as a startup hub, offering firms infrastructure and financial support. now the number of new businesses is increasing steadily, rising 12% in the first eight months of 2015. manyis just one of communal workspaces that have launched. they offer startups and investors not only a place to develop their business, but to
simply hang out. some critics point out quantity does not mean quality. >> the number of entrepreneurs as well as government support has increased, but the quality of startups has not improved much. shery: he is a venture capitalist. he says many of the startups cannot grow their profits because of the limits of the domestic market. technology and information firms make up only about 15% of all new businesses launched in august. these are considered key to economic growth as they have the potential to expand overseas. wai wearable is a startup that has global ambitious. tell us how this works. >> show me your hand. shery: you can feel a slight vibration. >> it is dry. you need moisturizer. shery: way banks on south korea's want for user products.
it assesses the user's skin and offers advice. the companies are chasing a piece of the action. way says it is getting $26.5 million for major firms such as cosmetic powerhouse pacific. >> i was cautious about cooperating with big firms, but the way they work so far, they are very cooperative and offer good advice. shery: many startups remained wary of south korea. the huge conglomerates have deeper pockets and deeper political connections which can make life difficult for a potential disruptor. hopes andn has high is optimistic about coexisting with korea's more traditional businesses. shery ahn, bloomberg. rishaad: we will check on the other headlines we are following. volkswagen will discuss savings with workers as the company is struggling with the emissions scandal. involvee agreed to
members and future planning. they have downgraded it by two notches. it is under fire for offering $1000 worth of vouchers and gift cards for affected coroners. the democratic senator is says it is in salting. talks of the airbag recall may widen further. the u.s. regulator says volkswagen, dodge, and tesla may be involved. they will still use takata's effective airbags with different insulators. the record recall involves 19 million vehicles. japan's toyota has cut its profit forecast for the third time this year. it is expecting $41 million till the end of december, which is less than the expected. toyo is dealing with charges
rishaad: deals are thin on the ground. airbus has failed to announce a single new water with boeing -- new order with boeing. the contract has been on the book for two years with the buyer undisclosed. we report from the emirates. reporter: gulf carriers like emirates and qatar airways had new plane orders. things are still digesting two years later.
it has been for 75 of boeing's. they actually disclosed jet airways india. the main focus of conversation has been on airport security in the wake of the sinai plane crash. the emirates president says even though all airport security capabilities are operated equally, he has no intention of canceling any. >> i think we are satisfied that the airport we operate meets the standards and procedures that we set ourselves internally for those airports. as a result of what happened, we will have to go back and ensure we were as wise as we thought we were when we made the original assessments. they are ongoing. as we go through the review, what happens if it was true the alleged device took down the aircraft, we would have to think how that could be prevented from happening at airports not just
in africa, egypt and everywhere across the planet. elliott: despite beefing up security, airports say passengers will not be affected. stay with airlines, india's biggest airline is preparing to make its debut on mumbai's stock exchange. let's go over to mumbai for the details. very good morning. >> good morning. airline indigo is pointing out having its debut on the exchanges today. raising about $464 million. investors scramble to buy india's biggest airline. strong profitability in one of the world's strongest markets. demand was particularly strong
amidst investors which placed orders a lot more than what was allotted. indigo aviation, the parent company, expects to see the company rising the stock at the range valuing the carrier at $4 billion, more than other airlines. the airline did just that. at a time when slumping costs has raise the outlook for budget airlines in india. indigo is expected to benefit the most as more indians are becoming well enough to fly and the carrier has outperformed its rivals and having a reputation by being on time. back to you. rishaad: thank you very much. buereua.lor for mumbai that is it for trending business. we will recap the biggest stories of the day, including
♪ announcer: from our studios in new york city, this is "charlie rose." charlie: dalton trumbo was the highest paid screenwriter during the 1940's. he was blacklisted by hollywood for nearly a decade after being accused of having communist ties. this did not stop him from writing the oscar-winning films, "roman holiday," and "the brave one." bryan cranston takes on the role of the famed screenwriter in the new film, "trumbo." the wall street journal said trends -- said princeton attacked thet.