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tv   Trending Business  Bloomberg  June 28, 2016 9:00pm-10:01pm EDT

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♪ wednesday, the 29th of june. i am rishaad salamat. this is "trending business". ♪ right, live in tokyo, singapore, and taipei. japan leading markets on the upside. taken to limit the fallout from brexit. europe demanding an urgent exit strategy from the u.k. prime minister meets
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, andank of japan policymakers are watching the market closely. do follow me on twitter at @rishaadtv. don't forget to use #trendingbusiness as well. china hong kong markets getting under in about 30 minutes. david is having a look at what is going on so four. -- so far. seoul, korea is the only market so far that has managed to hold onto gains. we are coming off that fiscal stimulus program announced yesterday, but it has come off its high. .ave a look at the asx 200 this one is about to erase all gain so far.
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they are strained banks and mining stocks keeping this afloat, but this is something to watch. the nikkei 225at . this one at the session low at the moment. a lot of that comes down to dollar-yen. have a look at this. 102.41 is your level. nothinghis meeting, new. basically a list of what they can do.
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they are watching the markets very closely. strengthen,inue to a signal from the market. dollar-yen still very strong. jp morgan looking at this pair and seeing a rebound in the making. we are looking at basically a technical bounce. 1.3842.k would be we are not close to that, but these of the levels to watch closely. equity markets looking like this. we are still looking at gains across the board in a ship.
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my mistake, with the exception of malaysia. tailwindeling a still from the u.s.. headed: written is for recession, according to a communist. -- britain is headed for recession, according to economists. campaign -- the leave , this is what some experts have to say. 71% think the u.k. will go into recession. that would be the first time since 2009.
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it was evenly split between who saw it happening this year and those who sought happening next year. out, the vote result came mark carney said the bank of england would do what is necessary to maintain stability. economists are saying that as a sign that the bank of england could step in with stimulus. eu leaders are starting to show their frustration with the u.k. summit,g a minister saying essentially that the u.k. was holding the european union hostage because of the situation. the german chancellor increasingly becoming a hardliner, saying the u.k. should not be cherry picking. she says things have to move
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forward regarding the exit. the president of the european commission also had this to say. understand ist that those who wanted to leave are totally unable to tell us what they want. all those having come pain for the leave tell us that we need some time. i thought that if you want to leave, you have a plan. they don't have it. the president of the european commission basically saying that you knew you might possibly leave, so why didn't you come up with a plan for that. theu.k. needs to start 50cess by evoking article before the two-year. starts. says that is up to
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his successor. as you can imagine, we will be having a detailed look at that story. we want your opinion. tweet us your thoughts and include #trendingbusiness. senior members of the bank of have thenpoliticians meeting to discuss the impact of brexit on the markets. >> the options available to the bank of japan and the government are on the table, but so far they have not been exercised.
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the management of japan's fx markets, which have more the brunt of safe haven demand. reiteratedinister what has been said over the past couple of days and directed his deputies to continue paying careful attention to the markets, saying the lack of clarity and risks remain. he told the finance minister to continue working with the g7 .inance ministers in the meantime, the boj governor saying that the boj can provide enough fx liquidity if needed, but he did say japanese banks have no problems with fx
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funding. the markets have calmed down somewhat in the short-term. japan retailime, sales numbers were unchanged month to month in may. it underscores the challenge that the prime minister faces and boozing spending and reviving the economy. dent asidence taking a these data points, on weaker and weaker, questioning the , andtiveness of abenomics that continues to tell the story of weaker demand, consumption, a suffering a con a economy. fair to say, brexit is adding to
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further heightened expectations that the boj will have to do something. rishaad: we will have a look at some other stories. it is immuneays from the stresses and strains of the crisis in europe. new zealand's finance minister reckons his country is better place than most to whether the effects on the economy. says they have positive growth and ability to cut interest rates further. zealand is in an "very small group of countries that could weather significant negative impact of the country following brexit." iceland, south korea, and weather theuld also outcome.
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sony shares are rising in tokyo after raising its full-year operating profit margin target. the target for gaming has been lifted. sony has cut its targets for devices. devices sales targets have been , and operating profit margin targets have been slashed. mobile sales targets have also been cut at sony. .hat is down operating profit margin targets have been cut as well. sony will also start a corporate venture fund next month and plans to develop a robot capable of forming an emotional bond.
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the turkish prime minister has linked islamic state to the attack at the airport. suicide bombers killed at least 36 people and wounded almost 150 others. attackers opened fire with an assault rifle before blowing himself up. the attacks happened at security checkpoints at entrances. turkey's air traffic control is back to normal. the national turkish airlines has suspended all flights until 8:00 a.m. local time wednesday. rishaad: coming up later, how the referendum revealed a conflict at the heart of europe's structure. , iga just as the next big risk is what european policymakers do right now. that is next. ♪
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we have a positive day when it comes to the equity session. we will have a look at the markets over all. let's start things off with what is going on the moment. vote in europe, does it represent a shock, or is it a potential genuine crisis? i think you are absolutely right, somewhere in between. at the moment, it is to early to tell if it will be a permanent shock to the market. 50 has beenticle invoked, all the discussions surrounding the brexit will be
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more politically driven than market-driven. you can see there is quite a bit of a leadership struggle within the u.k. as of now, it will still be a shock to the market. see volatilityly over the next week or so. rishaad: the thing is, what is going to be the catalyst? get thatt trying to article 50 through at the moment and presenting it to brussels. does that seem to be a prospect in the near future? are trying to come together with a model that will mitigate the impact of brexit. i think there are several ideas floating around. you have a norwegian model, where the u.k. can join the european economic area.
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but that in itself is also problematic because it still member to implement the rules of the eu, including free movement, which is something that people who voted brexit are unhappy about. criteria's oncter the people coming into the u.k., so probably this norwegian model is not going to be of interest among those people who are pro-brexit. rishaad: let's have a look at the impact of all this. we have seen how the money has rushed into the dollar and the yen. does this continue? >> there is still a lack of guidance and clarity on how the u.k. will proceed. risk aversion is the
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order of the day despite what we , where thevernight european and u.s. indices both rallied, gold coming back down, the sovereign bonds also coming back down, but risk aversion is still present in the market sentiment in the financial markets, so i think this short-term rally will not last too long. we will probably see a return to risk aversion in the coming sessions. rishaad: what are we talking about here? are we seeing further strength in the yen? other other currencies also likely to be impacted? >> in terms of currency, more strengthening in the yen is still problematic because investors are also fearing intervention from the boj, especially if the dollar-yen goes below 100.
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that fear it self is holding investors back from pushing the dollar-yen lower, so we probably need to see a catalyst, maybe more developments on how the u.k. will proceed before we see another large movement in the currency markets. all right, let's have a look at what it means for fed policy. that is the next event risk on the horizon. it's probably likely that janet yellen and company will do nothing. probabilityre's a at the moment being factored in that possibly we see a cut rather than a hike. according to the futures market, it seems the probability is possible from the fed. qe isopinion, another
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probably not going to do a lot more in terms of helping them markets mitigate against the .ffects of brexit itself should not be much of a solution. what i think is probably the response to all the risks from not, willtualized or be a coordinated action from the central banks of the world. i think the g7 itself, they have at least agreed not to intervene in the fx markets unless absolutely necessary. they will ensure liquidity and the financial system through additional easing in their monetary policy. rishaad: great talking to you. ig asia in singapore. >> the latest first word
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headlines. the uber ceo will appear in court 18 months after being indicted for running a taxi service deemed illegal in korea. he will deny the charges. 2014, he was accused of breaking the rules of transport services after launching uber x. adidas shares rose more than 2% after it signed an agreement to develop basketball and football in china. brands have been struggling to make an impact, however beijing has pledged 750 billion dollars in sports development over the next two years -- 10 years. has used a campaign speech to accuse china of stealing u.s. jobs. the presumptive republican nominee says he would pull america out of the transpacific
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partnership. donald trump promised to renegotiate nafta. this is bloomberg. theaad: coming up, one of most high-profile economists says volatility to be here to stay. that is next. ♪
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you are back with "trending business". the shock of the uk's decision has come at a time of global uncertainty.
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our next guest says markets will be volatile for quite a while. >> this is an episode of volatility. in this case, i think the uncertainty will be much longer. the u.k. will have to decide when to evoke article 50. there is not just the concerns about the united kingdom. there are questions about whether europe will integrate more or whether this will lead to the easing of integration over time. is also the question of the breakup of the united kingdom if scotland decides to go another way. growth andic earnings is slowing down. there are questions about chinese growth.
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abenomics in japan. time whenoccurs at a there are risks in the global economy, so i imagine the volatility would depend on policy response, the european union response to the shock, and implyr other developments improving conditions or worsening, but volatility will probably last for a while. well, on our website how chinese tourists are going on a shopping spree in london after this vote to leave the european union., a cracking read. south asia looking like this at the moment. the upside, those positive cues from wall street helping as well.
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that's what we have at the moment. looking like we could see a positive start in hong kong. up next line, the much anticipated about to get a boost from brexit? we are discussing that right here, next. ♪ get ready for the rio olympic games
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x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. ♪ rishaad: they look at our top stories, post-briggs bounds continues with commodities rising. post-brexit rebound continues rising.modities japanese bond yields continue to fall further. economists think the decision by the u.k. will see the economy
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slipped into recession. they expect the bank of england to add stimulus, including a third quarter interest rate cut. three explosions happened at security checkpoints at the entrance to the arrivals hall at a turkish airport. the airport remains closed. the pre-market looks like a little bit of a bounce in hong kong. shanghai also just coming on. seeing positivity, but are the gains muted? equities on the way up mostly. a rally cappedg at 1%. be where we are
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consolidating. a lot of that will depend on where japan and hong kong go. little pulldd a down, but a decent start. taiwan leading gains. japan as well. now, let's talk about the forex markets. weakness,seeing some 1.33 to the dollar here. 1.3121 was our low. it seems to be consolidating at these levels, a high of 132.
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it's not just falling against the dollar. it is also falling against the yen and the euro. some weakness in pound sterling. bit more behave when it comes to the emerging market fx. tied,ields, a change in u.s. 10 year bond was up, coming back down now. bs doing this. doing this. said the forecast of 2% as unlikely to be achieved given the fact that yields could 1.1% if risks to
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increase. talking about this inversion and the fed funds rate. it shows you the expectations of a fed cut. saying ist suisse is that it reflects markets, not exactly expectations. andut everything together look at the 30 year in japan, that has gone down significantly. it does reflect concerns over growth, which morgan stanley says has raised the possibility of a recession over the next 12 months. rishaad: it does seem that this vote could not have come at a worse time. bloomberg gadfly columnist, how bad is this move for the hedge fund industry? beene hedge funds have
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under pressure the whole year. one manager year, said he was appalled by the lack of talent. and are losing money left right. they were hit left and right last year because of the device way should and in the yuan. in february, there was a lot of volatility, hit by redemptions. and just as they were starting to recover, briggs it happened. the past six months, they are just getting act on top this year. it plunges right after brexit. a very narrow timeframe to make up those losses. of thentioned, part reason we are seeing a rally in risk assets is because a lot of the fund managers are buying up stuff
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because they don't want to be so high in cash holdings. they are putting that cash to work. that does not mean this is a sustained rally. athink this could just be relief rally, and i would not be surprised that things start moving down again in the third quarter. the readwhat is through here for the rest of the markets? hedge funds come to the end of the quarter, tomorrow is the key day where they will assess returns. this is what they will send to their shareholders, how much they made and how much they lost. then people will ask for their money. it takes a while. liquidates need to assets. the more to liquidate liquid stuff, gold, treasuries, investment bonds.
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you could see some of these risk aversion asset underperforming for a little while and the next few weeks because hedge funds are liquidating to pay back investors. rishaad: thanks very much indeed for that. right, a look at japan's favorite messaging app. it could be getting of host thanks to brexit. this ipo is still going ahead despite all the turmoil we are seeing in the markets. pricing was delayed by one day. they were going to come out with a pricing range on monday. dayay was the first full after brexit. it does seem like it will for mid julyduled
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in tokyo and new york. rishaad: what about the pricing here? a bit on the downside? they could've gotten a lot more a few years ago. could -- they could have gone through it a few years ago. despite all this concern and turmoil, the actual pricing ¥2700 to y3200. a lot of upside in the pricing range. it may sound weird or counterintuitive, but those who are shopping the ipo think they will get a good price. there is one burning question that i have for you. why would anyone want to invest
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in the ipo of another chat app? >> it's a good question. there is a lot of money that has been pulled out of the market. a lot of people are sitting on cash. thinkok at a chat app and aother chat app, but line has revenue model built in. they are actually creating quite a lot of revenue. line is it profitable at the moment, but there are expectations that they will move from the black into the red. thehave a chat app with
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business model, revenue, a way to make money, and a way to continue revenue growth. it is very popular in the markets where it exists. it is not popular globally toause they are restraint smaller markets, but if they get global reach, there is a lot of room for them to grow. rishaad: right, and look at li ka-shing. ,e is richer than george soros but wears a seiko watch rather than the rolexes preferred by his peers. colleague on why he likes it so much. >> can i ask you what time it is? can i see your watch? say?do your friends
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>> do your friends tease you about your watch? >> let me say.
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this is very fast. it is like half an hour fast. and it is also very light. very practical. rishaad: you can get more insight from asia's third richest man in his first major interview in four years in a bloomberg television special. right, up next, could brexit be an opportunity for japanese equities? our next guest think so. we are heading to tokyo. "trending business" continues. ♪
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>> welcome back. it is 9:43 a.m. in hong kong. these are the latest first word
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headlines. suicide bombers kill 36 people at istanbul's major airport and wounded 150 others. the turkish prime minister confirm the figure, while the justice minister says one of the three attackers opened fire with an assault rifle. the explosions happened at security check ports at the entrance to the arrivals hall. the airport remains close off lights in traffic. theirpublicans have ended $7 million two-year inquiry into the benghazi attack. no smoking gun pointing at hillary clinton. she was secretary of state one for americans, including ambassador chris stevens, died. clinton testified before the panel for nearly 11 hours. ikea is recalling 29 million dressers and chess in the u.s. after the death of six children. the consumer product safety commission says they can tip over, pending children to the floor.
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82 incidents have been reported. the 10thlosely held by richest person in the world. and are offering refunds free anchoring units. global news 24 hours a day powered by 2600 journalists and analysts and 120 countries. this is bloomberg. says thehow next guest vote in the u.k. to lead the eu showed the will of a silent majority and could see the catalyst to reforming europe's structure. he is president and chief executive of an asset management firm. thank you for joining us. let's talk about the silent majority. they weren't vertically senate last thursday with that vote coming through. what did it reveal more specifically for you? , like you, it was a very
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big surprise when that happened. i thought about it. the real economic consequences created up to the event. the direct consequence was the weakening of the sterling and also the euro. that will continue for a while. the japanese economy has dealt with this many times over the past two decades. the japanese corporations are well prepared for this type of event. whetherlem here is not they are prepared or not. the problem is they were too well prepared. the bank of japan and the prime minister had to open up a line. the japanesehis, authorities, including the boj, will face new challenges.
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they have to do very aggressive ofsures, probably the month july will be a very interesting time for us. rishaad: what about the silent majority, if there is a silent majority, in japan? what do they want? what did they say is going wrong with the japanese economy? well, certainly the biggest issue of this country of the past decade and a half is the deflation. when deflation continues, our public debt over gdp continues to worsen. i think we have gotten up to the limit. gdp, we have to do something. the only solution for this is to create the normal inflation. i think what is very well
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understood by our government and the central bank. i have to say this is the very first government, and also the central bank of japan, clearly aware of this issue. they will commit to induce the new set of normal inflation environment. so after this event, i don't think the policy will change. things will be unchanged. reallyld be convinced to look for the new opportunities in this country, which i think they are abundant, these opportunities. >> name some of them please, sir. if you look over the past decade or so, the companies that have been aggressive opening markets abroad made a very big success. those companies which opened up the market aggressively and very aggressive leadership.
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a local, casual wear store in , now it is ae ago global name. you can name it. there are many companies that made a really global brand over the past 10 years. i am sure that there are a lot of companies which can create power, brandd establishment, for the coming 10 years or so. i am very interested in confectionery companies in this country. when i look at the quality of companye of a japanese relative to european-make chocolate, quality wise, you cannot tell the different, though price, if you look at the per gram price, japanese companies product are
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1/10. people start finding these opportunities. -- anreates a norm us enormous increase in tourism. japanese tourists understand the value they can get for the price, and this trend will strengthen the trend we have been observing before this event. is that ine thing the old days japan would have been selling these products around the world. the thing is they are not doing products confectionery cheaper than elsewhere with equivalent quality. has japan lost its mojo? >> i could not get the last part of the question. mojo, it'sost its drive. well, confidence among the japanese corporate managers are
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start to being gained back. i have been interviewing many top management people. they have rebuilding the confidence that they can be very competitive, not only in this country, but also outside of this country abroad. those which are normally domestic companies, let's say, which are relatively not damaged, even during these turbulence, they start to gaining their confidence. they start understanding the opportunities outside of japan abroad, the demands are there. they are looking for better quality, lower price japanese products that they want to respond to the these demand and opportunities for japanese companies. i think it will be quite big, which we should analyze. rishaad: thank you so much for
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joining us this morning. up next, a team planning to develop football and basketball and china. we will tell you who that is, next. ♪
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to a shanghai investor, now part owner of an franchise, buying 5% of the minnesota timberwolves. 29-53 last season. is seenese part owner as raising the sports profile. details have yet to be released. intos extending its push
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china to develop football and basketball and sponsor an ironman triathlon. what do we know about this deal? investing in a rare commitment to china, seeing a strong growth market. adidas will help the chinese , investing $750 billion to create more sports and china. the adidas managing director of greater china says there are seeing more mass consumers wanting to buy their products. is this going to pay off for adidas?
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the experience of some other companies has not been exactly successful. a clampdown onen spending and luxury, but nike has been doing well in china. adidas believes it will do quite well. it's greater china sales in local currency grew 18% to $2.7 billion. revenue and shanghai a loan is the same as what they get from and hong kong. in germanres did well trade overnight, up 2%. bit worsee a little over the year, but they are starting to see a lot more interest as chinese are becoming more health conscience. ,ishaad: right, coming up sterling completing its worst quarter in seven years.
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we look at the prospects and light of britain's vote to leave the european union. advancing equities with the nikkei 225 trading 1.5% up. ♪
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♪ announcer: from our studios in new york city, this is "charlie rose." charlie: we continue this evening with our coverage of britain's exit from the european union. thursday's referendum decision has set off a chain of a series of consequences. the pound has fall be 88% again -- has fallen 11% against the dollar in just two days and the s and p has downgraded britain's credit rating. the dow fell another 1.7%. political unrest has also


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