tv Trending Business Bloomberg October 2, 2016 9:00pm-11:01pm EDT
>> -- heidi: it is monday the third of october. this is "trending business." we will be live in tokyo and singapore, but first, this is what we are watching this morning. slightly depressing start out of japan, the latest survey coming below expectations, and the outlook for businesses is subdued. it is a different story when it comes to china, with further signs of stability on the factories or -- on the factory floor. hasairbag maker takata
received investment offers from five suitors and is leaning toward three of them. you can let us know what you think of today's top stories by following me on twitter. don't forget to include the #trendingbusiness. a few markets, including china, off on golden week, malaysia also on holiday today. here is jerry with a look at what we can expect on asian trading. -- here is shery. said, china and malaysia are on holiday, also australia and korea. the market is trading at the moment are giving a boost to the benchmark. asian stock screening ground, reversing last week losses. new zealand reversing some of the losses earlier this morning, while the nikkei is up .9%. emerging markets had the best quarter since 2012, while taiwan is grinning ground,'s .7% -- taiwan is gaining ground .7%.
when it comes to japan, we are hearing this morning from goldman sachs that we might see more volatility in japanese market. incting to more volatility the u.s. market due to the u.s. elections. right now, we are seeing all sectors in the green, oil and gas smiley in the negative. goldman sacks analyst saying according to their analysis, and the last four presidential elections from the u.s., we saw japanese share prices underperform. that is a relative term because of that volatility is coming from the u.s. yen,a look at the japanese because it is unchanged at the moment, but still a bit weaker, weakening for five consecutive sessions of 100 and one. of course, this comes after the japanese yen saw its best quarterly gain in eight years. also, asia's top performer in the month of september. other analysts saying that the
monetary policy by japan right by tapering pursued of bond purchases, and they see weakness in the end of it difficult coming forward -- weakness in the yen difficult coming forward. heidi: some weakness coming through after the business sentiment surveys. largely holding up over the last three months even with the stronger yen. the editor brian fowler is covering this story. what do we see from this report in terms of strength and weaknesses? a little bit weaker across the board, but it wasn't alterable. brian: it is a mixed bag. as you said, we had some good signs, was holding steady on pace to go up by 6.3%. the index was largely steady. keep in mind that the fall was taken in the fallout of the brexit decision, and it was also amid the strong yen.
one other factor that we have not written about yet, and i haven't seen it everywhere, but the japan meteorological agency says that in the month of september, we saw the lowest amount of sunshine across japan since 1961. and in fact, in tokyo for two weeks, we had less than 13 hours of sunshine across 15 days. that has got to put a damper on spending, and it is probably going to hurt sentiment little bit. never underestimate the impact of a sunny day. heidi: never underestimate the impact of whether. we know that from looking at the u.s. economy as well. there are some splits between large and small companies in japan, also across the sectors manufacturing and services. brian: starting with the small versus large, these small companies are really going to be hurt by the strengthening of the yen.
that raises the cost of their procurement of raw materials. on the other hand, while the large companies will be heard in terms of exports, the theory is the smaller companies are going to be squeezed by the larger companies, which are their clients, their customers. past.as happened in the all things being equal, it is these smaller companies that tend to pay the cost of the rising yen. in terms of manufacturing versus nonmanufacturing, one of the biggest stories has been the tourism numbers. we have had record numbers of visitors to japan, consistently over the last year and a half. that pays is continuing, even with the yen where it is. that has been a big boost to the nonmanufacturing sector. , but it tiny fall back is still quite high compared to the manufacturing side. dayi: what is next for our economics?
brian: the fiscal spending has been announced, and that is expected to add a few points to gdp growth over the next year and a half or so as that spending makes its way through the economy. boj policy seems to have been laid out for us. there is a sense that the quantitative side has gone as far as it can go. it is pared back their expectations in terms of what they think they can achieve. we had a report earlier on saturday saying the boj is looking to consider cutting its cbi forecast for the next fiscal year. that retrieves may continue. tohink it is now up to abe take advantage of the fiscal spending, the boost we will get from that, and come through with some of the regulatory and structural change that we have needed all this time. i think you are right, the third arrow is the next big question, and we will see if he really puts his money where his mouth is on that. haidi: it is the hottest hour to get out there.
brian fowler, the managing editor coming to us from tokyo, digesting those latest hong kong numbers. the chinese economy is showing further signs of stability as the services industry expanded at the factory gauge studied at a two-year high. stephen engle has been looking at this going into golden week, feeling pretty good about this rebalancing. we have had a lot of targeted stimulus in particular in the property market. that has fed into this stabilization of the chinese economy throughout the summer. let's look at the factory gates first. services have been released that he, so i'm going to look at the factory first, even though it is a lesser part of the economy than in years past. you can see six out of the last seven months, we have seen 50 or above, meaning conditions are improving. july, a bit of an anomaly, the fractionally, 49.9. we are much better than we were in the beginning part of the year, when there was volatility. second month in a row above 50.
look at services. they rose to 53.7. this has been really, in addition to property, services industries -- banks, telecoms, real estate, new economy technology companies underpinning some of this growth. i want to look back on the factory gauge, because if you did down, brian fowler was talking about japan, the difference between large and small corporations -- there is an employment issue in china as well, where employment is still below 50. sentiment toward employment and hiring is still a concern. large corporations, they are taking up the bulk of new jobs. smaller companies are showing some weakness on the jobs front. haidi: possibly a warning indicator. you are talking about the property market bubble. they are doing something about it. the prices have really gotten out of control -- not out
of control yet, but they don't want it to get out of control. we have seen property prices rising the most in six years in august, shenzhen prices over 6% year-over-year. a number -- prices up to 60% year-over-year. a number of cities issuing curbs on property purchases. one is increasing down payments to 35%, the most. tianjin also banning locals from being second-home buyers, and a also tof other cities strengthen their curb. it looks as though they are moving from the fueling the recovery to kind of containing the risk. --di: and a string interesting that they are doing it on a citywide level as opposed to nationwide. stephen: the chinese property market is not one market, it is many different property market. you have to take it region by
region, city by city approach. haidi: concerns are coming through with those 70% year on year. thank you so much. less take a look at some of the other stories we are watching today. rosalind is here. deutsche bank is preparing to cut about 1000 jobs in germany. the losses will be part of the cost cuts announced last year. they are set to reach an agreement with labor executives this week. we are told the job cuts will mostly except back office stack -- the staff, like i.t. services. they reached an agreement to eliminate about 3000 full-time positions, including two and a half thousand at it i've it and client businesses, in its first round of talks. the bank is struggling to boost profitability, and there are concerns by mounting legal costs. lowsche attached a record last month after the u.s. justice department asked for $14 billion to settle investigations
into the sale of mortgage backed securities, or than twice what the door jet set aside for litigation. michalis taming revenue rose for a second straight month in september after more than two months of decline, and the growth beat expectations. to $2.3evenue grew billion, according to macau's gaming bureau, against the forecasts of rise of 4%. the growth has been helped by the opening of new projects, such as a resort in september and august. macau is the only place in china where casinos are legal. bloomberg sources say takata is leaning toward three bidders. the five suitors interested in buying are said to have offered between $1 billion and $2 billion. all five proposed bankruptcy, although two of them insist on
that option. we are told that makes their bids less favorable. to the talks are said to be ongoing, and it could be sometime for a buyer to be decided. haidi: thanks. coming up later, missing the mark. find out why global central-bank policy may have backfired. we are going to ask credit suisse what japan can do, if anything, to improve the economic outlook. this is bloomberg. ♪
haidi: the latest from japan, subdued forecast more downbeat than expected in the third quarter. the tankan comes after inflation fell for a third straight month, adding to evidence that the economy is telling. we will talk more about this with an economist from grizzlies. -- economist from credit suisse. it is not a complete disaster
when it comes to the japanese recovery, but if you take a look at how much they have put in, how much the bank of japan has overextended itself, these are not the returns they would be hoping to be yielding. guest: yeah, i think the economic policy, including monetary policy, has been trying to push out the japanese growth rate. while the economy is doing ok, i would say that the momentum of growth has now come down. for the moment, we are not expecting the economy to get into another recession, but in the meantime, we do not expect the growth rates pick up again, because of these appreciations, and also declining power of japanese consumers. haidi: if you take a look at the unwillingness of businesses to invest, to raise wages, the unwillingness of households to spend more, how much of this is to do with the legacy of
deflationary shadow that is being cast of the general mood when it comes to japan? guest: that is a very good question. i think the japanese businesses in general think that spending money on -- but in the meantime, we haven't yet seen any out shift of their behavior in terms of spending money on machinery at things, mainly because of the remaining moments of the currency and the remaining cyclical movements of sales. it is difficult for companies to continue to increase investments in this situation. wages, yes they are spending some money on wages, but in the meantime, structural forces are going on like the aging population. it is very difficult for companies to -- we are not getting stuck, but in the meantime, the economy is still suffering the description of forces and losing his momentum.
haidi: is set before the september boj decision that you thought a permanent commitment is what they needed to buy up half the boj market and commit to keeping some of it permanently. you also said you see helicopter money coming through next year. does this latest move by the boj, the new regime, suggest week as the helicopter money a little sooner? -- suggest we could see the helicopter money a little sooner? guest: the new regime is a step away from helicopter money. one big problem for them is that they have an abundance easing, and they have paper, but whether or not they are going to commit strongly to the monetization. of that kind of peace was not in their, and they are now -- without any meaningful
commitment to the helicopter money type of operation. the challenges for the boj to introduce a helicopter money type of policy in the future have come down. haidi: i suppose it is quite fascinating and worrying, the global ramification of the boj's unprecedented policy. take a look at correlations when it comes to japanese bonds, u.s., european bond markets, and the correlation is as high as we've ever seen it. does this concern you, this japanese effect is really a global one? absolutely the pace of papering the boj. if they do taper quickly, that could affect the japanese bond markets. and the u.s. and european markets, because of the money created by the boj is now at a fast pace.
boj has to consider the ramification on other markets when they do taper. and understanding tapering to be very gradual for the moment, because they do not want to give any disturbing impacts in other markets. haidi: is there inherently a conflict between targeting the yield curve and maintaining asset purchase? at one point or another, you would imagine these two mandates would conflict. policy has ak this power in tapping the yield. went in the expectation of inflation takes up and if the interest rates go up, they have some power to cap the interest rates. if the interest rates are coming , the ability to control interest rates is quite limited, or they have to go for a tapering the operation and reducing quantity. i think it is a very confusing message to the market, because you are trying to shrink the quantity of printed money.
in the meantime, you have to have the interest rates. bojmessage from here by the will be quite confusing, because rate cuts and reduction of quantity. markets could be really hobbled by this action going forward. markets in general, including bond markets, equity markets -- haidi: we will have to leave it there, but great to have those insights. that was the chief economist at credit suisse. twoick check of headlines, life insurance companies have formed a new asset management company with a combined $5 trillion in assets, asia's biggest. they officially open the business on saturday. the company plans to break into the global top 15 by doubling its assets under management. they also back to the boj's current policy direction.
shares of japan's largest retailer have jumped in tokyo despite saturday nights slashing its profit forecast. they see four-year net income falling to a six year low of about $790 million. they have been struggling to revive the company after power struggles, and he missed his deadline to deliver a recovery plan within 100 days of taking over. k&d has been named as a distribution partner in myanmar. it is described as one of the country's top i.t. distribution businesses. myanmar is a rapidly growing market. penetration has grown from about 7% almost 90%. coming up, singapore sounds a warning about tensions in the south china sea. we will take a look at the issues, up next. this is bloomberg. ♪
haidi: singapore says the greatest risk of a clash in the south china sea comes from nonmilitary shipping. it says the reliance on fishing boats could start territorial claims of the disputed area. of snow to our southeast asia correspondent haslinda amin. this is a practical concern when it comes to singapore. haslinda: it is. singapore is not a claimant in the south china sea, but it's vessels travel through the area. the south china sea is a shipping lane with a $5 trillion of trade passing through every single year. it is a concern for singapore that china is deploying more heavily armed coast guard vessels. on top of that, it is using so-called white called fleets to chase facing -- fishing vessels away from the reefs that is
making claims on. singapore, like many countries in this part of the world, have sounded a note of caution, calling for tensions to be addressed. it wants to take a more united approach to resolving the dispute. as you know, the south china sea has become a flashpoint for the struggle between china and the u.s. for influence in the western pacific. it is no secret that china wants to be a regional powerhouse in this part of the world. haidi: how effective can they even be when trying to subdue these tensions? what has he done so far and how expected is it expected -- how effective is it to be ongoing? asean hasso far, failed to do anything. if you refer to statements made by the organization, you will see no mention of china by name, even though it has expressed concern about developments in the area. that is why several asean member
states have called for greater unity. singapore's defense minister says there is wisdom in the system to understand what it is you are really fighting for. consensus.tes on it only takes one member state to disagree for a statement to be dismantled, like in june. there was so much confusion after malaysia released and then retracted a joint statement that talk to china for the first time about his behavior. there has to be a more corrugated approach. -- coordinated approach. haidi: sounds a long way from being effective, let alone finding agreement. coming up next, time to sell? find out why it may not be a good idea for bond investors to hold on for too long. trading in hong kong gets underway. . we are going to have the opening numbers, after this break this is bloomberg. ♪
haidi: the top stories turning this hour. japanese policymakers will take little comfort and the reports released this morning. the index was unchanged from the previous. . however, capital investment across all large companies is expected to drive 6.3% this fiscal year. that is also slightly below forecast. the factory gate remains at its highest level in almost two years. accumulation at 50.4 for a second month in august.
seven chinese cities of -- singapore is falling last quarter. itsgovernment holds firm on property calling resolution that it rolled out in 2009. this was the 12th straight quarterly decline. that is the longest streak since that measure began in 1975. shanghai and shins and -- and jim -- let's take a look at the opening in hong kong. a look at the japanese shares actually. the nikkei is up more than 1%. japan is leading with basic materials.
here's hearing some saying in securities that consensus is forming in the market. cuts in limited rate the future. take a look at the stocks. we seeing shares of stocks afterng -- rising sharply news from bloomberg that apple .s in negotiations stocks rising go mostly percent in early trading. and coca-cola japan are surging after news there anybody to merge. the oil market is just now halting three days of gains. seeing some speculation about iran boosting its exports. priceget an eye on that when it comes to commodities. we could see supply shock.
the philippines widening its crackdown on minors supplied, with the world's nickel supply being at risk. that is rallying about 25% through 2017. we're also seeing that nickel could be quite percent higher this year because of shutdowns raising the chances of nicole reaching around $13,228 a metric ton by the end of the. the hot think trading right now at more than 1%, surging with her breast of asian stocks that as they reversals losses. haidi: demand for negative yielding debt is rising again. that emanates from one party does one country, japan.
wire investors buying such debt? >> good morning. the main reason why we can see that this is piling ito negative rates debt, think they expect it to go down in some markets. the bank of japan has introduced a new yield quantitive easing program. it is keeping a four on bonds up to two he up to 10 years and zero. investors are looking at a debt that will not go beyond zero. stepcan obviously by the that andit -- by this sell it to the bank of japan out a profit. people are looking at that kind of a way of making money. what are the risks that
we are looking at of a reversal? risk is that holding ino these bonds in a sense the hope that you can sell them arehe central bank, there good reasons to think that rates could go down farther. the risk is that rates could actually spike up. an election coming up in november the united states that will have a big impact on rates. if you're holding these bonds and rates spike up, you are seeing losses. lots of talk -- there is a lot of talk about these going lower. we're certainly going to have to see what happens in the election in november. if trump gets in, the bank of
america thinks that you will see a much faster increase in rates in the u.s. fed meeting in december -- in november, who are looking at an increase in rates. where the fed goes, i think a lot of the world will be looking. it will be difficult for japan to keep rates -- eighth -- to keep a foot on rates if the u.s. raises at the end of the year. haidi: thank you so much for that. let's check in on some of the other stories. the historic peace accord between colombia and the rebels has been narrowly rejected at the ballot box. voters are asked to simply if they backed the deal. the results were closer than expected. wantsaid no, they do not
the rebel groups relaunches a political party. negotiations for both sides will resume. india has ratified the paris accord,paris climate meaning the world's fastest-growing economy will limit fossil feel use. it creates about 4.5% of global pollution. 55%accord takes place once appeared.es sign manufacturers can and at 54 for a second month in august. above 50 indicate improving conditions. policymakers have less of it introduce further stimulus.
authorities in areas including are ruling -- the world's largest container line says it is open to acquisitions if the right opportunities come up. says consolidation is good for the industry. >> we are on board one of the biggest container ships here in hong kong. there has been a lot of speculation that there could be some consolidation in this industry, particularly following the grounding of south korea's largest shipper, hanjin
shipping. today, i was speaking to the head of merce climb -- maersk line. i asked mother not they were eyeing hanjin's assets. interest inis an the right partner coming around, we are open to acquisition. i cannot speculate on specific acquisitions. of course, there is always an initial disruption when consolidation happens. consolidation will help the shippers balance out the demand and increase the quality of shipping. we do get is good for the industry. certainly not ruling that out. analyst saying that it is likely that maersk would not be
building new vessels and could be after hodgins assets, specifically newer vessels. maersk'sd increase capacity in the asia-pacific region. it is the world's largest shipping container line. 8% demanded asia-pacific. hanjin's assets, it could double its market share. launched a new tv why roup they are saying some stability on the pacific trade route, and are looking at a high utilization of their ships. that should at about .6% to
their overall demand. -- seeing theg dock. vessels no clarity on whether we will see them pick up hand jim assets -- on hanjin's assets. they get so much. doomaki is adding to the and gloom surrounding the shipping sector. its shares are plunging. it was the worse performer does the worst performer on the index.
that is for the. through march. it has that it will conduct a review on whether or not to continue with its shipping business. must -- elon musk strive to increased has a sales seems to be paying off. taz like him of the electric car company, one of the companies likely to be on the spotlight in monday's trading session. the company released its statement over the weekend of delivery of vehicles, and it shows that its shipments exceeded wall street's expectations. this is in keeping with ceo elon musk's push to get every car possible out there. haslett has delivered 24.5 thousand vehicles in the first quarter. the company under a bit of pressure to show that it is
profitable before it begins raising money to ramp up production of the new model three. you can see that tesla has been faced with a bit of tradewinds over recent months. at the end of august come the ceo sent an e-mail toyou can sen faced with a bit staff stating his goals, and urging ,hem to make, build, deliver every car they possibly can. still ahead, the hunt for yield. some of the things brexit has provided to business. what comes ahead. this is bloomberg. ♪
expected to travel outside the country on a weeklong national holiday. the estimate 589 million trips will be made at home and abroad between october 1 and october 7. rise duringected to golden week. korea and japan of the top destinations. in an interview with bloomberg thatision, the ceo said the company would be targeting multigenerational families who live close to major cities. fornew resorts will be good families that want a weekend getaway. >> there is a limited number of secondary homes. the need to go outside and to have an escape and have
activities in nature is even greater than we have elsewhere. resort --lding in new building new resorts has helped my count gain revenue beyond -- not how -- macau gain revenue beyond expectations. it once -- rebounding. are anxiety of deutsche bank has eased. the chief investment officer of the bank. potentially yield -- lower yields, brexit, we now the deadline on that. if you take into account all of
this, what is it as allocation look like going into two -- we expect rising volatility. we have seen it with the deutsche issue. we should not take excessive risks. at the same time, we like trade exposure. we have overweight exposure to we feel market, because the need to get intimate to the portfolio. the deutsche issue, is it an isolated one? issue,t a systemic particularly if you look at the italian banks. >> we think it is one regarding .he company deutsche
it is a single bank, but there is an underlying problem as far as european banks having a note to your business model. air force by the ecp to reduce their activity. there is no way to force profitability, so we think that commonality in european banking shares is what also have an underweight in banking stock at this point. haidi: how much conviction do have an emerging market assets? this is a major headwinds and ,nti-globalization movements the brexit, the u.s. election, and also the fed press moving by the end of the year. we see opportunities. there has been at two years slowdown of growth in many countries.
some of thekup in numbers, we see a stabilization of many of the local currencies. we think overall we can clearly toward better outlook for emerging markets. this will also be embraced by many investors. haidi: what do you like in asia? asia.like fixed income in pickup forattractive many countries. we have been in india and indonesia, now also there is a strong rally. haidi: it is interesting we just had this morning about the rising levels of issuance in .hese bonds you have the situation where credit is growing at a pretty alarming rate in asia, but the growth is not keeping up to that case. isn't that setting up a disturbing scenario?
but think greater rising, rates are not imminent. this a question of longer-term. make it clear to station about what we like that is investment grade. that means of the fundamentals are quite stable. we are cautious on the high-yield side. we have a strong quality of that in spending for emerging markets. haidi: we now have that march deadline from theresa may to trigger the brexit. do you think that gives markets more certainty, or is opening up the pandora's box? thee were surprised that market was not reacting much to brexit. we think that is a bit too
optimistic. we think that overtime, brexit will have an impact on the investment side. they're saying they're reconsidering building a plant in the ok. -- in the u.k.. we think that will be a longer-term issue for the emerging markets, the u.k. market. six month is not very long at all, so we will have to see once that is actually triggered. the queue so much for coming on -- thank you so much for coming on. ♪
putting some of it up for sale. on display.0 cars the collection is one of the biggest in the world. paul allen has been taken a look around. north ofarehouse sydney was once a budget hardware store. now it is home to one man's expensive and expansive private car collection. cars.re's about 500 it's just under $700 million. that is probably being conservative. this primary alone is worth $5 million. nevermind the vintage rolls-royce collection. this is a rather expensive list of instructions. it is not easy to drive. >> also near impossible to drive
is this new arrival, which he took for a quick spin. should did the air, it has no a barx, but it does have to hide your whiskey. man owned a deal of 30 years. after owning -- after selling most of his stake, he came home to collect cars. it is a business, it is essentially a car collection. >> obviously, some of the cars will not be sold to -- sold. some of them are works of art. putting themagine ferrari on the road. >> it will appreciate. >> on the other end of the
spectrum, this area is dedicated to the cars of communist era. this made its way to australia from the former soviet union. used to be the ride of bureau members -- politboro members. the location of this is also a closely guarded secret. cannot even begin to imagine what an extraordinary collection. we have a big guest coming up later on bloomberg. we will have an exclusive monday.w on in the next hour of the show, amazon's ambitions in india.
the thirdis monday, of october. i'm haidi lun. this is trending business. ♪ haidi: we will be live in tokyo, singapore, but first, here is what we are watching this morning. slightly more disappointing day from japan. they're coming in below expectations, and the business outlook is subdued. it is a different story when we come to china. there is stability on the factory floor there. that a property
bubble could be starting a new term. even let us know what you think of today's top stories by following me on twitter. trading in jakarta is getting underway. we are getting a bit of a respite rally when it comes to asia's shares on the market. many markets are out on holiday, including may not china, as well as korea and malaysia. the market is trading, up 9/10 of 1%. many traders in many states are out on holiday. 1.2%.kkei is up we had the boj time can survey this morning -- tankan survey this morning. think -- hansing is up.
markets havingg the best quarter since 2012. we are seeing all sectors in the green right now. one sector that you have to keep how --n is the mock macau gaming stock. in church 7%, instead of -- it surged 7%, and set of the expected 4%. we're seeing all of these in the green. galaxy leading the way, up 4%. business sentiment in japan largely holding up in the last three months, even with the story and. henry, a mixed bag, wasn't
great, wasn't terrible. another key take away to dig a little deeper? it is the impact of a strong yen and greek are golden globes -- weaker global growth. that was supposed of feet through to the higher wages and inflation. the yen has gained about 19% this year. you can see that this is starting to have an effect on profit and corporate sentiment. there is no unprecedented monetary policy. what next for abe? that is a good question. now, i thinknd
that the forecast is for japan's economy to keep sputtering along , eking out growth here and there, lacking a fundamental driver. most of the policy burden has been on the bank of japan. their questions about whether the boj has reached the limits of what it can really do. the abe government has taken steps trying to make it easier for working mothers to return to the workforce. the big structural reforms are still lacking. hard: those are really the ones, fairly politically unpopular ones as well. thank you so much for that. the chinese economy there is
showing signs of stability as the services industry expanded and the official factory gauge is steady at a two-year high. are they feeling pretty good about the economy? like they have solidified the economy over the summer. a lot of the volatility and turmoil that we had in the first , but they'reths now 50 or above for the last seven months, including two months in a row at exactly 50.4. it is stability on the factory floor, which has been suffering through this slowing pace of growth. now change the page, services industry is steady again. what all this means is that we could start seeing policy shift a little bit from the recovery efforts to more to containing
risks. we talk about containing risks, you talk about potentially the property market. haidi: we have been talking about these incredible gains in major cities. are they doing something about this? in targeteddoing it cities. over the weekend, the last three days, we had a number of different cities, with their own property curbs or enhancements of the property curbs, such as beijing. overall in china, prices are rising the most in six years in august. beijing increasing down payment requirements to 35%, the highest among tier one cities in china. it looks as though they are indeed. while we not having any policy moves yet on monetary policy, on
rates, we are seeing targeted are healing. areas it has been a tear when city recovery -- tier one city recovery. china is not one property market. it is the commendation of many property markets. haidi: certainly a headache for policymakers there. let's take a look at some of the other stories we are watching for you today. up -- a roundup for property developers in china. >> they been asked to investigate the ever-growing group of china's overseas land. haveials in gene on city been looking into a legal property sales. the ministry says they are fabricated and spread misleading information, disrupting market order.
the overseas land pr section did not answer calls or e-mails when bloomberg tried to contact them outside wrigley business hours. deutsche bank is preparing to cut about 1000 jobs in germany. the losses will be part of the cost cuts announced last year. the lender is set to reach an agreement with labor representatives this week. the job cuts will mostly affect --kup -- back-office stack back-office staff, such as i.t. services. it is illuminating about 3000 full-time positions, including two point 5000 and it's commercials business. there are concerns about mounting legal costs, which touched a record low last month after the u.s. justice department asked for $14 billion to settle an investigation into mortgage backed securities,
which is more than twice what you just hasn't aside from that more than twice what deutsche bank has set aside. five students are interested in takata.ech, -- we're told that makes their bids toxicity bele ongoing, and it could take some time for a buyer to be decided. haidi: coming up later in the show, amazon's big toxicity be ongoing, plans to make india's homegrown online india'ss -- to beat homegrown online retailers at their own game. and that the energy's plans to shape the yield curve may not bring much benefit. this is bloomberg. ♪
large japan's manufacturers remained more downbeat than expected over the last quarter, with weak global growth at a stronger currency weighing on their mood. let's get some analysis with a senior economist, joining us now from singapore. a lot of doubts over whether the boj's tweak will have the intended impact. you're saying this relentlessly strong yen will continue to be a headache for them. >> i think it poses significant risk to their recovery. their recovery has been going decently until the yen rallied. over the next 6-24 months, we will start seeing the consequences of a stronger yen
on their exports, their inflation data, and their economic growth rate and i think it is worrisome. haidi: there is also a global contagion aspect as well. if you look at the correlation between jgb and u.s. debt, and the european bond market, it is the highest we have potentially seen in that. does this concern you? i think that there is a common underlying thing as to why this is -- theme as to why this is taking place. many of these countries, beginning with japan in the 80's and 90's, and later on in the u.s. and europe, took on extraordinary high levels of debt. when you have high levels of public and private sector debt, it sort of necessitates keeping interest rates at a very low level in order for that date to be financed. -- that debt to be financed. haidi: how to feel about the true doctrine -- about the
trajectory? does whatuld take would it take to change your views on the mood by the end of the year? >> i think it is likely that they will knew before the end of the year, probably at the december meeting, but i think that is predicated on the assumption of continued growth in the labor market. if we do not see growth in the , if that isn't coming in at 100,000 per month, that might give the fed a pause. they may have to delay a rate increase into next year. i think the most likely scenario is that they probably will go in december. haidi: is it dangerous? is it already a misstep to have delayed so far? there is a view that we should have lower rates forever. >> i would actually argue that
it would be dangerous for them to increase interest rates to quickly -- too quickly. economy has not really d leveraged since the end of the financial crisis. leveraged cynthiana the financial crisis. when you have debt levels that sure not tove to be increase rates too quickly. otherwise many actors in the economy will have difference financing debt. i think the fed's right to take a very slow and cautious approach. sure not to increasehaidi: how much of a rie u.s. elections? we have the vice presidential debate this week. we had the first presidential debate a week ago. how are you feeling about the outlook? actually, i find a fairly low degree of risk to it. everybody in the united states,
and people all around the world, are sort of riveted by this election. people are following it increasingly closely. when you look at the day-to-day correlation between the changes in prediction markets with globally,at trade whether it is u.s. treasuries or the dollar index, correlations are very low. it indicates that the markets are sort of perplexed by the election, but they don't know what to expect, either in terms of the outcome of the election itself, or the policy outcomes regardless of how the election turns out. haidi: what about the drag on trade? if you don't anticipate much of an impact on the equities market or other asset classes, what about the big picture of anti-globalist sentiment taking hold? you have a deadline becomes to brexit, as well. does that answer the two markets -- does that add uncertainty to
the markets? the deadline for the brexit actually reduces uncertainty, because we do know that it is in fact going to begin the process in march 2017, which will presumably last two years. may at hert theresa government are going to begin the process next year. we don't know who is going to be on the other side of the transaction. france, germany, at a number of other company -- other countries are going to have elections next year. i think the market has a long time to analyze and digest what is going to happen there. in terms of trade, i think that what is happening is essentially, there is going to be a great lowdown in new trade agreements coming through legislatures both in the u.s. and in other countries around the world with that anti-trade sentiment building up. existingher hand,
trade laws are already enshrined. if the president wanted to change that, it is not really clear if he or she could do so. haidi: there are a lot of as to what the next u.s. president would be able to hold that landscape. china to talk about briefly. you like many analysts are increase lead concerned about leverage. in china come you're saying they could keep it under control if they keep interest rates low. with this rebalancing stabilization now, we are seeing a lot of people actually saying that by the end of this year, next year, we could see them shifting to a tighter monetary stance. with that create greater problems? >> in china just like the united states, and prematurely tight monetary stance could be very damaging to the economy, given a degree of leverage. think regardless
of what the federal reserve might want to do in the u.s., or what the pb oc might like to do with interest rates, they are restrained by the high levels of leverage. they have to essentially keep interest rates quite low. if there is a tightening in china, it could resemble that in the u.s.. maybe one or two interest rate increases per year. the chinese economy has picked up a little steam over the course of the first nine months of the year, but it is still operating at a fairly moderate pace of growth. i think that would probably preclude any rapid increases in interest rates. haidi: where does getting some lights coming through from tokyo. there isovernor saying plenty of room to ease policy, there is sufficient room for further monetary easing. rhetoric toly just try and inject confidence somehow into the japanese
analysts spirits that we said has been lagging. what more can they do? >> they have to careful what they do. and some ways, the monetary easing in japan was quite successful. the they inaugurated quantitative easing program a few years ago, the yen began to decline and stimulated their exports. but what reversed things in is the presence of negative interest rates. i think negative interest rates are not helpful to their recovery. negative interest rates are made to ease monetary policy, but they seem to have had the reverse impact of unintentionally tightening monetary policy. that is part of the reason why the yen has been soaring in recent months. policy byse this spanning other programs, effects can be quite small. but if it means easing policy by furtherinterest rates negative, it is potentially
quite damaging and counterproductive. ofdi: definitely a lot concern coming through from the financial sector in the banks. a bit of a respite at the moment. we will have to leave it there, but great to have those insights. a quick check of the latest business headlines for you. shares of japan's largest jumped. has they see income falling to his six you love about $790 million. they have been struggling to revive the company after a power struggle, and the present just his deadline to deliver a recovery plan within 100 days of taking over. there's a new asset management trillionwho has half a dollars in combined assets. as it meant that one officially opens as a business on saturday.
onesset management officially opened as a business on saturday. the ceo also backs the doj's current policy directions. there is warnings over asian debt after bond sales bloomberg to a record level in the last quarter. they want to low and lower costs -- lock in lower costs. pimco says asia's credit is rising faster than its asian growth, and it does not expect its leverage or rising debt to slow. coming up next, singapore home prices plunging the most in at least seven years, amid signals that the government will not be rolling back 2009's curb. this is bloomberg. ♪
haidi: this is trending business. i am haidi lun. singapore's home prices have faced their biggest decline in seven years. let's get over to our southeast asia correspondent. is it enough -- is the drop in prices enough? >> not really. prices have not dropped far enough. the government has said it is still too early to remove the curves that were interest -- and lamented back in 2009. prices have fallen for the 12th straight quarter, and this chart shows you the decline, the biggest drop in seven years, the longest streak of quarterly losses since this was first published back in 1975. if you track home values, they have dropped only 11% from the peak. prior to that, they searched about 40%.
on balance, prices have not dropped enough. demanderest rates and from foreign buyers have boosted demand, raising concerns prices have written -- have risen too far, too fast. singapore is a high-end huizinga -- housing market in asia. the luxury home dream is fast fading away. glut when it the comes to the property sector? how much supplier we seeing on the market -- supply are we seeing on the market? theome vacancy rates are highest 11 years. it could take three years to sell the existing supply of unsold homes. the issue is the low rate environment. that of the overflow of cash prompted developers to bulk up on debt. built, anded, they
now the market is awash with supply. the large supply due to hit the market could add to the drag on prices. now there is a need to ensure stability. singapore's property market was one of the worst performing in the world last year. there are concerns that some developers here may run aground, but despite the high leverage and weakness, large developers have the financial ability to weather the storm. the question is whether the smaller players can do the same, or end up breaking the wider market. haidi: let's do a quick markets check here on this monday session that we're seeing. bright at the moment, after a few weeks of big losses for the asia-pacific. hong kong is really being driven by the rally we're saying.
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haidi: policymakers will take little comfort this morning. the manufacturer index came in unchanged from the previous period. capital investment across the company is expected to rise this fiscal year of it'salso slightly below forecast. china's factory gauge remains of the highest level in two years. rose.rvices reading also
seven chinese cities are tightening rules for home purchases of the past few days to curb the runaway property market. is said to have received offers from each suitor. all five have proposed bankruptcy. a pretty steady day when it comes to the market. quite steady, especially for japan, which has been in positive territory. they are up 1.2%. all sectors of the nikkei 225 in positive territory. see says there is a
consensus forming that the boj policy framework is effectively tapering bond purchases and they see unlimited cuts. means giving the limitations of the policy is that the dollar will struggle to rise against the yen, which is currently unchanged but after .eakening, trading at 101.45 we also hearing from analysts that they expect the yen to trade higher throughout the week. , theirlook at indonesia currency strengthening 4/10 of 1%, and of inflation data coming out anytime. we are seeing strength as gains.s expect
kiwi dollar.t the losing 3/10 of 1%. keep an eye on new zealand treasury data out later this afternoon. the demand for negative yielding debt is on the rise again. emanating from just one country, japan. we are now live in tokyo. this is a global phenomenon. why is such a large portion coming from japan? just under half from japan. the reason is because the main driver for how low bond yields go is monetary policy. it has become more and more experimental. bank of japan has been the .eader on this year
in january, it fell into negative rates and has now undertaken something that no central bank has tried before. around zeroget for four the 10 year yield. a lot of traders are taking this as being a cap on yields which is helping to depress them again . with the globalization of the market, japanese investors are more encouraged to go outside japan to look for yield and bring them down everywhere else. i mean, do we just blame global monetary policy for this? reporter: no, actually. there is another couple of reasons for yields to be down. is thehaven appeal driver right now.
there are concerns about the european banking sector led by deutsche bank. since around the middle of september, and has been european and swiss debt that has led to further decline again here in the new leg down. overall, the global economy itself, low inflation, low growth worldwide, particularly in developed markets where demographics are not favorable. this is going to be pressuring bond yields lower overall. rishaad: really a perfect storm there. we have a major guest letter on, the right enemies will join -- kathleen hays -- for an exclusive interview in new york. in on other stories,
the pound falling after theresa may said she would trigger brexit by the end of march although there is no clear idea of what the outcome would be. it could start a roughly two-year process of taking them out of the european union. the confederation of british industry's calls for urgent guidance on how they will trade. we are told donald trump will not release any new information in response to revelations he claimed a loss about him to pay no federal income tax for almost two decades. the report is expected to increase pressure on the tycoon to release his returns as major nominees have done for decades. trump supporters call him a genius. the historic peace accord between columbia and rebels has
been narrowly rejected at the ballot. voters were asked if they would and in a result of his closer than expected, they said no. it would have seen the relaunch as a political party. the presidents of the bilateral cease-fire will remain and negotiators from both sides will resume talks. india has ratified the paris committing the fastest-growing economy to limit carbon monoxide emissions. ofia produces 4.5% greenhouse gas production -- pollution. so far, they have 48%. musk's drive is starting to pay off. third quarter deliveries topped estimates and tesla has issued a
statement. and tesla, one of the companies likely to be in the spotlight in wall street. the company released a statement after every of vehicles showing that shipments exceeded expectations. this is in keeping with elon musk's push to get every car possible out there. they delivered 24.5 thousand vehicles in the third quarter. company under some pressure to show that it is profitable before raising money to ramp up production. tesla has beent facing headwinds over recent months. some obstacles have faced the company.
in august, elon musk sent an e-mail to staff stating his goal and urging them to make, build, deliver every car we possibly can. the world's largest container ship lines has it is open to acquisitions of the right opportunity comes up. is good for the industry -- speaking to our juliette saly who joins us. we are coming to you live from the hong kong part on one of the world's largest shipping containers. it is on route to china later today. in september, [indiscernible] building vessels as way of acquiring new business so had their a lot of speculation that maersk could acquire others.
hanjin collapsed in august. maersk in the ceo of why he did not specifically say -- he did say there is need for some consolidation in the industry. >> in general, if there was an partner and a right coming around, we are open to acquisitions that i cannot speculate on specific cases. li & fung cigna consolidation would benefit overall but as always, and in missile disruption when overall -- consolidation will help the ship balance out the supply demand and will help the product quality and benefit shippers. consolidation is good for the industry. maersk has also
launched a new route to pick up jine of the slag led by han exiting the business. he also said that they are seeing more stability on the routes and looking to get high utilization of their ships. maersk is the world's largest shipping container company with here, itobal trade but only actually ranks third with 8% of capacity. analysts suggest that maersk will snap up some of the assets from hanjin. that could double its market share. ahead ofrently quiet third-quarter results coming 2 the wen november
have seen him say that they have been seeing a pickup in demand particularly in the asia region and interestingly particularly fruitss for new zealand and vegetables, so they are launching a new service which --l dock in new zealand really trying to service this chinese growing demand for luxury food from new zealand and australia. haidi: from iron ore to transporting stea kawasaki at into the atmosphere ofk. gloom surrounding the -- from iron ore to transporting steak. , sake cutting operating profit -- kawasaki cutting operating profit. they will conduct a review on
beijing was the city to become less dependent on gambling. 6 million chinese tourists expected to travel outside the country during the national day .oliday the china tour is an academy estimates that 589 million trips will be made. 12%.is up tourism revenue is excited to rise 13% with south korea, and japan the top destinations. club med planning to build as many as 15 resorts in china. bloomberg,view with they said that the company would target multigenerational families who live close to major cities, hoping the resorts will
appeal to families. >> there is a limited number of secondary homes. at the same time, the city's everything bigger. to go outside and escape in nature is you can greater than elsewhere. haidi: amazon is throwing billions at india to become the country's top online store by sales. their busiest retail season comes just ahead of the diwali festival. wally the run up to the -- the wally festival so important you come reporter: this is india's biggest buying season. a lot of people redo their
houses,akeover their purchase cars, cell phones, things for the house. it is a massive season of and every retailer in india wants a piece of that i and obviously, online retailers are really getting very [indiscernible] and separations have been on for months. others, theyn and have been redoing their taglines for the buying season, restructuring. restructuring payment infrastructure. it is a make or break season for retail. haidi: why do they view india is
such a crucial market? how much market share to they stand to gain? they india retail market is several hundred billion dollars in size. online retailers have just a miniscule part of the market right now. there is a lot to gain and for , there islike amazon lots of opportunity. even retail has not penetrated all of india. there is not a walmart in india to fight amazon. it is all there for the taking. obviously, amazon has done really very well in china at all and hopes that india would be the next big market. [indiscernible] smartphones are still the
hottest topics as investors play a guessing game on what the technology world has in store. following a mixed response to the iphone, there are concerns that the smartphone industry may be facing the same fate. in your column, you talk about these major advancements in smartphone technology that are coming to an end. what are they? reporter: everybody cared out cost the processor was but that interest died about two years ago. qualcomm rose that way coming out with faster processes. people do not tend to care anymore. the other one is resolution of cameras and displays. both of those areas are important.
now, the resolution is almost as good as the naked eye could see. cameras has seen better iphone iphone. we're not going to see that going much further. these revolutionary hardware improvements have pretty much run their life course and we wanted to look for something else to inspire people to purchase smartphones. haidi: what is the next big ?hing yo reporter: thing we see now is there is a lot more interest on batteries even without the problem that samsung is facing we would be looking at this area again because battery life is that last remaining barrier. you still have to plug it in and recharged overnight. we would like to get more out of them especially as people are using video more.
haidi: mitsubishi says no decision has been made on whether their new airliner will be held back further. the aircraft division says delivery to the first customer may be late because of technical modifications. shares falling sharply at the open today. bond sharingargest services lending investments. 100 million dollars was raised from private trading equity firms. their arrival that with investors from hill capital amongst others. universe truly is largest private car collection has thrown open to the public and it is putting some of its treasures
up for sale. the collection is one of the biggest and most impressive in the world. paul allen has been looking around. norther: this warehouse of sydney was once a budget hardware store. now home to one expensive and expensive private collection. e expensive and expensive private -- expensive andxpansive guest: private car collection -- >> is is a rolls-royce. this is a rather expensive -- list of instructions. it is not easy to drive, is it? reporter: rolls-royce normally catch drive is impossible to
this new arrival which we took for a spin. seatbeltsgearbox or but it has a bar to stash your whiskey. auto -- after selling most of his stakes, he came home to in george his hobby. are you breaking even? this looks like a passion good >> it is a business but it is essentially a private collection. reporter: i understand most of obviously,ale? >> some cars will never be sold. that ferrari, for example. i cannot imagine driving it. >> it is a car that will appreciate. as the other end, one
area is devoted to the cars of communist eastern europe. engine a remounted perhaps qualifying as the world's most powerful lawnmower. this limousine also made his way to australia from the former soviet union. supposed three -- if this upholstery could talk. haidi: that is it on "trending business." this is bloomberg. ♪ . .
kong, we are live in hong a beautiful look of the calderon heart or. the first trading day of the month. this is "asia edge." ♪ i'm angie lau. top stories this hour -- more pressure for abenomics. however, the boj governor insists he still has plenty of ammo. and fears of a housing bubble curbs. new property
and amazon has grand ambitions for indian investing. they are vying to be online sales number one. biggest shipping line says for team ahead for acquisitions. is consolidation good for a struggling industry? we are live with more this hour. shery: and i'm shery ahn. many markets we are keeping an eye on. they are giving a boost to the regional benchmark index, which from a low. the nikkei is gaining more than 1%. all factors in the green with health care stocks and consumer goods leaving those gains, and remember -- japan just released its boj